Dear Readers,
I am going to share a simple effective techniques of Trading Forex. There are a few pointers you need to understand as a novice in forex trading where trading in forex asset class is different from stocks / equities.
Important Pointers:
1) Swap interest - an interest payable or receivable by the trader for taking a long or short positions. Swap interest will actually affects your trade profits over a period of time holding on to the long or short positions, a trader is undertaking.
2) Forex is a trillion dollar marketplace as compare to stocks / equities billion dollar marketplace so it makes forex trading pretty violatile, liquidity marketplace 24/7 trading environment except on saturday and sunday.
3) Using correct timeframe charts for analysis and taking a long short positions. By using 1 hour timeframe is equilvalent to a Daily timeframe for trading stocks, 24 X 1 hour tading in forex is equivalent to 20 tradings days in a month, 4 hour timeframe is equilvalent to a Weekly timeframe for trading stocks, 6 X 4 hours in a day in trading forex is equivalent to 5 days trading in a week.
My preferred timeframe for Technical Analysis is using 1 hour and 4 hour timeframe to analyze the general maecro direction of the FX pair couple with Relative Strength Indicator (RSI 70 Overbought, 30 Oversold), if 1 hour and 4 hours chart timeframe couple with RSI oversold indicator is the time for my entry into a trade simple yet effective.
4) Should traders be observant enough, last 15 min into an hour trading is where the big moves comes in, there is no explaination why usually last 15 mins into an hour trading is very important to catch big moves upside or downside.
5) Strategic Geographical Timing in trading specific commodities currencies like XAUUSD (Gold) XAGUSD (Silver), because the global financials market is operated in an intertwined globalised world, the world nevers sleeps 24/7. There are certain lull and dull trading hours to avoid and vibrant trading hours to participate, consider trading in forex which a trader is observant enough, no need to glue to the trading desk 24/7 to trade profitably. Asian markets trading hours (7am to 5pm, GMT +08:00), European trading hours (1pm to 11pm, GMT +08:00) Wall Street trading hours are (10.30pm to 5.30am, GMT+08:00)
https://www.thestreet.com/investing/stocks/what-time-does-the-stock-market-open-14696671#:~:text=Japan's%20Tokyo%20Stock%20Exchange%20(TSE,00%20a.m.%2D4%3A30%20p.m.
On Fundamental Analysis (FA):
A trader has to understand and chart USD which is currently a global reserve currency where most commodities raw materials are priced in and for trade settlement. I would observed the DXY spot for basket in USD as the benchmark for trading other currencies against the greenback. USD weakens, the other currencies strengthen and vice-versa, should USD strengthen, the other currencies weaken often having an inverse-relationship with other currencies pair.
On Technical Analysis (TA):
A trader has to use correct timeframe (1 hour and 4 hours) couple with the RSI indicator to analyse and observe any bullish or bearish chart patterns.
On Fund Flow Analysis (FFA):
A Trader has to know where and how to extract the available fund flow analysis of the FX pair which i can't share any details on this critical link where this is my trade secrets.
Specialised Tools:
I have another special indicator to rely on picking the profitable trading FX pair which is to use a programming excel sheets to extract heatmap details on the current stengthening and weakening FX pair to increase my profit probabliity to 80%.
I hope that my readers will benefit from my knowledge trading in FX pair will help you to profit and gasp the general maecro direction that a trader is needed to know and understand.
Disclaimer: All news, information and charts shared is purely by my research and personal views only. This is not a trading recommendation or advice but on the basis of sharing information and educating the investment community. Different traders and investors adopt different trading strategies and risk management approach hence if in doubt please approach or seek clarifications with your Financial Adviser, Broker and Banker.
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