LISTEN TO THE WISDOM OF THE CANDLES

Your candles always have a tale to tell and you would be very wise to listen as they whisper hints about what is going on in the market. In order to trade your very best, it is very very important for you to learn to properly interpret the language of your chart. Now you can use either the bar or candlestick chart to do this, there is really no real difference in the information between the two, but the candles give you a clear immediate visual advantage over your bars. Whether you use bars or candles isn't as important as being able to understand what they are saying to you.

Learning to properly interpret this language will save you hundreds to several thousands of dollars. The trader who has taken the time and patience to learn this language heaps huge rewards as a benefit, but those who don't suffer the wrath of the market time and time again.

Now it is possible to have a perfect understanding of the market and still miss it. All the proper interpretation does is give you an advantage that will put profits in your pocket most of the time.

Your charts are always telling a story and if you can properly interpret that story the market will pay you big dividends for that knowledge.

Here is one of my favorite beginner candlestick video:



Also pick up Steve Nison's candlestick book at your local library: THE KNOWLEDGE IS THE POWER IN TRADING, and having it is the difference between going broke and thriving.

YOU CAN DO THIS (^_^)

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YOUR MARKET OPPONENT

Most traders are under the illusion that their greatest opponent in the market are the skilled pros out there who are waiting to gobble them up. While they are worthy opponents, there is an opponent even more worthy, if you go to the mirror, you will find them. The biggest enemy to trading successfully is YOU and your mindset.

The thing that usually demolishes traders besides getting into the game way too early (while they are still very, very green) is their lack of discipline and patience. The hardest thing in the market, especially if you are a natural Type A personality, is the waiting.

The natural type A makes the perfect forex victim, because we like to see things move and like to get things accomplished. While this is a very desirable trait in most other aspects of life, it can be to your determent in forex.



It is the incredible volatility and fast pace of forex that attracts us in the first place, but when the market is stagnant, it can make us nuts, often causing us to make premature ill-timed entries.

That is why it is essential to your long term success for you to perfect your WAIT!!!!!

What are you waiting???
For proper trade set-ups!

Trades in harmony with your trend will usually be the most profitable and give the most reliable signals.

LEARN YOUR CANDLESTICK PATTERNS!
LEARN YOUR TRENDS!!!
LEARN YOUR SUPPORT/RESISTANCE!!!!!
LEARN ABOUT MARKET RHYTHM!!!
LEARN MARKET PSYCHOLOGY!!!!!

AFTER LEARNING ALL OF THAT.

YOU MUST PERFECT THE ART OF WAITING !!!!!!!! (^_^)


YOU CAN DO THIS (^_^)


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TRADING PREDICTABLE

There are times when the market is murky, cloudy and choppy, but there are the sweet times when the market is crystal clear like a cool refreshing spring. That is when you want to be in it. Many traders try to swim in all market waters. This is a big mistakes. Dirty waters are full of sharks.

IF YOU DON'T CLEARLY SEE AN ADVANTAGE; DO NOT TRADE!!!!!



IF YOU CAN NOT SEE A TRADE SET-UP, IT IS PROBABLY BECAUSE THERE IS NOT ONE.

You may wait a whole day for a market set-up, never to get one. That is when traders get antsy and agitated and begin creating trades from thin air. Mostly ending up on the wrong side of the trade. WHY gamble with your capital like that?????????? THAT IS DUMB.

When the market is lost, let it wander, but you stay out. It is hard, I know, as all of your emotions are screaming at you not to miss out. Miss out on what??????

What you are missing out on is the set-up for the BIG KILL. SOMETIMES THERE IS NO TRADE and if you are wise, you except that and go find some other way to occupy your time. If you are no a pro, don't play the out-smart-the-market game, it will make road kill out of you fast. You may get away with it a time or two, but you can be sure that eventually it will catch up with you, because market strategies don't stay the same. It only takes that one 200-400 pip shake out day to change your world for the worst.

Trade when your trades are more predictable than not. Trade when the waters are cool, refreshing and crystal clear. Trade when the market is sending you a VERY CLEAR invitaion to jump in. If the water is murky, you can believe there are sharks. SWIM AT YOUR OWN RISK !!!!

YOU CAN DO THIS (^_^)

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SUPPORT BOUNCE

Price will only fall so far before you get a bounce off of or near a support. Price WILL NOT fall indefinitely. Be extra careful when price makes a new low because one or two things are going to happen, it will either keep falling or it will bounce. More than likely, it will make a make a strong bounce.

Why????? because all of the sellers have gotten on board to sell. When there are no more sellers, the only logical thing to happen is for the buyers to come in and buy in force, creating a strong upwards bounce, trapping the sellers at the bottom.



Price falls strongly as long as there are sellers, but when the sellers are all gone BAM!!!!!! you have an upward explosion with nothing to slow the force of the powerful move upward. Now many of the traders trapped at the bottom are also forced to sell, creating more momentum for the upward move and prices continue to rise.

When you make an all new low and you get sideways action. Wait it out until you are sure you know where price is headed. If you get trapped, free yourself as soon as you can even if it means taking a small loss. It is better to be upset that you missed out on a great trade than to find yourself trapped in a trade that you wish you hadn't taken.

REMEMBER SUPPORT = BOUNCE, until price shows you differently. No matter what, wait for proper reversal/continuation signals near support before you enter the trade and please wait for your candle to close before making your trading decision. Those few pips that you think you will gain by beating out your competition are NOT WORTH IT.
All of the pros know to wait for an advantageous set-up and so should you (^_^)

YOU CAN DO THIS (^_^)



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TRICK CANDLES

There are two very tricky candles that I must warn you about. Both are part of the umbrella group. The first is the shooting star. The shooting star comes at the top on an uptrend and has a shadow twice the size of the real body. The thing about the shooting star is that it opens near the bottom of the candle goes up to create the illustration of a strong bullish candle, quickly turns on you, and closes near it's open. It can be bullish or bearish, but a bearish shooting star is stronger and more likely to create a reversal than a bullish shooting star.

A shooting star happens when the bulls are running strong with the ball , and it looks like they are going to score when the bears come in and slam them at the last minute. Many times the bears take over then run the ball the other way.  Sometimes there is a fight and there is a sideways standoff for a while.
The hammer is the other trick candle that you want to be aware of. A hammer come at the end of a downtrend and will mislead you with the idea that it is going to continue in a bearish fashion before price turns traitor on you. It is called a hammer because it looks like a hammer. A hammer opens near the top of the candle, falls strong before reversing on you, creating a lower shadow that is twice the size of it's real body . When you see a hammer form, it is a sign that you need to protect your profits.

The thing that is detrimental about the shooting star/hammer is that if you enter either before it closes, you will more than likely find yourself on the far end of the WRONG SIDE of the trade. If you are using candles as trading flagships, always let them close before you jump into a trade. Impatience in the face of either of these candles will break you fast.



YOU CAN DO THIS (^_^)

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WAIT FOR PROPER CONFIRMATION SIGNALS

The biggest challenge to being a successful trader is waiting for proper confirmation signals before entering a trade. Many traders play the guessing game with the market even when they understand that they should buy low and sell high. In a bull market when they think price has gone up far enough, they sell and when they feel it has gone low enough, they buy to get a jump on the market, for what they are hoping is a big pay check. This kind of thinking is often Market Suicide, and will get you killed.

Price in a trend is like a locomotive freight train, it will run you over and never even feel you. You have got to wait until the breaks are applied and the train does a u-turn before trying to sell tops or buy bottoms. YOU CAN NOT GET A JUMP ON THE MARKET unless you are psychic. The market has successfully tricked traders for hundreds of years and is very efficient at it.

YOU CAN NEVER OUT GUESS THE MARKET !!!!! You can only follow where it leads, hoping it doesn't turn on you like a mad dog.

Sometimes you will wait for a proper set-up and still get stopped out, but waiting for a proper set-up is going to give you the greatest chance for success and put the odds the most in your favor.

There is no perfect strategy, but you are looking for one that will put you on the right side of the trade most of the time. Remember everyday your market is different, so develop a strategy for every kind of trading market. (The bullish, the bearish, consolidation and choppy). As a trader you will take an occasional hit, but it is the end of the month profit that you are looking to, not the end of the day profit. It is ok to lose a battle every now and then as long as you win the war.

The most simple trading strategy is to follow the current trend until your candlesticks tell you differently. A good trader spends much more time waiting than trading. LEARN THE PSYCHOLOGY OF YOUR CANDLES AND YOUR CANDLESTICK PATTERNS !!!!!!!!

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NO MAN'S LAND. GUEST POST

The No Man's Land Strategy is actually a very simple strategy.

It is based on Multiple Time Frames, Moving Averages (5 - 22 - 42) , and Pivot Points (for Support and Resistance), and I only run it on GBP.

The signal is generated from H4 Candle. I take the previous High + 10 pips ( you may use any number you like) + spread as a Buy Stop Order, while for the Sell Stop Order is previous Low - 10 pips.

Suppose I have a target 20 pips from my Buy Stop or Sell Stop Order. I then look to see whether there are some Support/Resistance or MA or Trendline Support/Resistance ahead to act as a barrier to the move I want to make. If there is, then I use the next S/R or MA or trendline S/R as a new point of calculation for my Buy Stop or Sell Stop Order. I repeat this step on the H4, H1, M30, M15 and M5.

Here is an example :
Prev High of H4 : 1.6300
Prev Low of H4 : 1.6250
Spread : 3 pips

Buy Stop order : 1.6300 + 10 + 3 = 1.6313 --> TP 20 pips = 1.6333
Sell Stop order : 1.6250 - 10 = 1.6240 --> TP 20 pips = 1.6220

I check my H4 Chart, to see if there is any resistance from 1.6313 to 1.6333, if not, then I go to my H1.
I continue repeating the above step. Suppose I find Resistance on 1.6320. I then recalculate making 1.6320 the new basis for calculating my Buy Stop Order.
So my new calculation is : 1.6320 + 10 + 3 = 1.6333 ---> TP 20 pips = 1.6353.
Then I recheck to see if there is any resistance that might prevent me from reaching my new target.

I do this until I get to M5.

This is why I called this strategy : No Man's Land.
Pivot's, S/R, MA, Trendline's S/R are things that I consider landowners.

For example:
There is Pivot Resistance at 1.6250 and Trendline's R on 1.6265. This 15 pips distance I consider as "Pivot's Land and Trendline's Land."
I don't want to fight either Land's owner, so I avoid them. I prefer to trade on "No Man's Land" where, there is no land owner who will be angry if I steal a few pips from the market.

I do the exact opposite for my Sell Stop Order. For the trendline I use the DeMark Indicator found at the Forex Factory.

The idea behind this strategy is to make a high percentage of winning trades. It works very nicely at the London open, around 6-7 GMT, depending on H4 cycle from the broker's chart we use to analyze. ( I like to use the ALPARI-UK, as I trade the London open).

I usually look to gain 20 pips; but if I am constantly profitable with this strategy, I think I can be one of the few winner in the forex market. The BIG BOSS who drives the market, that come from the big financial institutions and old-fashioned people who use just candlestick pattern and support-resistance as their trading guide; I am trying not to fight them, but to align myself with them.

Thanks Eko and Aan

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STOP LOSSES ARE YOUR FRIENDS

Many traders fear placing stop losses because they are afraid that they will get stopped out. This is the wrong mindset. A stop loss is a friend that helps you preserve your capital when you are on the wrong side of the trade.

A stop loss is simply what it says, it is a system that you put in place to stop the loss of your capital, just in case the trade goes against you strongly. Don't place stop losses with the idea that you are going to get stopped out, but place it with the idea that you are protected if a trade does something differently than you expect. It will give you the opportunity, if it is hit to step back and position yourself for a more profitable trade set-up and entry.

What happens when you ride a losing trade to long. It depresses your emotions. It keeps you locked in a losing mentality. It takes up margin that you can be using on a better more profitable trade. A stop loss gives you the freedom to move on, and be free from all of the negative things that comes from seeing that losing trade over and over.

Even if you have the capital to ride out a losing trade for months, then whenever you see a more profitable trade set-up in that same currency pair, you are not free to take advantage of that new opportunity because you are stuck in a losing trade waiting for it to turn back in your favor......one day 8^( .

Let's go back and look at that trade from day one. What if you had taken that hit the first day with a 60pip loss. That is quite a hit. You could have simply made 10 pips a day for the next 7 trading days, and you'd be a head 10pips. What that would have done is free up your capital as well as your mindset. There is an extra confidence that comes when you go to your platform with no losing trades staring you in the face. It is a feeling of power.

Instead you decided to hold that trade 7 trading days. Now you are in the hole 150 pips, plus you paid 7 days of rollover fees, but things have begin to turn in your favor like you knew they would. That is 7 days that you have locked yourself out of more profitable trades in that currency pair, and who knows when you are going to break even on that pair.

When you have losing trades on your platform, then you are fearful of taking other good trades that you see, because of your margin level, the new trade may go against you and wipe you out, or any number of negative messages that we hear in our heads when we are in losing trades.

Dearest traders stop losses are your Friends. Here is a video that can help you decide how you may want to place your stop losses.

Placing Stops, Traders Whiteboard #4 Click Here

I am certainly not encouraging you to take unnecessary losses, if you are in a situation where you are in harmony with your trend and you have a little retracement that has gone against you temporarily, by all means allow that trade to close profitable.

Just don't allow losses to run on and on and on and on, because it's like spiderwebs in the mind and pretty soon, they cloud your vision and your judgment until you are paralyzed and can not do anything until that position comes back into profit. It is better to be out of a good trade wishing that you were in, than to be held hostage in a bad trade that you wish you were out of. Lastly letting trades go to far against you is just breeding grounds for stress and anxiety.

Remember strong dips and rally punish traders who don't have proper stop losses in place.

Trade well, Live Well, Laugh a lot and have Loads of Fun (^_^)


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This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

New NFA Regulation

What do the new NFA Regulations mean for you?

For those of you who have not fully grasp what it means for you, it means that you will have to have more money to hold the same size positions that you have been holding.

If you have an open position with a 200:1 margin, that requires $500.00 to keep the position opened; when the new rule goes into effect, that same position will require you to have $1,000 to keep it opened.

If you don't have the required margin, your position will be liquidated by your broker, unless they have told you otherwise.

PLEASE CHECK all of your open positions to be sure that you are not in danger of being liquidated. If you are unsure, please call your broker to be sure that your open positions are going to stay safe. Thank you

Taking a loss

This is a really important subject that I need to deal with because taking a loss paralyzes most traders and keep them for potential future profits.

Many traders equate losing a trade with being a loser, allowing that loss to paralyze them and cripple their judgment. This is the wrong attitude toward a loss.

A loss is only a lesson that you have paid for, learn from it. You pay for college and you pay for seminars, and you never beat yourself up for paying to increase your knowledge in those arenas. My Friend a loss is simply an opportunity that you have paid for to increase your knowledge.





When you pay thousands for college or a seminar, you never say, how could I have been so stupid, why did I do that. The truth is, a loss is just an opportunity to learn. STOP BEATING YOURSELF UP FOR WHAT IS ONLY A NATURAL PART OF TRADING. That attitude only puts you at a huge disadvantage to other traders.

The successful trader understands that the market is very generous and will give him/her plenty of opportunities for a profit.

One day, this is before I learned better, I lost about half of my account balance. I simply waited until price hit the lower trend line and went long. It only gave me the opportunity to recover a little more than half of what I loss, before continuing downward, but it was more than I would have gotten had I done nothing.

There are no absolutes in trading. Trading is more of an art of interpretation. Too many traders see losses as a flaw with themselves instead of seeing a loss for what it really is. A LOSS IS ONLY A LESSON TO HELP YOU TRADE MORE EFFICIENTLY. A LOSS GIVES YOU THE CHANCE TO IMPROVE AND PERFECT YOUR STRATEGY, IT SIMPLY TEACHES YOU WHAT DOESN'T WORK, SO THAT YOU CAN DISCOVER WHAT DOES WORK.

You can have a perfect analysis and still enter a losing trade, because the market sentiment can change, like with an engulfing pattern. It happens and it is OK.

When we set up a trade we have expectations of how that trade is going to play out. A loss is a great disappointment to that picture and a bruise to the ego. We have more trouble letting go of the dream of our glorious ideal trade, than we do taking the loss. The money is gone and it is over, but we still hang on, allowing that one hit to ruin our day and sometimes our week.

A loss allows you to build a new more profitable trading dream for yourself. LET GO of that old dream that no longer fits you and climb into a new successful dream that is more becoming of you.

STOP !!! LETTING LOSSES BE A REFLECTION OF WHO YOU ARE ! It is just part of the game. Learn it's lesson and move on.

A LOSS IS A LESSON (^_^). YOU PAID FOR IT. IT HAS SO MUCH WISDOM TO TEACH YOU, IF YOU'D ONLY LISTEN. THIS IS ONLY ANOTHER OPPORTUNITY TO PERFECT YOUR STRATEGY

Learn from your losses so that you can move on more quickly to capture more profitable trades.

TRADE WELL (^_^)

Traders Whiteboard #4 Click Here

This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

YOUR FOREX EDUCATION 8^)

As a forex trader, you have entered one of the most difficult and tricky playgrounds in the world; with price hiccups and retracements often causing you to second guess your previous decision. In a market with so much panic and loss going on. Allow me to ask you; how much time have you invested in your Forex education today??????

Many highly competent professionals who are at the top in other fields come into Forex and get wiped out. The most important thing you can do to insure your success in Forex is to keep learning. When you are in the market live, you need this stuff to be automatic, because lots of time when you see price moving randomly, you forget your objective.

Everyday, take some time and invest in educating yourself in this market, if you don't, you will lose here. Once you learn what is going on, you will find that Forex is not hard, but it is no stroll in the park either. You must stay alert, develop patience and be ready when the opportunity for profit presents itself.

Keep a practice account, because it helps build market confidence and helps you overcome many of the fears that have been created from your losses.

When you have taken a loss in the market, it is an education you paid for. Learn from it!

Continual education gives you the advantage. Never stop learning!

Lastly you can be successful at Forex! While experience is a great teacher, it is not necessarily the best; pick the brain of a good trader when you can. When you learn something important from your chart studies, a book, a video or another trader; WRITE IT DOWN!

Discard what doesn't work, and review what does OFTEN!!!!!

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Happy Trading!

This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.


Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.

Guest post: My forex trading

HOW TO BEGIN LEARNING MY FOREX TRADING


- Forex isn't a place where you're gonna become rich over the night, it isn't made for this purpose.

1. I think that new traders shouldn't use leverage at all !!!(1:1)

2. They should a find pair that is fully up or down on a monthly basis.

3. If price is at an all time high, then they need to consider exactly where to sell!
If price is at an all time low, then they need to consider where to buy !
(Only with a proper candlestick reversal confirmation, on a smaller time frame like the weekly chart)

4. Learn the ABC's or 123's of trends to understand price behavior because price is the number one indicator !

Traders Whiteboard #4 Click Here Using Stop losses!

5. Learn to use moving averages (I use SMA 5,10,20,100)!

6. If you don't use leverage, you don't need money management!

7. When your position shows profit, put your stop loss order on break even!

8. When you are in profit, don't be greedy! Take little and repeat when you have a chance!

9. If you don't use leverage, you don't need to use STOPS

WHEN YOU BUY OR SELL CURRENCY, YOU NEED TO KNOW WHAT IS HAPPENING WITH THE ECONOMY IN THAT COUNTRY AND EVERY OTHER COUNTRY THAT IS RELATED TO IT.

Bloomberg or CNN are excellent choices to work with.

NOW YOU CAN START STUDYING THE FOREX MARKET!!!

T. Forex

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This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.

Trading Strategy

This is my contribution to an easy trading strategy for new traders. It is an effective strategy, that is easily traded. Please keep in mind that price can go as far as the previous day's high or low depending on the direction of your steps. Also be mindful that this is a short term strategy. Have a killer trading week, and make money!!!!!!!!!!




Here is a link to some more free lessons. Some of them are actually good!

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This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.

WHEN TRENDS TURN

As you have probably already read, I love trends; but what happens when a trend turns. No matter what time period you trade your trend will eventually turn. It is essential to the well being of your successful long term trading life that you can recognize the beginning of a trend turn.

The first sign of a trend turn usually come in the form of a candlestick reversal formation. Then you will eventually get a trendline break. That is why it is essential that you learn to read candlesticks like a master musician learns to read sheet music.

Things you want to look for in a valid trend turn are:

1. Price that has really been in a trend for a while, and a valid candlestick reversal signal). (Except on a smaller time frame, those trends can change rapidly)

2. A treadline break is usually a good sign. On the trendline break, be sure to wait for the candle to close. If it closes outside of the line you may want to confirm the validity of the breakout with an indicator such as a MA. I am not a huge fan of indicators because they are lagging data, but in this case, it would be wise to use one, which ever one best suits you. In a valid trend break your MA will usually be broken too.

3. I think the most important piece in a valid reversal is if price surpassed the previous relevant high/low.

Many times a good buy signal comes when a candlestick closes above the trendline, in a downtrend, though not always. A good sell signal could come from the close of a candle below the trendline , in an uptrend. This is where either patience, indicators or a combination of both come in handy.

If the trendline break is not valid (meaning it broke trend only temporarily), then you can redraw your trendline, or add another one to include the new high/low.

Very important if you trade against a long term established trend, expect it to be a short term ride. Get in and get out. The shorter the time frame the faster you'd better get out after you see that you have lost your advantage  No matter what time frame you made your counter trend trade, just know that it will eventually turn to continue to follow the major trend. A counter trend trade is like a river temporarily diverted, the trend will eventually resume it's course. There are always trends within trends or hiccups/retracement, price never move straight up or straight down. It is essential that you know your major trend direction.

A breakout from trend can also be a valid exit signal to close out your profits.

Trend reversals are important because most traders want to buy near the bottom when price begins to move up and sell near the top when price begins to decline, and that means waiting for a proper confirmation before jumping in and getting your butt handed to you.

A reversal signal can be good for 0pips- 1100pips depending on your chart time frame and your patience level. For example the 5 min chart will give you many trading opportunities, but they are less reliable; whereas the monthly chart is much more likely to provide more accurate signals, so far this year it has provided 4 really good bounces for the USD/YEN pair. Longer term traders were able to capitalize on those opportunities, but they are a whole league unto themselves.

Remember, though trends tend to continue, nothing goes on forever and if you are going to be a successful trader, you are going to have to remind yourself that neither price nor trend heads in the same direction perpetually. In order to trade successfully you have got to be flexible. If you, like me, have been bearish all of 2009, you have got to know when to become bullish when there's a bounce in the market. Know when to hold em' know when to fold em, know when to walk away and know when to grab your profits and run.
As it stands; I don't plan to do a blog on candlestick formations, but you are welcome to go to my youtube channel where I have downloaded videos that I think are very helpful to new or a fresher for the more experienced traders. Please copy and paste the link:

http://www.youtube.com/user/TRADERSFRIEND.For a more in-dept look at candles read any of Steve Nison's Japanese Candle Trading books available on-line or at your local library. If you are going to purchase it, ebay is usually an excellent source for on-line trading materials.

Remember a consistently profitable trader spends more time waiting for valid entry signal than actually trading and that is a whole discipline unto itself(BIG SMILE)

HAPPY TRADING!!!!

Get 10 Trading Lessons FREE Click HereThis blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Trend lines

Now we are about to embark on what is almost sacred territory for me, 'trendlines'. Ahhhh..... What a most glorious word. Trendlines are one of my favor trading tools. If there is a pot of gold at the end of the rainbow in trading for me, I would have say that it is trendlines.

Why?????? Because using trend lines properly will put you on the right side of the trade most of the time. I personally use trendlines in all of my trading. Now for those of you who have used trendlines and it hasn't worked out for you. Please remember that the shorter the time frame you trade, the more your trend is likely to change. My advice is to find the prevailing trend and trade in harmony with it. Example, if the trend is bullish (going up) on the 30min charts and you trade the five minute chart. If the trend is bearish (going down) on the five minute chart, don't take that trade. It is much more likely that the trend will reverse on you than if you wait for a trade that is in harmony with the bullish trend.

Please allow me to elaborate. If you are trading that five minute chart and price has dropped 30pips, you need to wait for a good candlestick reversal confirmation and a trendline break, before going long. Candlesticks are very often the first sign of a trend reversal. The break of the trendline is just further confirmation. If you trade the five minute chart, you want to get in and get out fast!!! Remember on the five minute the direction of the trend is going to change frequently. The shorter your time frame the less reliable your trend, or your candlestick confirmation. On the smaller time frames, snatch your money and go!!!!!!!!!

Ok........What is a trend? A trend is the tendency for price to move (overall) in one direction for a period of time. I say overall, because you get price retracements and corrections. That is when price temporary takes a pause or temporarily reverses from the major trend.

It is essential that if you chose to use trendlines as part of your trading strategy that you determine the direction of price on a larger time frame, so that you know how to best trade your strategy and for how long.

For example if you are in the mist of a bullish price trend on the daily chart and it is bearish on the monthly chart, then you need to be aware that price will reverse in the direction of the major trend at some point, sometimes in as little as 2days. However if you are bullish on the both the daily and the monthly chart, you stand a much greater chance at a longer more successful bullish run.

The reason to determine your trend before you begin trading is because when you sit in front of the monitor all day with price pullbacks and spikes, it is hard to determine the primary trend.

When I first started to trade, I would sit up and watch price move for about 15-30 mins and some times longer, because I wanted to make sure that I was on the right side of the trade before I committed my hard earned money. I would wait just long enough until the end of a rally or dip and I'd find myself on the wrong side of the trade and couldn't figure out why. It was almost as if the broker was just waiting for me to put in my order before price went the other way against me. My early trading life was extremely frustrating and eventually I went broke. I was staying up most of the 24 hours trading and traded all three markets; studying my butt of in between. I stretched my brains with all of the complex theories, and learned all of the indicators, and was still getting killed in the market. After all of that, I had to find what worked for me. Price action.........that is it and I use trendlines and candlestick formations to help me maximize my trading strategies.

Your trendline is diagonal support or resistance, it is that barrier that price is least likely to break. The longer the time frame the more reliable your trendlines. Though trends eventually break.

Traders Whiteboard #1 Traders White Board #1

Drawing trendlines.

To determine if you are in a bearish or bullish trend you will need to draw trendlines...........

For a bearish trend ( a trend in which price is making a series of lower highs) you want to draw your trendline connecting two relevant/major highs, then your trendline should project itself from there.
This is a picture of a downtrend with a bullish break at the end.

Video Lesson: Trading a Downward Trending Market Click Here

For a bullish trend ( a trend in which price is making higher lows) you want to draw your trendline below price, connecting relevant lows, then your line will project itself from there.

This is an uptrend with a 20period moving average.

How to find the Trend and How to TRADE the Trend Video Lesson Click Here

Lastly I want to touch on a trend channel. A trend channel can be bullish or bearish; but in a trend channel you want to connect both the relevant highs and the relevant lows to form a price channel that forms diagonal support/resistance.

An example of a bearish channel. This is a longer term channel, but I included enough of it so that you can see how price bounced off of support and resistance clearly defining buy/sell zones.

I do want to warn you that price will not always fit perfectly in your trend projections, it can be quite naughty sometimes, but we will discuss that in a later blog "When trends turn"

Until we meet again my Friend.

Happy Trading!

For any questions you may contact me at TradersFriend@yahoo.com

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This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Margins/Leverage

Well, I am ready to talk about a biggie, the margin. What is margin? A margin is money we put up as collateral to our broker to cover credit risk on the money the broker has lent to us. A margin gives you leverage (magnification). Leverage is an amount of money a broker lends an investor to buy securities, in our case currency.

The thing that makes margins/leverage so attractive is that it can increase your potential returns). In a 50:1 ratio, for every $1.00 you invest your broker is extending $50.00 to increase your buying power. In a 100:1, it is $100.00 for every $1:00 you put up, and so on. Whoo Hoo! Nice broker, huh??????? The thing about leverage is it can either work for or against you. For most traders, it works against them, that is why your broker is willing to give it so freely. The expectation is it will help you deplete your account more quickly.

Forex is a zero sum game, for every penny you lose, someone else gains it, and it is usually the one who has the deepest pockets and can most afford to ride the volatility waves; so brokers can afford to allow you to over leverage because they have much deeper pockets and usually they win.

I have to mention this, there are some brokers that offer up to 750:1 ratios, stay away from them. I would not trade with a broker who offered more than a 400:1 ratio and believe me 400:1 is gamblers stakes. You work too hard for your money to willing give it over to the market.

How do you protect yourself against the downside of leverage???????

Decrease the size of your leverage. It will take away from that ideal wind fall, but it will also keep your account from being depleted fast.

If you are new to Forex, my advice is a 25:1 or 50:1 ratio, and decrease your lot size. Most of us don't start our accounts with $50,000, and if you are fortunate enough to, then you definitely don't want to give it to the market.

Remember leverage ONLY works for you if the market is moving in your favor. If it moves against you, then it magnifies your losses.

Happy trading!


This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Trader's friend

So you wanna get paid???? Well Forex is a great way to do it. This site is to try to give you some insight, so that you can avoid many of the pitfalls new traders encounter when they begin trading.

There are two really good ways to learn how to trade.

#1 You can go broke, like I did, or

#2 Learn from someone who knows how.

When you go broke trading, you do one or two things, quit or learn to trade, which is what I did.

When you fall in love with trading, you will find it is as addictive as a drug, but failing in the market repeatedly makes you feel like you are going to die.

Not to worry, you can learn to trade successfully.

#1 You must be disciplined,

#2 You must be patient

#3 You must K.I.S.S. (Keep it simple Sexy)

Trading isn't hard, just tricky, It is tricky because Trading goes against all of your logic and instincts, and makes no common sense, but not to worry, it can be almost mastered, I say almost because there are no fool proof systems of success in the market, all you can do is put the odds in your favor as much as possible.

While I am tempted to tell you everything in this introduction, we will go slowly.

Ok, I can't help it. Just a little advice along the lines of "trading isn't hard, just tricky";


The market never makes common sense to your mind or emotions, which keeps
you thrown off. Wait until you can clearly see an opportunity where you truly have
the odds in your favor and it may only happen twice a day, if that. This is physiological
warfare, a total mindfield(mind game) in which you have to have nerves of steal
and the ability to outwit those who make their living trading against you.

Thank you for visiting, please check back for lessons that can help you trade better.

If you have any Questions, please feel free to write to me at •*¨¨*•-:¦:-•* -

Tradersfriend@yahoo.com.

I will do my best to help

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This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.