MACD – Page 2 – Trading POC

Currency Swing Trading – An Forex Trading Strategy Perfect For Novice Traders And Triple Digit Gains

Posted on November 26, 2018 by blogger

Currency trading is ideal for novice traders because it’s simple to understand, exciting and can make huge rewards. You can learn and put together a currency swing trading strategy quickly and easily and we will show you how in this article.

Swing trading requires far less discipline than long term trend following and profits and losses are taken quickly; because most traders lack discipline this is an ideal method for beginners and also the odds are better than day trading or scalping, because within a day all volatility is random. Let’s look at the logic of swing trading in more detail.

Currency markets move in the long term to the supply and demand situation but humans are emotional and the emotions of greed and fear, push prices to far up or down and then the market returns to more realistic values. The swing trader will aim to sell into these overbought and oversold areas and take profit when the market has corrected but how do you swing trade?

The first point is to keep your strategy simple, you only need to look for short term price spikes, look at some momentum oscillators to see if prices are overbought (or oversold) and look for support or resistance to hold then, wait for momentum to turn up or down into the level and enter your trade.
You should always set a target and take profits quickly – this style of trading is “hit and run” and it’s aim is to bank profits quickly.

What momentum oscillators should you use?

There are plenty to choose from but popular ones are the RSI, Stochastic and MACD.

A Simple Swing Trading Strategy for Big FX Profits

To show you how simple swing trading can be, below find a simple strategy which I use which works and we will look at it in relation to a currency which is overbought and it only uses one indicator – the stochastic:

– Draw a line on a daily chart across the highs of the stochastic.

– Wait for the stochastic to approach this resistance and normally it will normallybe overbought in the 90 area

– Pick a level of resistance above the price and place your stop behind it.

– Watch for stochastic momentum to wane and sell the currency.

– Place a time stop of 1 or 2 days for the stochastic to follow through to the downside with bearish divergence – if it doesn’t liquidate the trade, if it does look for your target.

– Look to take your profit before support – don’t wait for a test of the level in case there is a recoil – get out early when the risk reward is in your favour.

You can do this in the major currencies but also use cross rates which can offer some fantastic swing trading opportunities.

The above is a very simple system and it works well. Of course, there are many swing trading strategies you can use and if you do some research, you will find the right one for you. Keep in mind that simple strategies work best, so use a maximum of 3 indicators and keep your system simple and robust.

The Best Tactics For Short Term Forex Trading

Posted on October 21, 2018 by blogger

In terms of being the best tactician in short-term forex trading, we recommend momentum trading and for good reasons, too. Its main aim is to achieve the profit target as soon as possible with as little risk possible under the volatile circumstances that surround each forex transaction. Basically, you take advantage of the momentum when it is on your side by entering the forex market either on a long or short basis.

You will require three kinds of moving averages to accomplish your purpose, namely, the moving average convergence divergence (MACD), the 100-day simple moving average (SMA), and the 20-day exponential moving average (EMA). You will see why later.

For the MACD, be sure to use the default setting on the 5-minute chart. Said default setting is: Signal ENA=9, First EMA=12, and Second EMA=26. To start on this short-term forex trading strategy, open the 5-minute chart and look for the right currency pair. This means the pair trading below the SMA and EMA. Take a look at the MACD histogram. You will enter into a long trade when the MACD starts turning positive but stay within 5 candles. Your stop loss margin must be positioned at the candles low point, which should be above the EMA and SMA.

You will exit half of your position the moment the trade changes in your favour but be sure that it is still within the amount risked. The other half of your position will follow a trailing stop within a -15 pips on the 20-day EMA. This forex trading tactic should pay off handsomely under the right circumstances.

Now, lets assume that that your chosen currency pair is trading in the opposite direction above the EMA and SMA that is. In this case, you must be patient and wait until such time that the currency pair is trading below both the EMA and SMA by 15 pips, minimum.

In reverse of the first situation, you will enter into a short trade with the MACD turning negative within 5 candles. (The first situation was go long on positive turn). Your stop loss is at the high point of the first candle breaking through the EMA and SMA. (In the first, it was at a low point). You will also exit half of your position with the other half set for a trailing stop at +15 pips on the EMA. Again, this forex trading strategy should be in your favour when you can closely monitor the charts.

There are other strategies for short-term forex transactions, of course. Two examples are the use of 2 charts, namely, the hourly and the 10-minute charts as well as the 200-bar MA. You can also explore these options but we recommend trying the momentum trading strategy first.

Trading Tips No 1 Learn How to Trade The Moment of Truth

Posted on October 19, 2018 by blogger

So you have learned how to trade the markets by mastering a few trading tools like Moving Averages, Channels, Stochastics, MACD, or RSI – that is a great accomplishment achieved by only a few.

However, having the tools and rules to trade markets successfully, year in and year out, is only half of the challenge. The other half is far more daunting and achieved by even fewer investors – I am talking about good old-fashioned discipline. That is, discipline to follow your indicators and rules without fail – every trade entry and every trade exit. This is why it is critical that you learn how to trade. This is the ‘moment of truth’ in the life of every trader or investor.

Here is a test. Are you able to consistently pull the trigger on your sell signal when all the ‘experts’ are screaming, ‘buy’? Do you ever give your stop loss a little more room because you can’t stand to lose, not even one trade, only to have the market gap open the next day against you? Are you always available during the trading day to follow your trades? Do you let your emotions cloud your thinking and cause you to violate your own trading rules in the ‘heat of battle’? If you answered yes to any or all of these questions, you are absolutely normal and that’s the reason why it’s so difficult to trade successfully even with a good methodology. If you fail to learn how to trade , you are your own worst enemy, when it comes to disciplined trading or investing.

Is there a remedy for this problem? Yes! The solution, when you are learning how to trade , is to find a good mechanical trading system that provides superior returns consistently over time and a broker to trade it, verbatim, on your behalf. You will have instantly solved the discipline problem and dramatically increase your potential for success.

Understanding the Moving Average in Forex Trading

Posted on August 16, 2018 by blogger

The moving average has been a staple of the Forex trader’s arsenal since it was first described in statistics textbooks in the early twentieth century. The visual representation of several averaged price points, the moving average provides a smooth line that makes it easy to see at a glance whether the price is trending upwards or downwards. So critical is the moving average to Forex trading that its calculation is at the heart of several indicators, including the Bollinger Bands and the MACD.

Moving averages are useful because they lag the price. That is, a moving average will always appear either above or below it. If it is above the price, this indicates that the price has been falling. If it is below, it has been rising.

Forex traders use the moving average in many ways, the most basic of which is a simple trading system. When the price moves upward through the moving average, they buy, and when the price moves downward through it, they sell. This system has drawbacks, however, in that the price will often move through the moving average only to immediately reverse. This false signal is known as a -whipsaw.- To get around this problem, Forex traders devised another use for the moving average: the filter.

To create a filter, they apply a second moving average to the chart of a much higher periodicity. For instance, if the moving average that the trader is using as a signal is 14 periods, they might apply a second moving average of 100 periods. This second indicator lags the price much more than the first, and it gives the trader an instant insight into whether or not the price is in an uptrend, downtrend, or range. If the price is in an uptrend, then, the trader will not accept any sell signals from the 14 period moving average.

Forex traders can create a more complex moving average system with a built-in filter by applying three moving averages with periods such as 14, 28 and 56, where each proceeding instance of the indicator is twice as much as the last. In this way, the price can fall through or rise above the first, then the second and finally the third moving average. At that point, the trader can be fairly confident that a change in trend is occurring and can trade in the new direction.

Another way that traders use the moving average is to plot two of them, one slower than the other. For instance, one may be set to 12 periods while the other is set to 26. The result is that a signal is generated when the slower moving average falls through the longer. This is the basis of the MACD, or Moving Average Convergence Divergence indicator, which chart technicians use to determine trend strength, momentum and direction.

The moving average, humble as it is, is often the first learned but is generally quickly discarded when when more complex indicators are encountered. This tendency may be to the trader’s detriment as many more complex indicators are simply using moving averages in their calculations and displaying the results in various ways. These more complex data presentations, while potentially useful, can also make it more difficult to analyze the market efficiently.

To learn more please visit www.clmforex.com

Disclaimer: Trading of foreign exchange contracts, contracts for difference, derivatives and other investment products which are leveraged, can carry a high level of risk. These products may not be suitable for all investors. It is possible to lose more than your initial investment. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. A Product Disclosure Statement (PDS) is available from the company website. Please read and consider the PDS before making any decision to trade Core Liquidity Markets’ products. The risks must be understood prior to trading. Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian company which is registered with ASIC, ACN 164 994 049. Core Liquidity Markets is an authorized representative of Direct FX Trading Pty Ltd (AFSL) Number 305539, which is the authorizing Licensee and Principal.

What Is The Best Swing Trading Indicator For You

Posted on April 4, 2018 by blogger

Finding the right swing trading indicator can sometime be very difficult. Technical trading with indicators is possible and many traders around the world are able to make profits day in and day out thanks to the insight that trading indicators offer to those with the skills to use them. If you are just starting out, then the problem is that there are many indicators available. This makes it extremely difficult when deciding on what indicator you should use. This is where new traders need a little help in understanding that all indicators work. The secret to finding the best trading indicator lies not in finding the right indicator, but instead in finding the right indicator for you and your trading style.

Some of the most popular trading indicators include RSI, MACD, Stochastics and many, many more. All of these indicators and others can be used for trading. They will work on any market and any time frame, even if you don’t swing trade. Instead of searching for the best indicator, ask yourself what trading style you prefer and what you want or need from your indicator. Indicators often display different aspects of markets. Some are leading and warn of potential areas where the market may be overbought or oversold. Some indicators are moving average based and instead they plot the average of price on the chart. If you know what you need from an indicator then you can find and start experimenting with indicators of that kind. This will make finding the right indicator for your trading style much easier and faster.

When you are testing and playing with trading indicators, always keep in mind that no indicator is perfect. When used properly, an indicator can give you a trading advantage. Some new traders make the assumption that the more indicators you place on your chart, the better a trader you will be. This couldn’t be any further from the truth. It is recommended that you use at most 3 indicators at one time. If you start using anymore than this, you may find that your charts become cluttered and that trading decisions will become more difficult. It is common that one indicator conflicts with the signal of another that you are using at the same time. In this situation which trading indicator do you follow? Keep it simple. Never use more than 3 indicators at a time.

There are plenty of trading and swing trading indicators available. Finding the right or the best trading indicator might not be easy, but you can simplify the process by first deciding which type or what kind of information do you want your technical indicator to tell you. Do you want to know when the market may be exhausted and readying to pullback? Do you instead prefer to use moving averages of price? Once you know what you want, it will be easy to test and play with indicators of that kind until you find the one that suits your style. Furthermore, always remember that more is not always better. Keep your trading indicators on your chart to a minimum. Using anymore than 3 may actually make trading more difficult, and this is something no trader should want.