Forex Trading Education For The London Open
A thorough Forex trading education must include an understanding of the effect market timings can have on trading and liquidity.
Good trading opportunities often arise at the time the London market opens as this can be one of the busiest trading times of the day.
As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.
The following questionnaire and checklist will help.
London Open Preparation
Browse your charts about 15 to 30 minutes before the London market opens and use these questions as a guide:
Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!
If there is divergence on the 4 hour, 1 hour or 15 minute charts on the MACD indicator, look for other signs that price may go in the direction of the divergence.
What is the overall trend on the 4 hour chart?
Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.
Using the 200 EMA (Exponential Moving Average) on three time frames, the 4 hour, 1 hour, and 15 minute, see if price is bucking the trend. In other words, if it is above the 200 EMA on the 15 minute chart but well below it on the 1 hour and 4 hour, there is a high possibility price will fall in the near future. The opposite of course is true if the position is revered, ie. price is below the 200 EMA on the 15 minute chart but above it on the 1 and 4 hour charts.
Are any Economic Reports imminent?
Looking at the candle that closes the first 15 minute period after London opens, do you see any distinctive patterns, or is the candle itself a doji or a hammer or any other shape indicating price exhaustion?
If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?
After waiting a few minutes from the time London opens, and you see a number of converging factors based on the analysis points given above, decide whether you are going to enter the market. Either:
trade
wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
You will be able to fine tune your analytical skills and be in touch with the underlying feel of the market.
Forex trading education does not depend on a magical formula. What it does entail is years of work, study, practice and experience, often hard earned through watching many trades go bad.
At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times - the hardest and most important aspect of Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading. - 23223
Good trading opportunities often arise at the time the London market opens as this can be one of the busiest trading times of the day.
As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.
The following questionnaire and checklist will help.
London Open Preparation
Browse your charts about 15 to 30 minutes before the London market opens and use these questions as a guide:
Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!
If there is divergence on the 4 hour, 1 hour or 15 minute charts on the MACD indicator, look for other signs that price may go in the direction of the divergence.
What is the overall trend on the 4 hour chart?
Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.
Using the 200 EMA (Exponential Moving Average) on three time frames, the 4 hour, 1 hour, and 15 minute, see if price is bucking the trend. In other words, if it is above the 200 EMA on the 15 minute chart but well below it on the 1 hour and 4 hour, there is a high possibility price will fall in the near future. The opposite of course is true if the position is revered, ie. price is below the 200 EMA on the 15 minute chart but above it on the 1 and 4 hour charts.
Are any Economic Reports imminent?
Looking at the candle that closes the first 15 minute period after London opens, do you see any distinctive patterns, or is the candle itself a doji or a hammer or any other shape indicating price exhaustion?
If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?
After waiting a few minutes from the time London opens, and you see a number of converging factors based on the analysis points given above, decide whether you are going to enter the market. Either:
trade
wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
You will be able to fine tune your analytical skills and be in touch with the underlying feel of the market.
Forex trading education does not depend on a magical formula. What it does entail is years of work, study, practice and experience, often hard earned through watching many trades go bad.
At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times - the hardest and most important aspect of Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading. - 23223
About the Author:
For a free candle & chart pattern recognition reference tool click here: Candlestick Charts See how to use trendlines to get an optimum trade entry point: Trendline Trader
posted by X - Men @ 2:29 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home