Do You Have a Trading Edge?
EURUSD PRICE ACTION
The Art of Forex Trading can be pretty tricky. The market can can change direction or trick you into believing the direction has changed. Your Trading Edge should include the use of different technicals and fundamentals. The development of your Edge should include:
- Market Filters: You will want to see the big picture
- Market Dynamics: Pattern and Price Movement Knowledge
- Time Frame : The Proper Use of Time Frames Necessary to Trade
- Zone Wave Trading: Setting Up the Importance’s of Measured Moves
- Tools: Fibonacci, Bands Waves and Moving Averages Telling the Picture
- Trade Setups: Know the Market Fundamentals with Specific market Setups to Identify Buy & Sell Zone and Targets
Your trading edge will guide your decision to consistent trading profits. The in and out of trading with more wins than losses will lend your edge to a profitable system. You trading edge is something that you as a trader will develop over time and understanding of market condition with a trading system and process that makes sense to you.
Your Trading Edge is the most important aspect of consistent trading. Take the time to develop a trading edge that will guide your decision making activities. You can start to develop a edge by understanding price action , use of filters, market setups and disciplined trading activities.
Forex Trading Basics Explained
Forex trading is an extremely lucrative investment to get into. It is the exchange of foreign currencies world wide sold for a profit depending on what the market does. The market is the people, banking institutions, and international corporations that make up the more then 1.5 to 3 trillion dollars of activity that takes place everyday. But there are still some people who are confused as to exactly what forex trading is and how it works. So in this short article I am going to explain it really simply so that you get the basic concept down.
With forex trading you are trying to buy currencies at an exchange rate for another currency, this is called a currency pair. For example you might exchange the US dollar for the Japanese yen or you may exchange the Canadian dollar for the Mexican peso. You are going to use the American dollar as the unit to determine what the value of the other currencies are, because the less the American dollar is worth the less of any international currency it will buy you. This rule applies to every other currency as well. If the currency would get you less in US dollars then the currency isn’t worth much.
What you are trying to do with forex trading is make what it known as a pip. This is a fluctuation in the right direction for your investment. Decimal format is used to calculate the exact exchange rate for currency internationally. For instance a US dollar might get you 1.5617 euros. You make a profit when the number moves up a point. The more this number moves up the more pips you make. A pip can be a unit of twenty dollars, ten dollars, or less depending on what type of account you are playing with and the size of the lot.
Trading the forex is not like the stock market where they are governed by the SEC. Most of the trading is done over the phone or online. A great portion of the money that is exchanges comes from only five percent of the market banks and large corporations. The other 95% comes from small time investors who may have a few thousand dollars in their account to play with.
Of course there is a lot of technical jargon involved like, Fibonacci retracement, which means the level at which a market trend will break, and fundamental analysis which simply means information you are fed over the news. These kinds of terms intimidate most people, but trust me they are easy to learn and there is no reason why you can pick them all up.
The basic point is to buy one currency at an exchange rate that will rise up enough in value to be able to buy more of a currency which is worth less now because of the increased value all centralized around the US dollar. The 0.0001 example I gave above is spot on for most of the major markets, but for the smaller ones sometimes the price might be measured differently.
I hope this article has been helpful in helping you to understand just how forex trading works.
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