Many think that analyzing forex is hard and filled with mathematical concepts and many is willing to pay millions for market courses so they understand the technical analysis with graphics and so on. But we are confused by ourselves which frame will we choose, single minute, five minutes or daily.
If we think logically, clear, and ease we will see signals that actually exist but we can’t see because there’s indicators blur it. KISS = keep it simple stupid, is basic to be implemented everywhere.
To be successful in trading there’s some principals to follow. When you’re trading then you’ll have to think as a trader, buy at low price and sell at high price is the number one rule. Whether you’re playing stocks, commodities, or forex keep the basic traders’ principals.
Trading forex lasts for 24 hours. If we’re in Indonesia, the Australian market starts at 04:00 early in the morning, then the Japanese market at 14:30. Starts next is European market at 20:30 and the last one to open is the American market which will close at 04:30 the next morning.
Based on experience, time is very important to the outcome of the trade whether we will win or lose. Mostly the price is going steadily from the morning till afternoon Indonesia time. The ups and downs of the price start when the European market opens. Then when the American market sessions are open, we have a very good chance to gain big profits in short time only if we can position ourselves in a good position.
The way to determine the buy and sell position. Looking at the daily phenomena it is better for us to trade at American time. The first step is to count the price range (high and low) from currency pairs that day. There are four commons currency traded:
* EUR/USD Daily range average : 110-120 points
* GBP/USD Daily range average : 180-200 points
* USD/CHF Daily range average : 120-130 points
* USD/JPY Daily range average : 80-90 points
The numbers above is not fixed but at least when we enter the market we know that we’re in the right position. Eventhough this won’t guarantee a 100% win.
If we look at closely there’s a certain pattern from those four pairs of currency that is Euro/USD and GBP/USD walks the line together and 180 degree from USD/JPY and USD/CHF. If Euro/USD and GBP/USD is going high than the USD/JPY and USD/CHF is going the other way, vice versa.
But things don’t always go this way. There’s a moment where a currency is on his own and the other at the usual pattern. If this happens than the curruency that is has a stable movement is on its lowest or at its top and the currency has a mature daily range (close to the currency’s average daily range).
There’s no certain rule that says a pair of currency is easier to trade than the other, every currency have their own chances, and it is better for us to adjust to our margin that we have. The Euro/USD and USD/JPY movement is far more stable at range of 100 points and this make the currency safer to be traded with the smallest of our margin compare to GBP/USD and USD/CHF which range in the 200 points.
From the phenomena above a conclusion can be taken, that money is traded by top-class speculators like George Soros only on four world main currency. This is to balance the daily volume and price so at the closing stage the currency will be at their average range of high and low.
The price movement can actually be determined by the movement of each currency pairs. Analysis approach fundamentally with watching close the news is reflected from the price movement. We can read schedule of economic news just to watch it for hours and only waiting for certain news. Close to those times there are possibilities of extreme price changes.
Knowing when ther’s going to be an extreme price movement we can at least save times and we don’t need a whole day to watch the price movements in the monitors, except it is a hobby and doesn’t bother you that much.
In trading it is better if we adjust to the condition of the field that day. It is too risky if we try to predict that the price will be bullis or bearish at certain price level. Then we have to wait for the perfect moment to enter the market that is when the chance has come. The main key is to stay close to our trades.
Trading must be discipline, disciplne following systems and patterns that we have already set. Greed can cause a very fatal condition. Many failures started only by the simplest of mistakes. Miscalculations happened, and if those happens then we have to cut-loss or else we will beburden. Then think positive that there’s always better times tomorrow.
You can enter without having to know graphics and charts. The basic in decision making is the highest and the lowest price range everyday. If the price moves to the highest price that day, wait, because the price will try to get through the highest price that day. Just look at the daily range. For Euro/USD, the daily range is 98 points when we enter the market, there’s a possibility that it might pass 98 points that day then the price will decline again because there will be profit taking action.
If you are risk taker, you can make profit when there’s a price correction and actually you will get two gains at a time that is when the price goes up for a moment for then goes for reversal. This can be done but beginners are adviced not to do this and everyone who hasn’t a good experience about the market. You could try at the virtual forex first to understand the situation.
Don’t forget to pay attention to the currency that is opposite to the one you are trading. Example in this case you hold Euro/USD, you have to pay attention to opposite currency such as USD/JPY. Because at the same time USD/JPY will try to touch the lowest point before at the end go for reversal.
With the usage of graphics, we can get very good informations. It is also better if we use some softwares for trading we could only watch the time frame for 5-15 minutes. The indicator that is used is Bollinger band and if you’re not pretty sure you can add RSI indicator with 6 as it setting period. But back to basic, the important thing is the daily range of highs and lows. If there is break high and break low, you then go watch the candlestick and focus on the five-minute frame.
Many are trapped focusing on the graphics like the Ma lines has crossed or it hasn’t and many more. Actually at this time, price range hasn’t become mature yet, and of course makes things risky. Once again it is necessary to look at the mature price range.
The usage of pivot, support, and resistant point can also sharpen your decision. But once again the price range is all matter for decision making and you shouldn’t be doubtful because of any other indicators. For example Euro/USD has gone through break high. Look at the five-minute chart than the candlestick will touch the upper bollinger band or even more. You can wait a bit more so it can get to the very top, then when you feel there’s a reversal you can do your entry.
Price movement is very complex that affect four world main currency one another. This can’t be explained in detail. Overbought and oversold aren’t basically call upon the five-minute or the fifteen-minute frame. This signal will come to you as you practice, use your logic and amazing things will happen.
Trading is not a exact science so don’t waste your money for courses that will guarantee your success.
The main key is practice. There are many source of informations such as newspapers, internet, and mailing lists.
Tricks above doesn’t promise you a profit but at least if you implement the logic you will the be on the right track. You will have the basic of decision-making.
The recipee is, at the opening of the market, choose currency that is there.
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