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Tutorials for Forex Beginners

This section aims at providing the basic knowledge for the beginning forex traders. The following topics are covered.

  • Basic Concepts
  • Technical Analysis
  • Candlesticks Charting
  • Chart Patterns
  • Fibonacci Analysis
  • Technical Indicators

For more advanced trading strategies, remember to download our free ebook Advanced Candlesticks and Ichimoku Strategies for Forex Trading



Technical Analysis IV: Identify the Market Trend Print E-mail
Beginners Tutorials | Written by ActionForex.com |
A trend represents a general direction of the market. Dow Theory asserts that major trends have three distinct phases: accumulation, public participation and distribution. The accumulation phase represents the first part of the trend in which those who are well-informed buy or sell. In other words, if the well-informed recognize that the recent downtrend is soon coming to an end, they would buy, and vice versa.
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Technical Analysis V: Trending and Ranging Markets Print E-mail
Beginners Tutorials | Written by ActionForex.com |
The existence of a trend in any market depends on a series of relative highs and lows. Two consecutive relative highs, each above the previous relative high, and two relative lows above the previous low would be constitute a tentative up-trend. A third relative high would confirm the trend.
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Technical Analysis VI: Trend Lines Print E-mail
Beginners Tutorials | Written by ActionForex.com |
Trend lines are lines drawn on the historical price levels that depict general direction of where the marking is heading, and provide indications of support or resistance. Drawing trend lines is a highly subjective matter. The best test of whether a trend line is a valid one is usually whether it looks like a good line. In an up trend, a trend line should connect the relative low points on the chart. A line connecting the lows in a longer-term rally will be a support line that can provide a floor for partial retracements. The down trend line that connects the relative highs on the chart will similarly act as resistance to shorter moves back higher.
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Technical Analysis VII: Trading the Trend Lines Print E-mail
Beginners Tutorials | Written by ActionForex.com |
Only one of two things can happen when a price approaches support or resistance: the price can break through it, or it can bounce off and reverse direction. The same is of course true for trend lines. If a chart is trending in a clear direction, and a trend line can be drawn connecting a series of relative highs or relative lows, trading opportunities exist when the price approaches the trend line.
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Technical Analysis VIII: Price Channels Print E-mail
Beginners Tutorials | Written by ActionForex.com |
A trending market can move between parallel support and resistance levels. A price channel between two parallel lines can often be drawn in a trending market. The key to a price channel is that the lines be parallel to each other. The value of the price channel in predicting the ongoing speed of a trend depends on the lines being parallel.
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Candlestick I: Introduction to Candlestick and its patterns Print E-mail
Beginners Tutorials | Written by ActionForex.com |
Candlestick charts shows information about the price action and the movement of the currency price over a specified period of time. It contains the market's open, closing, low and high of that specific time frame. Below is an analysis of a candlestick chart and its components.
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Candlestick II: Spikes Days Print E-mail
Beginners Tutorials | Written by ActionForex.com |
A spike high is a period whose high is sharply above both the high of the previous period as well as the high of the following period. Conversely, a spike low is a day whose low price is sharply below both the low of the following period as well as the low of the previous period. Spikes can often signal reversals of the most recent trends and they can often look similar to hammers and hanging man.
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Candlestick III: Reversal Days Print E-mail
Beginners Tutorials | Written by ActionForex.com |
A reversal high day is a day in which the high price reaches a level higher than the previous high, and then reverses to close below the previous close. Like spike days, a reversal high day's mirror image is a reversal low day, in which the market sets a new low before reversing to close above the previous close. Also like spike days, the significance of reversal days increases when there is a preceding up trend (for reversal high days) or a preceding downtrend (for reversal low days).
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Candlestick IV: Thrust Day and Run Day Print E-mail
Beginners Tutorials | Written by ActionForex.com |
An up-thrust day is when the close for the current period surpasses the previous period's close. A down-thrust day is when the close for the current period is below the previous period's close. Similar to spike and reversal days, thrust days signify both the strength in the market as well as the possibility of directional reversals. A series of up-thrust days would suggest a pronounced up trend, while a series of down-thrust days would indicate a downtrend dictated by seller dominance in the market.
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Candlestick V: Using Candlestick Patterns in a Range bound Market Print E-mail
Beginners Tutorials | Written by ActionForex.com |
In a range bound market - meaning a market that does not possess a clear directional trend, but rather moves back and forth between support and resistance - traders are essentially looking to short at the top of the range, and buy at the bottom of the range. It is worth noting that this strategy often results in limited profits, as it does not seem to rely on identifying a trend. Nevertheless it can be useful in capturing many small moves for the trader who can maintain discipline and self-control while trading this strategy.
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