Professional forex trader course
Professional forex trader course Besides, a trader should diversify their risk by spreading it out to about 5% of their total deposit per trade.
In case of any losses, they’ll not only be small but will not get out of hand.
Use Stop-Loss Orders and other strategic stops. The stop-loss order lets your broker know to sell a currency when it hits a certain set price.
These stops work around the clock in the forex market, therefore, protecting your position when you are logged out of the system.
In addition, the strategic stop caps the losses while also protecting profits. ⚠ Always start slow at first.
This helps in building the novice traders’ experience and confidence in their early days of trading.
Once you’ve learned the ins and outs of forex trading, you can consider increasing the leverage. When To Trade Forex? ⏰
simple profitable forex trading strategy
simple profitable forex trading strategy While the Forex market is open 24 hours a day, five days a week, trading is not always active during this entire time. Profits are made in forex trading when traders are bidding on the prices and the market is active. So it is essential that you know the crucial hours ⌚and days of forex trading when traders are the most active.
Different forex trading strategies
different forex trading strategies London session is usually the most active and in the afternoon overlaps with the opening of the New York or American session, so there can be good opportunities to trade forex and make a profit. ‼ Seasoned traders considered 10 am (EST) to be the best time to trade forex markets as, during this time, traders in London and Europe are preparing to close their positions and traders are getting ready to make a move in the American session.
As the focus shifts from Europe to the US, this often creates big swings in currency prices, opening up opportunities to profit.
BEFORE YOU INVEST IN SOMETHING, INVEST TIME TO UNDERSTAND IT /WARREN BUFFETT
What Are Bulls And Bears in Forex?
The “bull market” is when a financial instrument is trending in an upward manner. In other words, people are buying it. Conversely, the “bear market” is when a financial instrument is trending in a downward manner, as people are selling it. Of course, these are the most basic definitions for these two types of markets.
How To Read Charts In Forex?
how to read charts in forex? Let’s look at the three most popular types of forex charts: line chart, bar chart, and candlestick chart.
1 Line Chart It is the most basic of all forex charts. It is created by simply connecting the data points depicting the closing prices of certain periods with a line. Although it doesn’t include the opening, high and low prices, the line chart can give the trader an idea of how the price of a currency has changed over a given time frame. Therefore, they can track their closing prices accurately.
Bar Chart Unlike the line chart, the bar chart not only shows the closing prices but also depicts the opening, high and low prices of a certain period.
The graph is made up of a right and left dash, which shows the closing and opening prices respectively, and a vertical bar showing the currency’s low and high prices (trading range). They are also called the OHLC charts in reference to the Open, High, Low, and Close values of the currency under consideration.
Candlestick Chart They are the most popular charts among Forex traders. These charts are similar to bar charts only that they present the price information in an aesthetically pleasing graphic format. It also concentrates more on the opening and closing prices of the trading period.
Besides, unlike the line chart, which shows the closing prices, it charts the opening, high, low and closing prices of a currency pair over each period using “candlesticks.” The candlestick’s height depicts the high-low for that period while its width shows the difference between the opening and closing prices.
What Moves Forex Market?
Even if you don’t have time to stare at charts all day long, you can spot great trading opportunities by simply viewing the news and economic calendar on a daily basis.
In other words, by performing fundamental analysis. Basically, all fundamentals are indicators of where investors intend to put their money and which currencies will be influenced as a result. All the drivers are divided into 4 major categories: central banks, state economics, political stability, and natural disasters.
6 Biggest Forex Market Movers
1. Inflation
An economy’s inflation rate is one of the main determinants of a country’s exchange rate, defined as the general price level of goods and services. ❗❗A higher than the expected inflation rate is generally negative for the associated currency since the price level is relatively higher than inflation in other countries, diluting its value.❗❗
An economy’s inflation rate and the purchasing power of its currency are inversely related, where a lower rate of inflation translates to an improvement in purchasing power.
The difference between the two currencies ’ inflation rates is known as the inflation differential and if it begins to widen, you would want to buy the lower inflation currency and sell the higher inflation currency.
The major data release for inflation is the consumer price index (CPI), one of the strongest indicators of an economy’s health. A high inflation rate discourages investment, reduces the purchasing power of consumers, and makes planning for the future more difficult.
Conversely, a low and stable inflation rate encourages investment, increases the purchasing power of consumers and businesses can plan for the future more easily.
Similarly, the employment situation in the economy is another determinant of a country’s exchange rate, since economic activity can be framed in terms of employment and unemployment.
Since people possess skills, knowledge, and experience, this human capital can be used to produce more goods and services and improve productivity. The more people that are employed, the higher the economic output should be.
Therefore, employment data releases have a substantial effect on exchange rates. ❗❗A higher than expected employment rate should boost the currency in question, whereas a lower than expected employment rate should depress the value of that currency. ❗❗ For unemployment rates, this relationship is reversed where a higher than anticipated unemployment rate should act to depress the currency in question.
The most important employment data release in foreign exchange markets is the US Non-Farm Payroll figures. Some other important data releases are the unemployment rate, participation rate, and other labor market statistics, all of which have a moderate to high impact on exchange rates.
3. Trade balance
Trade with other countries is a major part of most economies and therefore the trade balance can affect the value of a currency. ❗❗If a country exports more and more goods and services, this will increase the demand for that currency and hence its price. However, if an economy increases its imports over time, this increases the selling pressure on that currency and it should depreciate over time. ❗❗
4. Quantitative easing
Quantitative easing is an unconventional monetary policy tool that is used to expand a central bank’s balance sheet. It is often compared to printing more money, as it expands the base money supply. Money supply and inflation are linked, where a higher money supply should translate into higher inflation and lower purchasing power. The USA, Eurozone, Japan, and the UK have all engaged in quantitative easing, with the Eurozone is the most aggressive. Also, the timing of their quantitative easing programs has differed.
5. Country politics
The political situation of a country can have a significant effect on its economy. A new president or prime minister might make radical changes to the economy. There’s no better example than Donald Trump in the US, who has been increasing protectionist measures by raising tariffs against other countries and introducing more obstacles for trade. ❗❗Similarly, a revolution or coup can severely affect a country’s currency as exchange rates are often based on the perception of an economy. If people do not feel like their money is safe in a country, they will sell that currency and seek a safe haven in a different currency.
6. Interest rates
Interest rates are the most important tool central banks have and they are used to influence lending and savings and borrowing or consumption. A higher interest rate incentivizes investment and saving since people will get more interest on their deposits and receive more in interest payments when borrowing to others.
However, a lower rate of interest incentivizes borrowing and consumption, since it is cheaper to borrow money for that new car or house someone has always wanted.
Support & Resistance This strategy follows the old business cliché, “buy low and sell high.” Forex traders quantify the levels of how low is a price’s low and how high it is by analyzing areas where prices have stopped and changed direction. The support refers to the level where the price rarely falls below before turning around, and the number of buyers exceeds that of sellers hence causing the price to rise. On the other hand, the resistance is the level where price rarely exceeds, and the number of sellers exceeds that of buys hence lowering the price down. In both cases, the price stops and turns around.
A Pinocchio bar is a candlestick bar that has a very small body and a very long wick (nose). It is also called Shooting Star, Hanging Man, and Gammer. You may remember that Pinnochio’s nose grew long when he was lying. The same happens with this strategy: when the wick is longer than the body, this tells us that the market is deceiving us and that we should trade the opposite way.
The entry point varies: some traders prefer to wait for the next candle to retrace to the 50% Fibonacci level of the Pin bar, while others enter immediately after the Pin bar closes. A long which indicated strong selling pressure; a long tail suggests intense buying power.
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