Understanding Risk:Reward For Real Success
Learn From The Best
First entry into any new endeavour is fraught with challenges and in the pursuit of excellence, the experience is a priceless asset. New traders can, however, expedite their learning process by avoiding the typical mistakes that rookies make and instead listening to and learning from the...
Supply and Demand Trading
In the following article, our objective is simple: to try and shed some light on how one can trade supply and demand on a chart. For those who are new to this concept, you may want to consider checking out this article before continuing as it provides a solid...
How to Identify Supply and Demand
Technical supply and demand is an approach based on price action. The general idea is to locate points on the chart where price has made a strong advance or decline. A demand zone is typically formed after a strong rally north. Conversely, a supply zone is effectively created following...
How to Trade the Wedge Pattern Objectively?
Trading with chart patterns can be one of the simplest ways to find highly profitable trade setups. Despite the ease of trading with chart patterns, there is quite some subjectivity involved which can be a put off for newcomers.
While there are many different chart patterns, one of the most...
How to Write a Trading Plan
The trading plan is a complete guide of what trader will do in the markets. The plan should include clear rules for entering and exiting the market, money management rules, as well as describe time frames, trading instruments. It should be drawn up before starting trading.
The trading plan consists...
Five Rules Around Managing Risk
Risk and reward are two sides of the same coin when it comes to trading the markets.
In fact, taking on, managing and, where possible, eliminating risk is one of the primary functions of the global markets. While it’s true that a higher level of risk may often be associated...
How to Trade Forex Using Fibonacci Retracements
How a centuries-old mathematical sequence can help traders identify entry or exit points in modern markets.
What if I told you there is a mathematical progression or series of numbers that could help you predict future price action in financial markets and instruments?
The progression of numbers I’m referring to has...
Pivot Points: Are They a Worthy Addition to Your Toolbox?
For one to say that support and resistance (S/R) is important would be a huge understatement. It’s absolutely crucial!
We would even go as far to say that without sound knowledge of S/R, your odds of success (particularly for technical traders) are significantly diminished.
The good news is that S/R comes...
Trading the Gartley harmonic pattern
The harmonic domain is a bizarre, yet intriguing, phenomenon for most traders.
While some dismiss the approach entirely, others are unable to trade without it.
Despite this separation, don’t let it discourage you from its teachings as it could prove to be a real game changer!
Harmonic patterns
Harmonic patterns are defined by...
Risk Management Techniques for Active Traders
“How a trade is implemented is more important than the trade idea itself” – Colm O’shea, Market Wizard.
Too many aspiring traders search for a “one size fits all” solution. Typically, aspiring traders think that there is a “best way” to be consistently profitable in the markets; they think that...
One Way to Build a Position – Pyramiding
"You need to figure out how to make money being right only 20-30% of the time." – Bill Lipschutz
As most aspiring traders should know, each time we step up to the plate and take a swing, we should be looking to maximize our return (per unit of risk). In...
Forex Price Action Techniques -Trading the Doji Candlestick
Forex price action, as one might have guessed now is a rather broad term and is, in fact, an umbrella term with various approaches involved to trading with forex price action. In this article, we will outline a few forex price action techniques that are independent of your trading...
Exploring the Trend Line
As humans we love to overcomplicate things!
While an elaborate trading strategy may impress your family and friends, it is unnecessary to succeed.
For those that have been involved in the markets for a while will know that keeping things simple is a MUST in trading. And that's why the trend...
How to Use the RSI Indicator in Forex
What is RSI?
RSI or Relative Strength Index (often referred to as RSI 14) is an indicator designed to track and compare the current price action in an instrument with historical data gathered on a rolling basis.
Did You Know?
The indicator was conceived and developed by J Welles Wilder, an American...
Basic Market Structure
While indicators certainly have a place, very little trumps good old fashioned market structure.
As you’ll see demonstrated in the following article, building trading ideas off basic market structure can be surprisingly easy, and more importantly, profitable!
Price movement
As much as we’d all love to see price trade linearly, particularly if...
Using Fibonacci Levels in Your Trading
An Italian mathematician who went by the name of Leonardo Pisano, or Leonardo of Pisa, was perhaps the most talented western mathematician of the middle ages. Better known by his nickname ‘Fibonacci’, he was the gentleman who discovered an interesting relationship between nature and numbers.
0, 1, 1, 2, 3,...
Moving Averages Explained
Among technical analysts, moving averages (MA) are one of the more commonly used indicators. In the right hands, these tools can be exceedingly powerful!
The two most popular moving averages are the simple moving average (SMA) and the exponential moving average (EMA), and therefore, will be the central focus of...
Introduction to Trading the Flag Pattern
In this final tutorial in the series of trading the flag patterns, we take a closer look into the main elements that comprise the flag pattern and also how traders can make use of these elements in order to not only enter trades based on the flag pattern formations...
Should You Trade With Forex Price Action Or Indicators?
One of the most common questions that traders would at some point ask themselves is to whether to trade with the aid of indicators or to make use of forex price action charts. A quick look at any of the forums will see that a good section is dedicated...
Ichimoku System: Trading with the Chikou Span Indicator
The Ichimoku trading indicator is well known for its capability of offering a complete trading system. This has been well documented, and trend following traders rely upon the Ichimoku’s indicators. However, various strategies can be developed using the Ichimoku’s different components as well.
One might argue on the merits of...
Tactical Trading Concepts: Liquidity Pools and Stop Orders
Have you ever been stopped out, only to see price reverse from that very same level? Don’t worry: you’re not alone, and here’s why. Many traders tend to place their stops in the same types of places, without sufficiently weighting the fact that they are incredibly easy and worthwhile...
Breakout Trading: Methods & Tactics To Improve Your Chances of Success
What is Breakout Trading?
Breakout trading is simply where we look to capture an expansion in price as it moves beyond either a defined high point or a defined low point. This is the basis of breakout trading and as you will see, is extremely simple. So typically, traders will...
Three Price Chart Types That You Should Start Using
A price chart is probably the most important piece to the puzzle when it comes to trading the financial markets. While fundamentals drive the price of the instrument, without a price chart to look at, it would be a herculean task to trade the financial markets.
Ask any trader about...
What are Range Bars? Trading Strategies Using the Range Bar
Range bars belong to a type of chart that is independent of time. Unlike the more conventional chart types such as the candlestick and bar charts, with Range bars, only the horizontal price level is plotted. Time is redundant.
Range bars were designed by a Brazilian trader, Vincent Nicolellis in...
How to Quickly Identify Trading Opportunities
There is a common misapprehension that trading needs to be a full-time occupation, but that's not necessarily the case. True you need to be paying attention to what's going on around you, but that does not mean you have to be glued to a screen 24/7.
In fact, if most...
Risk Management in Forex Trading: Tips & Tricks
Clearly, any trading operation on the financial market is somehow connected with risk. Risk management becomes more and more popular not only among traders, but also companies and individuals whose job is related to management and business administration. It is extremely hard to keep business afloat without professional risk...
Risk/Reward Ratio
Frustrated with losses?
Continuously looking to alter your method?
If so, the following article may help.
What is risk/reward?
Risk is the amount of capital that one could potentially lose.
Reward is the profit that one could potentially gain.
Risk/reward is expressed as a ratio, and refers to the amount of profit we...
Forex Day Trading Strategies
What is Forex Day Trading?
Forex day trading is trading in and out of a position, or positions within a single business day, a market session, or any period within those timeframes. Traders use this approach for a variety of reasons. For example, it may suit them to trade early...
Approaching Money Management
The majority of traders seem obsessed with carving out a flawless trading method, often mistakenly overlooking the significance of money management.Whilst it is strongly agreed that a well-rounded trading strategy is vital to success, money management can also be your silent ally. Working quietly behind the scenes, the applied...
How to Cut Losses and Ride Winners
Have you ever pulled the plug on a trade, only to see it cover 200+ pips in the next few hours? I have, and it's not a nice feeling. Vice versa: have you ever held onto a losing trade, thinking that the market had to turn around sooner or later? Again, I've done that. I've widened my stop loss, exposing more of my capital to the market. These are direct violations of the one rule that we simply cannot ignore: cut losses quickly and let winners ride as long as (logically) possible.