Welcome! Dear Traders,you are reading my forex trading experiences. Forex trading is a very profitable and very risky business opportunity. If you are a beginner, calm down,have a cup of coffee, and convince yourself that you need to study hard to win in forex trading. Obviously, the task is not easy as the statistics claim that only 5% traders win in forex trading. If you are determined, serious,and hard working, you can surely be included in the group of winners.

Friday, December 2, 2016

HOW CAN WE INTERPRET BIG GREEN CANDLE & BIG RED CANDLE ON CANDLESTICKS CHART

yourFXguide- Candlesticks chart patterns are very simple to identify and very effective to trade. Generally, we find two kinds of candlestick patterns on price chart simple and complex. We can define the two kinds of candlestick pattern without any complexity. 

A simple candlestick pattern composed of only one candle, and a complex candlestick pattern is composed of more than one candles. In this post we are going to learn about big candle candlestick pattern. 

The big candle candlestick pattern has a large difference between opening and closing price.The shadows of the candle are relatively small, shadow is the part of the candle beyond the opening and closing price. 

The big candle candlestick pattern has two types green and red, they are also called as bullish and bearish respectively. However, you can see how the bullish and bearish big candles look like in the above illustration. Let's see how they act on the practical market chart.

A big candle (green or red) is not alone sufficient to find entry or exit signal on candlestick charts, they have to be appeared at a support level, at the time of indicators' signals or after another important chart pattern formation or breakout. Following practical examples will make this point clear.

In the above price chart we can see a big green candle is formed after a doji. Doji is another simple candlestick chart pattern that can signal reversals of bullish or bearish trend. 

A very simple and easy to interpret trading system is trading the breakouts of 20 period moving average. This trading system is very popular among the day traders and other short term traders. In the above image we can see a big red candle appears when the breakout of a 20 period moving average takes place. 

Whenever a big candle appears during or just after the breakout of a moving average or any support or resistance level the breakout is considered to be reliable. 

There was a time when traders had less knowledge about technical indicators. Thanks to the internet that introduced hundreds of indicators to millions of traders. MACD histograms is a very crucial indicator in technical trading. We can see in the above price chart a big green candle appears when the MACD histograms make a peak. 

Most of the traders who spent a couple of months in financial market, surfed the internet and made hundreds of search on google, came to know the trading strategy with pivot point analysis. We know two popular pivot point trading strategies are range and breakout trading. 

How breakout traders can be benefited with big candle candlestick chart pattern is explained in the middle of this post in the example of moving average breakout.In the above illustration we showed how range traders can use big candles to be more confident in trading. We can see price kissed the support level and then made a big green candle. 

The very important thing about big candle candlestick pattern is that a big green candle basically indicates a bullish trend and a red candle indicates a bearish trend. But they never be considered as a reliable signal providers rather they are considered as a tool of measuring reliability of the signals provided by other technical analysis tools. 

Dear Traders,If you have any question regarding this post, you can drop it into the comment section below. I generally respond to your comments within 24 hours.

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Monday, November 7, 2016

"ABANDONED BABY TOP" CANDLESTICKS CHART PATTERN

yourFXguide-In our last post we wrote about abandoned baby bottom, which indicates the reversal of a bearish trend. In this post we are going to explain abandoned baby top, which indicates the reversal of a bullish trend. 

Undoubtedly,  abandoned baby candlestick chart patterns are very rarely found on the real price chart, but still we need to learn about these candlestick chart patterns. 

An abandoned baby top candlestick pattern is composed of three candlesticks a big bullish candle, a big bearish candle and a doji. 

Actually, doji is the abandoned baby. Abandoned baby top also should have a gap between two big candles and doji, though the gap is very rarely found. 

Commonly, abandoned baby top candlestick chart pattern can be found on real price chart without the gap between two big candles and the doji. 

Abandoned baby top without the gap between two large candles and the doji is also called evening doji star candle stick pattern. 

However, I searched on the real price chart of so many currency pairs but did not find any abandoned baby candlestick pattern in its ideal form. That's why I presented an abandoned baby candlestick pattern without the gap in the illustration below.

In the above price chart we can see an abandoned baby top  without the gap. An abandoned baby top signals the reversal of a bullish trend. So, with our common sense we can say a short entry is suggested when the abandoned baby candlestick pattern is formed.

This is the simplest way to trade an abandoned baby top candlestick pattern.But I think every chart pattern should go thorough a reliability test. 

The reliability test of a abandoned baby top candle stick pattern can be done in so many different ways e.g. the reliability of an abandoned baby pattern is done with technical indicators on the real price chart presented below, where the abandoned baby top is formed when the price is very close to the upper band of the bollinger band and the RSI is over bought.


If an abandoned baby top candlestick pattern is formed near a strong resistance level, we will consider the abandoned baby top candlestick pattern is reliable. The resistance level can be defined by previous high, fibonacci retracement level, trend line or a pivot point. 

Very importantly, every traders who are considering candlestick patterns in their trades should install such an trading system that tests the reliability of the candlestick patterns formed on the price chart.

Dear Traders,If you have any question regarding this post, you can drop it into the comment section below. I generally respond to your comments within 24 hours.

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Thursday, November 3, 2016

"ABANDONED BABY BOTTOM" CANDLESTICKS CHART PATTERN

yourFXguide-The most interesting thing about this candlestick pattern is its name. Whoever named this pattern did it nicely "Abandoned Baby Pattern".

Abandoned baby bottom candlesticks pattern composed of three candles one big bearish candle, one big bullish candle and a doji. Literally, the doji is the abandoned baby. An ideal abandoned baby pattern has gap between the doji and the two big candles.

An abandoned baby bottom candlestick pattern indicates the reversal of a bearish trend. The problem with this candlestick pattern is that it can be very hardly found in ideal form on candlestick charts. I searched a lot to find this pattern in ideal form on candlestick chart, but unfortunately I did not find any of them.

You may be thinking, if the pattern is hardly found on price chart, why are we learning about the pattern? Thought the pattern is not found in ideal form but the pattern can be found very close to ideal form.


Very commonly, you can find the three candles of the abandoned baby bottom candlestick pattern on price chart, only the gap between the doji and big candles can be hardly found. In the above illustration you can find an abandoned baby bottom candlestick chart pattern without the gap.

Let me tell you that abandoned baby bottom without the gap is also called morning doji star.

Abandoned baby bottom candlestick pattern can be found on the charts of any time frames but the longer the time frame of the chart the higher the reliability of the pattern.

Not only this but we can measure the reliability of a candlestick chart pattern in so many different ways. Generally, if the abandoned baby bottom candlestick chart pattern is formed at any strong support level, we consider the pattern as a reliable one. The support level can be a previous low, a fibonacci retracement level, a trend line or a pivot level.


We can also measure the reliability of an abandoned baby bottom candlestick pattern with technical indicators. For example, if the pattern is formed at the lower band of bollinger band or fibonacci bollinger band, the pattern is said to be reliable. Even if the pattern is formed when a bearish convergence in technical indicator takes place, we can consider the pattern as reliable.

In the above candlestick chart we can see the pattern is formed when the price is kissing the lower band of the bollinger band and RSI is showing bearish convergence. WOW !!! This is really one of the ideal situations to go long on a currency pair with abandoned baby bottom candlestick pattern.

Dear Traders,If you have any question regarding this post, you can drop it into the comment section below. I generally respond to your comments within 24 hours.

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Monday, October 24, 2016

HOW TO USE PIVOT POINTS TO MEASURE MARKET SENTIMENT

yourFXguide-We learnt the way to use pivot points for range trading and to trade breakouts. I was surely surprised when I saw pivot points can also be used for sentiment analysis.  We already have COT report as an effective tool of sentiment analysis but incorporating pivot point in sentiment analysis can add a plus point. 

In case of range trading and breakouts trading, pivot points are considered as support or resistance levels, but in sentiment analysis pivot point is considered as a equilibrium point at which both bull and bear are playing equally good. My favorite babypips mentioned pivot point as the 50 yard line of a football field. And the football match is played by the bull and bear. 

However, if in a given situation the price is above the pivot point, it indicates the bulls are playing better. In other way, if the price is below the pivot point, it indicates the bears are playing better.

Yes, you got it !!!

From the above discussion, you can understand when the price breaks the pivot point from below, we should look for the opportunities to go long, and when the price breaks the pivot point from above, we should look for the opportunities to go short on the market. Additionally, as long as price is above the pivot point bullish sentiment is stronger, and as long as price is below the pivot point bearish sentiment is stronger.
 
Look at the above illustration which is 30m chart of eur/usd currency pair. We can see the pair opened above the pivot point and remained bullish for couple of hours. The R1 was broken by the price without any retests. 
 
In the illustration below, another 30m eur/usd chart, we can see a similar situation where the market opened just below the pivot point and remained strongly bearish for couple of hours. S1 and S2 support levels were broken after minor retests.

While trading on the real time price chart, we experience so many different situations and most of them are not identical. For example, some times market may open below the pivot point and break the pivot point later. In some situations, market may break the pivot point twice or thrice in a day. These complex situations can be easy to understand, if a trader has knowledge of fundamental and technical analysis.

Trading any financial market is not an easy job, and a trader should employ a bunch of effective tools on his/her trading platform. Pivot point analysis to understand the market sentiment can be helpful, if applied with other trading tools. For example, if a trader is trading range or breakouts with pivot point analysis, the knowledge of sentiment analysis with pivot points will surely make him more confident.

Dear Traders,If you have any question regarding this post, you can drop it into the comment section below. I generally respond to your comments within 24 hours.

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Wednesday, October 12, 2016

NO DEPOSIT FOREX BONUS BY FXBM

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Dear Traders,If you have any question regarding this post, you can drop it into the comment section below. I generally respond to your comments within 24 hours.

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HOW TO USE PIVOT POINTS TO TRADE BREAKOUTS

yourFXguide-Pivot Points represent support and resistance levels and can be traded as any other support and resistance levels are done. In range trading, when price touches a support and resistance levels, orders are placed. Like any other support and resistance levels, pivot points never hold forever. 

Pivot point breakouts can be traded in two different ways aggressive way and safe way. Here I am going to explain both ways to trade pivot point breakouts. An aggressive way to trade pivot point breakouts refers to the way to trade whenever a breakout of the support or resistance level takes place. 

On above price chart, we can see a breakout of the support-1 took place. For aggressive traders this is an opportunity to place a sell order. The stop loss for the order can be placed just above the support level broken, and the profit target for the orders can be placed at the lower support level. 

Aggressive traders are brave traders, sometimes they dance with winning trades while others cursing their conservative psychology of trading. But the situation can be turned around like the market time shown in the above illustration, where breakout of resistance-1 is taken place and the aggressive traders started eating the sour grapes. 

Experiencing such kind of market situations, smart traders started considering the reliability of breakouts and here comes the safe way of breakouts trading. The reliability of breakouts can be measured in so many different ways. One of the popular way to measure the reliability of breakouts is considering the retesting of support and resistance levels by price.

In above price chart we can see that the price retested the resistance level at pivot point and then broke the resistance level. Traders applying safe way of trading breakouts would consider this as an opportunity to place a buy order. The stop loss for this order can be placed just below the resistance level broken, and the profit target for the order can be placed at the next resistance level. The problem with the technique of measuring reliability of a breakout with retesting a support or resistance level may not be effective in some cases. One of such situations is illustrated below.

In above price chart we can see price retests a resistance level then breaks it, but still the traders applying safe way of breakouts trading are not enjoying the situation. That is why the other techniques of measuring reliability of breakouts should come into consideration. Even some times price retests a support or resistance level for several times, which makes a horizontal channel. 

In bottom line, no trading strategy can be developed to explain the market situations or indicate the market directions 100% accurately. Both aggressive way and safe way of trading breakouts have some advantages and disadvantages. 

Dear Traders,If you have any question regarding this post, you can drop it into the comment section below. I generally respond to your comments within 24 hours.

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Saturday, October 8, 2016

HOW TO USE PIVOT POINTS FOR RANGE TRADING

Pivot Point is simply an average price level in a given period of time e.g. the daily pivot point refers to the average price of the previous day. Similarly, pivot point can be weekly, monthly or yearly. The time frame of a pivot point analysis depends on the traders type and trading goals.

We know in pivot point analysis we get a pivot point and some support and resistance levels. The lower support levels are stronger than the higher support levels, and the higher resistance levels are stronger than the lower resistance levels. And in pivot point analysis support and resistance levels are placed at different distance from pivot point.

Generally, when the price touches a support level, we consider it as an opportunity to place a buy order, and when the price touches a resistance level, we consider it as an opportunity to place a sell order. This technique is applicable in case of range trading with pivot point analysis.

On the above price chart, we found an opportunity to place a buy order because the price touches the first support level. For this order we can place our stop loss at second support level or at 50% of the channel created by the S1 and S2 support lines. The profit target for the order can be placed at pivot point or resistance level just above the pivot point.

On the above price chart, we found an opportunity to place a sell order because the price touches the first resistance level. For this order we can place our stop loss at second resistance level or at 50% of the channel created by the R1 and R2 support lines. The profit target for the order can be placed at pivot point or support level just below the pivot point.

It is not that simple! These are the very basic of range trading with pivot point analysis. To ensure accuracy of range trading with pivot point analysis smart traders ask the following questions.
  1. Is there any candlesticks pattern formed when price is touching a support or resistance level?
  2. Are there any other support and resistance levels exist?
  3. Is there any chart pattern formed?
  4. Does market have enough strength to break the support or resistance levels?
We know there are so many candlesticks pattern that signals market reversals. If at a support or resistance level of pivot point analysis a candle sticks pattern is found, an order can be placed more confidently.

On a price chart support and resistance levels can be drawn in many different ways e.g. a trend line, a fibonacci retracement level, a moving average or a fibonacci fan line. If the price touching a support or resistance level of pivot point analysis and a support or resistance levels drawn with any other tools, the order can be placed more profitably.

On the price chart of financial instruments, the chart patterns are very often formed. If at a support or resistance level a chart pattern is formed, an accurate order can be placed when the chart pattern is broken out by the price.

It is not always true that market will reach a support and resistance level and be reversed, but market can also break a support or resistance level to reach the next support or resistance level. If market breaks a support or resistance level, the orders placed at that level are completely losing.

In bottom line, if a trader can find out the best answers of the above stated questions, he/she can be successful in range trading. We all know no trading tools and techniques are alone sufficient to hunt winning trades.

Dear Traders,If you have any question regarding this post, you can drop it into the comment section below. I generally respond to your comments within 24 hours.

You can also subscribe yourFXguide to receive updates right into your inbox. Simply, enter your email address into the email subscription box and click subscribe, then sign into your inbox and click the confirmation link. Thank you !!!

HOW CAN WE INTERPRET BIG GREEN CANDLE & BIG RED CANDLE ON CANDLESTICKS CHART

your F X guide- Candlesticks chart patterns are very simple to identify and very effective to trade. Generally, we find two kinds of can...