What do candlesticks tell us about Forex

We have seen a gradual improvement in the Forex market because it easy is a profitable market. You should think why new people enter the Forex market but then again, why don’t new people succeed in the market? We can also witness a gradual increase in the number of people who are interested in price analysis. This has changed the viewpoint of investment in the community. We can prove this statement by giving examples such as, there are different types of charts to summarize the technical price but among them, the most effective one is the candlestick chart. Because these charts are more informative, bullish and bearish markets can be traded using the candlesticks. The Singaporean traders are skilled in handling the candlesticks because they have they have the experience. Now, let us read.

Before we go into the details you need to know that candlestick trading is often known as price action trading. Price action trading is often considered the most reliable and simple trading system in the world. But this where the most retail traders make mistake. They blindly follow the price action pattern and take a huge risk in each trade. But you need to understand the fact that no system is perfect. You will always have to face some losing trades even though you know all the details about your trading system. So make sure that you are not risking too much of your account capital in live trading the market.

The fundamentals

Fundamentals of candlesticks are very easy to understand but day traders fail to notice the variations of representation in each interval. We can divide the patterns of candlestick into two such as doji and bullish engulfing. So these two patterns are different from each other. Doji symbolizes that pattern has drained and also it cannot be continued further. But instead of it, we can use bullish engulfing as it is the new trend in the Forex market and also has the possibility to reach to the next level in the market. This is an important concept as we are able to use the tools to assess the available tendencies. However, in Forex trading nothing becomes easier unless you try to make it easy. Also when proceeding with the technical analysis we should be very clear on supply and demand because they play a major role in these situations. When the demand increases at the current level the price tends to decrease. So, as naïve traders, you should be very attentive regarding the technical analysis.

Characteristics of trend

When we study about trading we should make sure to know that trends have a uniqueness that is it trend has its own trends. We can observe many similar features in market trends. At last, this will end to the drained point. But we can find a solution for this problem by using the candlestick which will give us the information about the trending moves we take. The traders who have a greater capability of finding these aspects in trading they will have a good point in their mind as to buy things for a low cost and to sell for a higher price. The traders who know these points will experience the quick change in the supply and demand more than the other traders. In this instance, traders can bear the risks and problems in the Forex market.

One of the uses

Also, candlesticks can be used to confirm the situations where the assist is changed to the opposite of it. But it is also common that there are instances where we can experience ups and downs in trading, but the most important note we must know is how to tolerate those ups and down, especially in trading. These types of events can cost us a lot, but candlesticks can become a friend us as it helps us to understand the market.

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Exploring different types of high-quality trading strategy

Trading the Forex market is all about triggering your brain in the right path. When you are in the Forex market you should be capable enough to think all the aspects of trading. You cannot just look into one factor and enter the trade because the market is highly competitive. You would have searched through many articles and books related Forex strategies but make sure the strategy you use should be something which works for you. As an example, the price action strategies can be suitable for ‘X’ traders and it cannot be suitable for ‘Y’ traders so it all depends on the individual’s preference. Not only Forex strategies but also Forex brokers are to be considered wisely but when selecting the Forex brokers it will not depend on the individual preference because the skillful best IB broker is the only choice for all the professional traders. We will help you to get some knowledge on the strategies by jotting down a few strategies.

A few strategies you should focus on

The Blade runner strategy- The Blade runner strategy is one of the best which is suitable for any timeframes and any currency pairs also it’s an exception for EMA crossover. It can also be considered as the trending strategy. However, most of the novice traders in the financial market often overloaded their trading charts with indicators and ultimately fails to execute the best possible signals. So if you truly want to become a professional trader then make sure that you are not trading with the indicator based trading system in the market rather use the indicator as helping tools.

Fibonacci Strategy- these includes the Fibonacci retracements, extension along with monthly, weekly, daily and yearly pivots. This strategy can be used in long time frames. In the eyes of the trained professional Fibonacci trading system is considered to be one of the most profitable trading systems in the world since it allows the trader to execute their trade with minor retracement of the trend.

Forex Fractal strategy- this is not only a strategy but also the market fundamental concept which makes you understand the movements of price and the reason for the movements. However, before you start trading the market using the fractal indicator make sure that you have a clear understanding about the support and resistance level in the market.

If you are not thorough with the strategies you should understand that the introducing broker is there to help you to move your Forex career in a successful manner.

Bollinger Band Bounce strategy- this is the ideal strategy to be used on the ranging market. This strategy is used to confirm trade signals too. The professional traders use the Bollinger band support and resistance level in the market to execute high-quality trades in the market. But if you truly want to make money consistently then make sure that you use the price action confirmation signal in the market.

How to implement the strategies

Actually, you can trade many articles and books related to Forex but none of it could show you the 100% accurate way to find profitable trades. In the Forex market risks are high and it always deals the win-win scenario so even if you implement the best strategy there are chances to earn losses. So you should learn the art of trading perfectly so then you will be able to decide the market movements in a better manner.

The methodology is essential

You should have the consistency methodology to trade Forex. As traders, you should have your own way to trade Forex; if you consider the pro traders they obtain greater trading platforms from best IB broker. So if you truly want to develop a solid trading career in the forex market make sure that you develop a solid trading strategy and execute your trading in the professional trading environment by following proper risk management factors.

Summary- you pick a strategy, you find the best broker and once you land on a profitable trade then you are ready to earn profits. Earning profits in Forex market is not something unachievable but you need a little effort gain success. If you are ready to exert the power then you will obviously come to a good position in the Forex market. When you read Forex articles it gives you an edge to trade Forex. The market of Forex is all about dealing the risks of the market.

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The perfect way to trade the smaller time frame in the market

The forex market extremely volatile market and in order to make a profit in the financial industry you need to execute your orders with an extreme level of precision. Most of the novice traders in the forex market jumps into the online trading world without knowing the market basics and ultimately loses money in real life trading. If you look at the professional traders in the Singapore trading community then you will notice that most of the traders are trading the live assets with the professional brokers like Saxo after developing solid trading knowledge in the financial industry.

Due to recent technical advancement, the traders can execute high lot size trade in the market during the extreme level of market volatility by using the robust trading platform like SaxoTraderGo. Most of the time the market exhibit a high level of volatility during the high impact news release. But trading the high impact news release requires precise knowledge about smaller time frame trading. In this article, we will discuss how to trade the smaller time frame in the options trading industry like the expert traders.

Find the key support and resistance level

Most of the time the market tends to reverse its direction after hitting the key support and resistance level in the market. If you truly want to master the art of smaller time frame trading then you need to have a solid understanding about the support and resistance level in the market. The professional traders draw the key support and resistance level in the high time frame and switch back to the smaller time frame. They simply try to find confluence between higher time frame support and resistance level with the smaller time frame. Once they find the perfect confluence they execute their trades in the options trading industry with perfect risk management factors.

Price action trading strategy

There are many different types of trading strategy in the world. If you look at the experts in the trading industry then you will notice that every single one of them is using the price action confirmation signal in the market. It’s true that if you trade the higher time frame then you will be able to execute high-quality trades by using the price action confirmation signal. But in options trading, you need to use some advanced technique to trade the smaller time frame by using the price action signal.

Most of the professional traders draw the key support and resistance level in the market prior to the high impact news release and once they news is published they try to find possible price action signal in the 5-minute time frame in favor of the long-term trend in the market. It’s true that you will face little bit difficulty in trading the high volatile market conditions but if you trade with solid risk management factors you can easily make lots of money in the high volatile market conditions.

Do the fundamental analysis

Fundamental analysis is one of the key ingredients to execute high-quality trades in the market. Most of the novice traders in the forex market trade the live assets without knowing the perfect way to do the fundamental analysis in the market. It’s true that mastering the art of fundamental analysis is a little bit difficult but if you trade with an extreme level of devotion then within a very short period of time you will see that there is no other alternative other than fundamental analysis to trade the smaller time frame in the market. The fundamental factors in the forex market are so powerful that event the long term prevailing trend in the market often gets changed due to this high impact data.

Trading the smaller time frame is a little bit risky and requires pin perfect execution of the trading plan. If you truly want to master the art of smaller time frame trading then make sure that you follow the above-mentioned tips very precisely.

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The Basics of Technical Analysis

A technical analyst’s best friends are charts and patterns. But to the uninitiated, these are hard to make sense of. Once you get a hang of the basics however, your new-found knowledge can be used to search for potential investment opportunities.

The Assumptions

Before we get ahead of ourselves, let’s start from the beginning. What is technical analysis anyway?

Simply put, it is a study of past price movement patterns and market data to forecast future price movement directions that is built on 3 key assumptions:

1) Key factors are accounted for
The company’s fundamentals, broader economic factors and market psychology, are all priced into the stock, removing the need to consider these factors separately.

2) Prices follow trends
After a trend has been established, prices tend to move in the same direction.

3) History tends to repeat itself
This is because market participants tend to react consistently to similar market events over time.

However, it is important to remember that past performance is not necessarily indicative of future results. New factors or market conditions may arise which deviate from past trends and patterns.

Candlesticks as Building Blocks

You can’t think about technical analysis without picturing a candlestick chart. It may surprise you to know that candlestick charts are not a modern-day invention. They have been used since the 1700s, having been introduced by Homma Munehisa, a rice merchant in Japan.

There must be something to candlesticks if they have been able to stand the test of time. And indeed, a single candlestick holds invaluable information which investors can distil at a glance:

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Spotting Patterns

Individual candlesticks can be strung together to form charts which technical analysts pour over, looking for patterns which give them trading ideas. However, you will have to understand how to spot these patterns and what they mean before you can capitalise.

Here are two simple patterns to ease you into things:

ke2Putting It Into Practice

These two patterns are just the tip of the iceberg. There are many other technical analysis patterns that you can learn about that may help you spot potential trading opportunities.

But even if you know what patterns to look out for, there is an entire universe of stocks to choose from. If you have no prior interest in any stock, it would be hard to know where to begin. It simply wouldn’t be efficient to look at charts of every single stock and find actionable patterns within.

One possible option is to use stock screeners to identify stocks that meet your own criteria. For example, a stock screener can help you find stocks like the one below that exhibited a head and shoulders pattern, during a specified period of time.

Source: Technical Insight on Maybank Kim Eng's KE Trade platform

Source: Technical Insight on Maybank Kim Eng’s KE Trade platform

Technical analysis is useful for investors to understand. But like we highlighted earlier, it isn’t infallible and is built on several assumptions. Therefore, it is best to use technical analysis along with other tools in your investment toolkit, like fundamental analysis, and to practice often in order to gain a better understanding of how these strategies could help you meet your investment goals.

Disclaimer: This message is for general knowledge or information only. It is not an offer or invitation to buy or sell securities, futures or other products or services. Our products or services vary in different jurisdictions, subject to their respective terms and conditions and the licences our affiliates and us hold. This message is not an advice or recommendation for any financial planning, investment, legal, tax or other purposes and, accordingly, no responsibility or liability is assumed by us or our affiliates, whether directly or indirectly, from any person taking or not taking action

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