Many losses suffered by forex traders occur due to poorly timed market entries, e.g., entering a trade set-up too early or too late. Late entries can be largely prevented by adopting as a trading rule the tenet to never enter a trade more than 24 hours after a trade signal is generated. However, guarding against early entries is more problematical and requires more discretion on the part of the trader.
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Category : Technical Analysis Tags : Technical Analysis, trading forex
Sometimes a currency pair trends, with an inexorable unidirectional strength behind the price movement that encourages all traders to jump aboard for the ride. But sometimes it waffles, rising strongly then turning without warning. There’s no sense of direction, no certainty, and little opportunity to trade beyond scalping. A good example is the fifteen-minute chart of the U.S. dollar versus the Swiss franc, below:
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Category : Technical Analysis Tags : forex analysis, volatility
It’s not true that the forex trading market never gaps, as has been demonstrated on opening repeatedly this year. But the mechanics of gapping are slightly different here than in stock trading.
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Category : Indicators Tags : forex analysis, forex trading
For several months, it seemed financial markets had moved beyond risk aversion and returned to trading fundamentals and technicals. However, with that most volatile month of September looming and markets becoming jittery with the forecasted U.S. economic slowdown actually beginning, it’s worth reviewing the forex trading rules for a risk averse market.
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Category : Technical Analysis Tags : forex analysis, forex trading
Sometimes a currency strengthens or weakens beyond what the domestic economy can bear. When this happens, central bank intervention of some description is likely to occur, in an attempt to remove that inexorable pressure.
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Category : Trading Management Tags : central bank, forex trading