Forex Trading Stuff for Everybody

2010-02-10T08:09:00.000-08:00

The arc bobs against a god.

Summary of Multiple Time Frames

2009-05-01T07:18:00.000-07:00

You have to decide what the correct time frame is for YOU.

Once you've found your preferred time frame, go up to the next higher time frame. There you make a strategic decision to go long or short based on the direction of the trend. You would then return to your preferred time frame to make tactical decisions about where to enter and exit (place stop and profit target).

Adding the dimension of time to your analysis gives you an edge over the other tunnel vision traders who only trade off on only one time frame.

Make it a habit to look at multiple time frames when trading.

Choose a set of time frames that you are going to watch, and only concentrate on those time frames. Pick three time frames: 1hr, 4hr, daily; 5 min, 15min, 1hr, and so on. And only use those time frames. Learn all you can about how the market works during those time frames.
Don't look at too many time frames, you’ll be overloaded with too much information and your brain will explode.

Stick to two or three time frames, any more than that is overkill.

We can't repeat this enough: Get a bird's eye view. Using multiple time frames resolves contradictions between indicators and time frames. Always begin your market analysis by stepping back from the markets and looking at the big picture.

Use a long-term chart to find the trend, and then return closer to the market to make decisions about entries and exits.

Babypips

Long or Short?

2009-05-01T07:16:00.000-07:00

If you ever look at a currency pair on different time frames , you probably noticed that markets can move in different directions at the same time. A moving average may rise on a weekly chart, giving a buy signal, but fall on a daily chart, giving a sell signal. It may rally on an hourly chart, telling us to go long, but sink on a 10 minute chart, telling us to short. What the hell is going on?

Let’s play a quick game called “Long or Short”. The rules of the game are easy. You look at a chart and you decide whether to go long or short. Easy. Okay ready?

5 Minute Chart

Let’s a take a look at a EUR/USD 5-minute chart on 11/03/05 around 4 am EST. Oooh it’s so nice. It’s trading above its 100 simple moving average which is bullish and look! It just broke out and closed above it’s previous resistance! Perfect time to go long right? I’ll take that as a yes.

Oh! You are WRONG! Look what happens next! It’s goes up a little bit but then drops like rock. Oh too bad.

60 Minute Chart

Let’s look at the same exact chart on a higher time frame. It’s the same date, 11/03/05 and the same time, around 4 am EST.

Holy cow! The pair broke out of its down channel which is bullish. It’s trading above its 100 simple moving average which is bullish. The last candle broke and closed above its previous resistance which is bullish. Looks like a bull, smells like a bull. Nothing but up from here right? You say long.

OOOHHHHH! Zero for two! How do you like your steak cooked? Because from the looks of this chart…the bull got slaughtered. The pair even dropped back into its old down channel. Look at that last candle, it was dropping so much, it couldn’t even stay inside my chart! Amazing!

4 Hour Chart

Okay, we’ve now moved up to an even higher time frame chart. A 4-hour chart. It’s still the same date and time, just a higher time frame. If you had looked at this chart first, would you still have been quick to go long on either the 5-minute or 1-hour chart?

It’s currently trading in a down channel which is bearish. The pair is hitting the upper trend line of the down channel which is extremely bearish. Yes, it’s still trading above the 100 simple moving average which would count as bullish, but that channel would still make me cautious. Especially since it’s trading around the upper trend line.

Look what happens! Droppin’ like its hot! The pair stayed true to its channel. It hit the upper trend line and traveled down.

Daily Chart

For fun’s sake, let’s go up one more time frame to the daily chart.

Wow, will you look at that? The pair is trading in an obvious down trend. It’s below its 100 simple moving average and its in a down channel. On this chart, the trend direction is so obvious! Do you also notice the last candle? It tested the upper trend line and reversed. Not a very good bullish sign. Let’s look at what happens next.

Hallelujah! The downtrend continues!

So what's the point?

All of the charts were showing the same date and time. They were just different time frames. Do you see now the importance of looking at multiple time frames?

We used to just trade off 15-minute charts and that was it. We could never understand why when everything looked good the market would suddenly stall or reverse. It never crossed our minds to take a look at a larger time frame to see what was happening. When the market did stall or reverse on my 15-minute chart, it was often because it had hit support or resistance on a larger time frame.

It took me a couple of hundred bucks to learn that the larger the time frame, the more important support and resistance levels were. Trading using multiple time frames has probably made us more money than any other one thing alone. It will allow you to stay in a trade longer because you’re able to identify where you are relative to the big picture.

Most beginners look at only one time frame. They grab a single time frame, apply their indicators and ignore other time frames. The problem is that a new trend, coming from another time frame, often hurts traders who don’t look at the big picture.

Take a broad look at what’s happening. Don’t try to get your face closer to the market, but push yourself further away.

Select your preferred time frame and then go up to the next higher time frame. There you make a strategic decision to go long or short based on the direction of the trend. You would then return to your preferred time frame to make tactical decisions about where to enter and exit (place stop and profit target). Adding the dimension of time to your analysis gives you an edge over the other tunnel vision traders who trade off on only one time frame.

There is obviously a limit to how many time frames you can study. You don’t want a screen full of charts telling you different things. Use at least two, but not more than three time frames because adding more will just confuse the geewillikers out of you and you’ll suffer from analysis paralysis and go crazy.

We like to use three time frames. The largest time frame we consider our main trend, the next time frame down as my medium trend and the smallest time frame as the short-term trend.

You can use any time frame you like as long as there is enough time difference between them to see a difference in their movement. You might use:

1 minute, 5 minute, and 30 minute
5 minute, 30 minute, and 4 hour
15 minute, 1 hour, and 4 hour
1 hour, 4 hour, and daily
4 hour, daily, and weekly and so on.

When you’re trying to decide how much time in between charts, just make sure there is enough difference for the smaller time frame to move back and forth without every move reflecting in the larger time frame. If the time frames are too close, you won’t be able to tell the difference which would be pretty useless.

Babypips

Time Frame Breakdowns

2009-05-01T07:10:00.000-07:00

It depends on your personality!
Let me give you a breakdown of the three to help you choose:

time frame	Description	Advantages	Disadvantages
Long-term	Long-term traders will usually refer to daily and weekly charts. The weekly charts will establish the longer term perspective and assist in placing entries in the shorter term daily. Trades usually from a few weeks to many months, sometimes years.	Don’t have to watch markets intraday Fewer transactions means less paying of spreads	Large swings which require large stops Usually 1 or 2 good trades a year so patience is required Bigger account needed to ride longer term swings Frequent losing months
Short-term	Short-term traders use hourly time frames and hold trades for several hours to a week.	More opportunities for trades Less chance of losing months Less reliance on one or two trades a year to make money	Transaction costs will be higher (more spreads to pay) Overnight risk becomes a factor
Intraday	Intraday traders use minute charts such as 1-minute or 5-minute. Trades are held intraday and exited by market close.	Lots of trading opportunities Less chance of losing months No overnight risk	Transaction costs will be much higher (more spreads to pay) Mentally more difficult due to frequency of trading Profits are limited by needing to exit at the end of the day.

You have to decide what the correct time frame is for YOU.

You also have to consider the amount of capital you have to trade. Shorter time frames allows you to make better use of margin and have tighter stop losses. Larger time frames require a bigger account so you can handle the market swings without facing a margin call.

When you finally decide on your preferred time frame is when the fun begins. This is when you start looking at multiple time frames to help you analyze the market.

Babypips

Which time frame Should You Trade?

2009-05-01T07:07:00.000-07:00

One of the main reasons traders don’t do well as they should is because they’re usually trading the wrong time frame for their personality. New traders will want to learn how to get rich quick so they’ll start trading small time frames like the 1-minute or 5-minute charts. Then they end up getting frustrated when they trade because it’s the wrong time frame for their personality.

Finally after a long period of time frame unfaithfulness, we felt we were most comfortable trading the 1-hour charts. This time frame is longer, but not too long, and trade signals were fewer, but not too few. We now have more time to analyze the market and didn’t feel rushed anymore.

On the other hand, we have a friend who could never, ever, trade in a 1-hour time frame. It would be way too slow for him and he’d probably think he was going to rot and die before he could get in a trade. He prefers trading a 10-minute chart. It still gives him enough time (but not too much) to make decisions based on his trading plan.

Another buddy of ours can’t figure out how we can trade a 1-hour chart because he thinks it’s too fast! He trades only daily, weekly, and monthly charts. His name is Warren Buffet. You might know him.

Okay, so you’re probably asking what the right time frame is for you. Well, buddy, if you had been paying attention, it depends on your personality. You have to feel comfortable with the time frame you’re trading in.

You’ll always feel some kind of pressure or sense of frustration when you’re in a trade because real money is involved. But you shouldn’t feel that the reason for the pressure is because things are happening so fast that you find it difficult to make decisions or so slowly that you get frustrated.

When we first started trading, we couldn’t stick to a time frame. We started with the 15-minute chart. Then the 5-minute chart. Then we tried the 1-hour chart, the daily chart, and 4-hour chart.

Trading time frames are usually categorized into three types:

Long-term
Short-term or swing
Intraday or day-trading

Which one is better? It depends on....

Babypips

Demo Contest On MF

2008-10-17T00:40:00.001-07:00

If u like to participating on demo contest you may click masterforex link provide in this site.
Winner will be awarded every weeks

Good luck

TODAY'S TRADE ON 18-08-2008

2008-08-17T16:27:00.001-07:00

TODAY'S TRADE ON 18-08-2008

GBP/USD

BUY @1.8002 SL30 PIPS TP 30 PIPS

SELL @1.8552 SL30 PIPS TP 30 PIPS

GBP/JPY

BUY @206.32 SL40 PIPS TP 40 PIPS

SELL @203.06 SL40 PIPS TP 40 PIPS

USD/JPY

BUY @110.96 SL30 PIPS TP 30 PIPS

SELL @110.14 SL30 PIPS TP 30 PIPS

200 EMA Indicator for Intra-day trading

2008-08-05T07:30:00.003-07:00

Are you a relatively new trader looking for a solid forex strategy?
A challenge facing many new traders when developing their forex strategy is the ability to identify the overall trend for intra-day trading.
The 200 EMA (Exponential Moving Average) can solve the problem.
The 200 EMA is one of the most popular indicators of all time with Forex traders the world over, and for that reason alone is worth noting due to the psychological effect on the market place price can have when hovering around the 200 EMA.
To use this very powerful Forex strategy, create charts on 3 time frames:
• 4 hour
• 1 hour
• 15 minute
Now plot a 200 EMA indicator on each chart and, as a suggestion, color it red, for easy visual impact.
Preferably tile the 3 windows containing your 3 charts into a vertical fashion so you can see the 3 time frames next to each other. It will squeeze up the information on the charts somewhat but for the purpose of this strategy that doesn't matter.
Now scroll through the various currency pairs you like to trade. If you prefer to trade only pairs with a smaller pip spread, they amount to about 9. They are:
• EUR/USD
• GBP/USD
• USD/CHF
• USD/JPY
• EUR/JPY
• USD/CAD
• AUD/USD
• NZD/USD
• EUR/CHF
Watch For This Setup
What you are looking for is any currency pair that bucks the 200 EMA on the 15 minute chart.
So for example, look at the EUR/USD pair and note the position of price relative to the 200 EMA on the 3 time frames.
If price is well above the 200 EMA on the 4 hour chart, well above the 200 EMA on the 1 hour chart, but BELOW the 200 EMA on the 15 minute chart, price is bucking the trend.
The overall trend is up, price has temporarily gone against the trend and is currently in a retracement.
Using the fundamental trading principle of buy the dips in an uptrend, sell the rallies in a downtrend, look for a suitable entry point.
In the example given above you would look for an opportunity to buy the EUR/USD, perhaps watching for a candle signal that price has exhausted it's downward momentum, bucking the 15 minute chart 200 EMA and will soon resume it's upward momentum.
An Easy Daily Exercise
This is an easy exercise and it can be done once or twice a day, taking just a few minutes.
Once you see price bucking the 200 EMA on the 15 minute chart, whereas it is on the opposite side on the 4 hour and 1 hour charts, sit up and take note. Watch carefully and grab the opportunity to get in and make some pips.
After a little practice you will see how extremely powerful this simple Forex strategy is - certainly deserving a place in your trading tool kit.

BB-Width Indicator and Breakouts

2008-08-05T07:30:00.001-07:00

The following 1-Hour chart shows the CADJPY in the midst of a long term trend to the upside. Below this chart the BB-Width indicator is plotted, which reflects the market's current state of volatility. As the Bollinger Bands expand, the BB-Width indicator line begins to trend to the upside, as quiet (non-volatile) markets that force the Bollinger Bands to contract, would also send this indicator line back to the downside.

As we know that market breakouts typically occur when market volatility increases, as we can see in the past, during periods of market volatility, the CADJPY continued to trend to the upside. However recently as the volatility once again increased, the market this time broke down below its up trending support line, and continued to the downside.

When the market provides us with two independent trading signals, our chances of success increase in our favor; which recently can be see as the CADJPY appears to have begun a new trend to the downside.
Best of luck in all your trades!!!

moving average tunnels

2008-08-05T07:29:00.003-07:00

- 1H (of 30MIN, but you will get more whipsaws) candlesticks/bar charts
- 18 EMA & 28 EMA (put them in red)
- 5 WMA (in blue) & 12 WMA (in yellow)
- RSI = 21

The 18 EMA & 28 EMA are two red lines who form a tunnel, these will help you to determine
the start of a rend and the end of a trend.
Long term

The 5 WMA & 12 WMA will show you when to enter a trend, they will also
help you to see the strength of the trends. Short term

Entry Signals
You should only open a position, when the red tunnel is extremely narrow or crossed !

LONG: 5 WMA & 12 WMA cross the red tunnel upwards.
If the 5 WMA also crosses the 12 WMA upwards, then the signal is extra strong.
RSI >50

SHORT: 5 WMA & 12 WMA cross the red tunnel downwards.
If the 5 WMA also crosses the 12 WMA downwards, then the signal is extra strong.
RSI<50

Exit Signals

Signals that show the end of the chosen trend
- Long: The price has reached a top and 5 WMA dives under 12 WMA
Close position

- Short: The price has reached a bottom and 5 WMA jumps above 12 WMA
Close position

Always close your position when boundaries of the red tunnel cross eachother
or when they become so narrow that they are one! This is a clear sign of a trend reversal.
After you see this, close your position and open a new position in the other way
(If you were long, close, open a short position)

When in a trade and the 5 WMA & 12 WMA cross the red tunnel ->
Pay attention! As long as the red tunnel boundaries doesn't cross
eachother there is no problem, but often this is a sign that they will!"

5 x 5 Simple system

2008-08-05T07:29:00.001-07:00

Just look what this trading strategy has to say. It's a simple yet quite promising Forex trading method. Trading strategies like this can only be discovered through a long and determined observation of the price behavior.

To start:
Currency: ANY
Time frame: 1 day
Indicators: 5 SMA, RSI 5

Entry rules: Buy when the price crosses over 5 SMA and makes + 10 pips up, the RSI must be over 50. Sell when the price crosses below the 5 SMA and makes +10 pips down, the RSI must be less than 50.
Exit rules: not set.

It is a very very simple system, yet with quite impressive results.
Always remember to take actions/enter the trade only after the signaling candle is closed.

This Strategy or trading idea can be used to create more advanced trading version.

Simple Breakouts system

2008-08-05T07:25:00.003-07:00

The idea behind this simple Forex trading system is to capture an early move of the price when it starts to establish its new direction/trend for the day.

As we know the Frankfurt market opens at 2:00 am EST (which is 7:00 am GMT), then an hour later the other giant - London market opens at 3:00 am EST (which is 8:00 am GMT). The European session is the first major session for each coming day.

So, what do we do?
We start with 1 hour time frame, preferred pair - GBP/USD and no indicators.
The price range we are going to focus on is from 1:00 am EST to 2:00 am EST.
We look for the highest high and the lowest low of the price in that range and simply draw parallel horizontal lines through those extremes that will create a tunnel.

Now we are ready to move to a smaller time frame - 5 minute chart - and watch for the whole 5 min candle to close outside the tunnel which will provide a signal for us to enter with the open of the next candle.

We use a 20 pip stop OR the other side of the tunnel - whichever is less.

We are aiming at at least 20 pips profit. After that we have several options: lock the profit in, start "chasing" the price with a trailing stop by placing the stop just below the lowest low of the previous 5 min candle, or simply exit within the three consecutive hourly candles from the moment the trading order was filled.

TrendTriggerMod

2008-08-05T07:25:00.001-07:00

Mine is on 1 hour chart:
Two EMA of settings 5 and 15 - close
Two EMA of settings 144 and 169 - close- vegas 1 hour tunnel

asctrend2 for determining stop
MACD settings 12,26,9
RSI settings 21
Trend trigger mod

Entry long:
EMA 5 and 15 crossover upward
crossover of MACD lines upward
RSI(21) > 50
and TrendTriggerMod upward

Short entry:
EMA 5 and 15 crossover downward
crossover of MACD lines downward
RSI(21) < 50
and TrendTriggerMod downward

Hint1: do not make the trade if trendtriggermod do not agree the others
Hint2: beware of the 2 EMA's 144 and 169 They work well as Support and
Resistance

Exit: Use new crossover of MACD lines

Stop loss depends on asctrend2 or use ATR(14)*2"

Breaking News!!!

2008-07-31T23:11:00.001-07:00

We will have two opportunities for trades tomorrow as we will
have the US Non-Farm Payrolls and US ISM Manufacturing
reports. The first opportunity will be when the US Non-Farm
Payrolls report is released at 8:30 am EDT. We will focus on
the Non-Farm Payrolls figure, which is expected to be -75k
jobs. We have changed our focus on this one to the USD/JPY as
it has moved better than the GBP/USD in recent months. A
higher than expected number will be good for the USD and signal
a long on the USD/JPY, and a lower than expected number will be
bad for the USD and signal a short on the USD/JPY. We will be
looking for a deviation of 50k on this report to trigger a safe
trade.

This report last met our safe trigger in May, and we had
traders report profits of up to 75 pips on the USD/JPY.

NFP Tonight

2008-07-31T16:04:00.001-07:00

Today (Friday. Aug 1, 2008. Time GMT+7) we have a Non Farm Payroll news,
beware of this news, because this is a super news that can shake the market
and very high impact effect.
So becarefull with your trade
Good luck to you all

CHAOS THEORY BY BILL WILLIAM (Introduction)

2008-07-30T04:55:00.001-07:00

CHAOS THEORY
BY BILL WILLIAM
Overview
Bill William mengembangkan konsep trading yang unik dengan menggabungkan psikologi trading dengan Theory Chaos dan efek istimewa yang terjadi di dalam market. Dia berpendapat bahwa keuntungan dari trading dan investing ditentukan oleh psikologi manusia dan bahwa setiap orang bisa menjadi seorang trader/investor yang profitable jika mereka memahami apa yang terjadi pada market yang bergerak acak. Bill William mengatakan fundamental atau teknikal analysis tidak bisa menjamin hasil profit yang konsisten karena mereka tidak melihat keadaan yang sebenarnya dari market. Lebih lanjut, Bill William mengatakan bahwa trader kebanyakan rugi karena mereka mengandalkan tipe analisis yang berbeda-beda, di mana menjadi tidak berguna pada model dinamis nonlinear, yaitu pada market sesungguhnya.
Trading adalah permainan psikologi, cara untuk merealisasikan diri dan pengetahuannya, jadi cara terbaik untuk menjadi sukses yaitu mencari gaya trading anda sendiri, mengenal trading anda dengan baik dan menjalankannya apapun yang terjadi. Untuk itu, ada 2 aspek yang signifikan:
pengetahuan tentang diri sendiri dan memahami struktur market itu sendiri.
Berikut ini adalah pandangan Bill William tentang mudahnya menghasilkan uang jika anda memahami struktur dari market/pasar. Untuk melakukan hal tersebut anda harus mengetahui bagian yang tak terpisahkan dari market yang dinamakan dimensi.
Dimensi pasar tersebut adalah:
? Fractal (phase space)
? Momentum (phase energy) - Awesome Oscillator
? Acceleration / Deceleration (phase force)
? Zone (phase energy / force combination)
? Balance Line (strange attractors)
Perlu diketahui dan yang terpenting adalah sebelum dimensi pertama (Fractal) muncul, semua
sinyal yang dibentuk oleh setiap dimensi harus di abaikan. Ketika posisi sudah terbuka pada arah
yang sama yang dibentuk oleh sinyal fractal, trader boleh menambah posisi di setiap sinyal yang diberikan oleh dimensi lainnya. Hasilnya, 30% dari pergerakan harga dapat memberikan kesempatan untuk meraih profit 90-120%
Metode exit the market dari Bill William sangat sensitive terhadap pergerakan harga, jadi metode tersebut dapat membantu untuk mendapatkan profit sampai dengan 10% terakhir dari trend, dapat menangkap tidak kurang dari 80% pergerakan trend. Teori Bill William ini menjadi popular dikalangan trader forex.

5min Bollinger breakout system

2008-07-26T22:37:00.001-07:00

Trade EUR/USD 5 minute chart.
Indicators used: Upper Bollinger Band (period 14, 2 standard deviations, low price), Lower Bollinger Band (period 14, 2 standard deviations, high price), DeMarker (period 14), ADX (period 14, typical price), ATR (4 hour chart, period 100), EMA (period 14, typical price)

Open long when price is within 5 pips of upper band, demarker is greater than .7 or less than .3, and ADX is at least 40.
Open short when price is within 5 pips of lower band, demarker is greater than .7 or less than .3, and ADX is at least 40.
20 pip take profit, stop loss is large at 10 * ATR.

Also:
Close long when we are profitable and the price drops below the EMA.
Close short when we are profitable and the price goes above the EMA.

5Min Intraday System

2008-07-26T22:36:00.001-07:00

5Min intraday strategy with great success on the EurUsd and Gpb/Usd. Three deals max. per day. Open position when the angle of the 50 Simple moving average are greater than 20Degrees and the price retrace back into the zone of the 21 Exponential moving average and the 10 Exponential moving average. Set stoploss at 6 pips plus spread and profit taking at 8-10 pips. Move stoploss to breakeven as soon as 6 pips gain is obtained. Using this strategy is at your own risk. Hope someone will benefit from it.

Introduction

2008-07-26T10:11:00.001-07:00

Hi all,
I present this blog to all forex trader who likes to make improvement on his or her skill. I will add a free stuff soon, like ebook, tips on trading, and some information about what happend out there.
May god bless all of us

Forex Trading Stuff for Everybody

Summary of Multiple Time Frames

Long or Short?

5 Minute Chart

60 Minute Chart

4 Hour Chart

Daily Chart

Time Frame Breakdowns

time frame

Description

Advantages

Disadvantages

Long-term

Short-term

Intraday

Which time frame Should You Trade?

Demo Contest On MF

TODAY'S TRADE ON 18-08-2008

200 EMA Indicator for Intra-day trading

BB-Width Indicator and Breakouts

moving average tunnels

5 x 5 Simple system

Simple Breakouts system

TrendTriggerMod

Breaking News!!!

NFP Tonight

CHAOS THEORY BY BILL WILLIAM (Introduction)

5min Bollinger breakout system

5Min Intraday System

Introduction