FOREX NEWBIE
WHAT IS FOREX?
The Forex (Foreign Exchange) Market is the largest market in the world. It is the market where currencies are traded. Each day, more than 4 trillion dollars are exchanged.
WHY TRADE FOREX?
24 hour Market
The Forex market is open 24 hours a day, so that you can be right there trading whenever you hear a financial scoop.
Narrow Focus
Unlike the stock market, a smaller market with tens of thousands of stocks to choose from, the Forex market revolves around more or less eight major currencies. A narrow choice means no room for confusion, so even though the market is huge, it’s quite easy to get a clear picture of what’s happening.
Liquidity
The enormous volume of daily trades makes it the most liquid market in the world, which means that under normal market conditions you can buy and sell currency as you please.
The Market cannot be cornered
The colossal size of the Forex market also makes sure that no one can corner the market. Even banks do not have enough pull to really control the market for a long period of time, which makes it a great place for the little guy to make a move.
Simplicity
Use technical analysis (indicators on charts) methods from other markets like equities.
BASIC FOREX TERMS
Listed below are some of the key terms used in Forex and CFD/Share trading
Pip – A Pip is the “Percentage In Point” (PIP), sometimes also referred to as “Point”. It is equal to the minimum price increase of a Forex trading rate. The most common Pip is 0.0001. – CLICK HERE FOR DETAILED INFORMATION ON PIPS
Ask price – The ask price is the price you can buy a currency at. It is also the price at which the market is willing to sell the currency to you.
Bid price – The bid price is the price you can sell a currency at. The market is willing to pay you this price for this particular currency.
Spreads – Spread are the difference between bid price and ask price.
Currency rate – A currency rate against another currency rate.
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FREE FOREX STRATEGY
Trend Analysis Concept on MT4 and TOS – Presented by Krystal Comber
Indicators used:
MACD – Set to Fast length: 12, Slow length: 26, MACD length: 9, Average type: SIMPLE
Heiken Ashi Candles (optional)
Moving Averages – set to SIMPLE and are 7, 14 and 31
For added confirmation on the entry of your trade, think about adding the RSI into the mix
RULES:
There are 4 rules to this concept
- Watch your chart on any timeframe at or above 15 minutes
- You want to watch for the MACD lines to cross or weakening of the bars, showing the start of the trend reversal
- Watch for the 7 and 14 moving averages to cross
- Wait for the candle to be below the 7 moving average on a sell or above the 7 moving average on a buy position before entering the trade
- Watch video 2 for support and resistance added confirmation on entry to trades
Adding the RSI or Relative Strength Index, along with MACD can really help to ensure solid trades. I have found that the combination of these two sets up some beautiful until expiry Nadex trades.
What you are looking for is the RSI line to break the 70 or 30. This is displaying that the price has been overbought or oversold. Upon re-entry, you want to watch the MACD and see if it is displaying the same trend direction. If both the RSI and MACD are displaying the same trend direction, then you would place an order on Nadex to sell at the top of the candle that entered back into the RSI 70 line, or a buy at the bottom of the candle that reentered the RSI 30 line for a top of the hour trade.
Let me show you some examples:
STRATEGY NAME – Enhanced Trend Analysis Concept
CHARTING PLATFORM – Any charting platform
FOR USE ON – Forex and Nadex
INDICATORS –
- MACD (12, 26, 9)
- Exponential Moving Averages 7, 14, 31 and 200
- RSI (14, 70, 30)
- Heiken Ashi (optional)
RULES –
Let’s start with the basics. If you are using Thinkorswim, you will need to complete the following steps:
- Open a new chart
- Right click on the chart and choose Studies > Edit Studies
- Add the MACD (12, 26, 9)
- Add Exponential Moving Averages 7, 14, 31 and 200
- Add the RSI (14, 70, 30)
If you are using MetaTrader 4, you will need to complete the following steps:
- Open a new chart
- File > Add indicators
- Add the MACD (12, 26, 9)
- Add Exponential Moving Averages 7, 14, 31 and 200
- Add the RSI (14, 70, 30)
(Note – It is optional to add Heiken Ashi candles as well, but not required)
There are 4 rules to this concept
- Watch your chart on any timeframe chart – I prefer 15 min for Nadex and 15 min or H1 for Forex
- You want to watch for the MACD lines to cross or weakening of the bars, showing the start of the trend reversal
- Watch for the 7 and 14 moving averages to cross
- Wait for the candle to be below the 7 moving average on a sell or above the 7 moving average on a buy position before entering the trade
- Where is price in relation to the 200 SMA? Stick to the overall trend my friend…if the trend is up, buy on dips, if the trend is down, sell on rises.
Adding the RSI or Relative Strength Index, along with MACD can really help to ensure solid trades. I have found that the combination of these two sets up some beautiful until expiry Nadex trades in addition to your forex trades.
What you are looking for is the RSI line to break the 70 or 30. This is displaying that the price has been overbought or oversold. Upon re-entry, you want to watch the MACD and see if it is displaying the same trend direction. If both the RSI and MACD are displaying the same trend direction, then you would place an order on Nadex to sell at the top of the candle that entered back into the RSI 70 line, or a buy at the bottom of the candle that reentered the RSI 30 line for a top of the hour trade.
VIDEO:
SCREENSHOTS:
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