Average directional index(ADX) is also called average directional movement index(ADMX).
This is an indicator for determining the strength of a prevailing trend.
ADX is measured on a scale from 0 to 100.
There are three lines in this indicator. One line represents the positive directional index and another line represents the negative directional index and the third one represents the strength of the trend.
This video shows you how to use this indicator for forex trading.
This is a video series consisting of two videos that shows you what is an alligator indicator and how to use it for forex trading.
This video also shows you What are the entry singnals and exit signals using this alligator indicator.
This video also explains how to apply this indicator to the metatrader.
Alligator indicator is made up of with three smooth moving averages and not exponential moving averages.
When these moving averages are together which means there is no trend. When the alligator moving averages are far apart that means there is a trend.
Alligator Indicator Video 1:
Alligator Indicator Video 2:
The following is the AUZDNZD daily chart as of Nov. 28, 2009. I am seeing two very good short trade opporunities for this currency pair.
1) MACD Divergence
2) Trend Line Break out
1) MACD Divergence:
If you want to know about the MACD divergence you can check it at http://www.forexbees.com/content/macd-divergence-trading-very-powerful-forex-trading-technique. If you observe the following graph which is a AUDNZD daily graph you can clearly see that AUDNZD is forming a divergence in the daily chart. The daily chart is showing higher highs but MACD is showing the lower highs. So there is a very good possible short trade opportunity here. There are many ways to take this short trade.
Whichever happens first in the above short trade entries, I will enter a short trade.
2) Trend Line Break out:
If you observe the AUDNZD daily chart, it clearly tells you that it is moving on a trend line. When the chart is coming down and crosses the trend line with a strong bearish candlestick that is a perfect siganl for another short trade. When the trend line is broken with a strong bearish candlestick I will enter a short trade. It may take some days as currency the chart is away from the trend line.
For each of the above two opportunities I would like to enter them with two short trades each. For MACD divergence I will enter two short trades and for trend line break out I will enter two short trades. Whenever I get little proft I will close one and leave the other by moving the stop loss below the entry point. Check the following picture.
Click on the picture below to maximize it.
AUDNZD daily chart showing two possible trading opportunities
The following is the GBPUSD four hour chart as of Nov 27th, 5 PM EST. If you observe the chart there is a strong resistance line formed at the bottom of the chart. It also looks like it formed a head and shoulders pattern with neckline. The GBPUSD pair bounced back from the resistance line. But if you observe the bollinger bands they are in slowly turning into a downward trend. So eventhough the graph bounced back from the resistance lineI think it will reach the red dot mentioned in the picture at which point it starts going down again. At this point if strong reversal candlestick patterns are formed I would like to enter a short trade. Even though no perfect reverse candlesticks are formed, I will observe the CCI and Stochasticks oscillator. If the CCI reach the overbought region and starts going down and crosses below the 100 line I will enter the trade. Or if the stochastics reach the overbought region and crosses below the 80 line I will enter the short trade.
GBPUSD Four Hour Chart:
GBPUSD testing strong resistance (neck) line
Today is Nov. 27th. I am expecting the USDJPY to go up because of the following reasons.
1) USDJPY daily chart has formed a candlestick which has a long tail and a small body.
2) The candlestick is completely out of the bollinger bands.
3) Commodity channel index is below -100.
4) Stochastics oscillator is below 20.
5) RSI is below 30.
All the above things are very favorable for a long trade. Check the following daily chart.
USDJPY daily chart - candlestick with a long tail and small body out of bollinger bands
I came across this website http://www.forexgforce.com through twitter which is essentially about a forex expert advisor. It seems impressive but I have a lot of questions about this expert advisor. If you have already bought this expert advisor and tried it, can you please post your experiance about this expert advisor? The following are my questions or doubts about this forex expert advisor.
1) This expert advisor is saying that it has made 2.7 million dollars from 10K in just 10 months. But it is not mentioned which year it is? I have never seen an expert advisor that has made this much money in such a less time.
Half of the picture is hidden by other text and not showing some of the important information
2) For this expert advisor all of that are shown as a results are two pictures. The first picture shows the report (I think a backtested results report) but half of the picture is overridden with another text saying that the expert advisor has made 2.7 millions. But this overridden picture contains some important information like gross profit, maximal drawdown, no. of profit trades etc which we can not see as another text is placed above that.
3) The second picture that is shown contains the trades that are taken using this expert advisor but this is also overridden with another text saysing that it turned 10K in to 27K in only 11 trades. This overridden
The above picture showing some of the result but it is also overridden by other text
section contains the actual Stop Loss and Take Profit numbers. So are these figures modified? Also this second picture is not showing any dates when these trades are taken.
4) No proof – No hypothetical or actual demo trading results. All that is shown are two videos where the author is trying to impress people that it really works and even in the video also no results are shown.
5) Reviews – Type “forexgforce reviews” in google and it will bring all favorable reviews which might be eigther sales letters or from people who are trying to sell and make an affiliate income. No forum discussions are found so far.
6) The author is saying that it will be only for a few members and then it will be closed. Is it a marketing technique?
7) The results the author is showing are already missing the stoploss and take profit information. It is also not mentioned about any currency pairs. So for what currency pairs will it work? All currency pairs or only for some currency pairs.
No expert advisor makes 100% profitable trades (all profitable trades). Every expert advisor will have some losses. What about this expert advisor? No lost trades are shown.
9) The author is mentioning in his video that he trained 1400 forex traders. Does anyone know this author? No website of him as a forex trainer is mentioned in this website.
I have posted a review about one expert advisor that I bought and lost my money at http://www.forexbees.com/forex-articles/forex-boomerang-expert-advisor-real-review. Check it out. I have already lost my money on some other expert advisors also. So please write a review if you have bought it already. Please share the results also like the pictures of the backtested results etc.
This is as of Nov. 26, 2009. GBPCAD daily chart is on a trend line. It looks like it formed a double tops also. If you observe the following chart of GBPCAD it is clearly on a trend line. Moreover the lower line of the bollinger bands is showing downwards. If the trend line is broken with a strong bearish candlestick, I would like to enter a short trade. As it is a daily chart I have to wait for this day to see if the line will be broken or not. Or I may have to wait for more days also. Check the following chart. What is your openion guys?
GBPCAD Daily Chart On a Trend Line:
If the above trend line is broken with a strong bearish candlestick I would like to enter a short trade
If you are reading this article, you are also probably looking for some good FOREX trading training course. Before you proceed any further, ask yourself why you want to trade in the FOREX market. Yes, it is a profitable business. But, it is risky like no other business is. When there are several ways in the world to make money, why FOREX?
As a trader or a prospective trader, you must be able to answer what makes FOREX trading better than any other business including trading in the stock market.
Liquidity
Liquidity of anything is the ease with which the thing (commodity) could be converted into money while least affecting its value. Liquidity in the FOREX market is very high because what you are trading is already money! You are trading with the most liquid commodity on the planet.
The liquidity of a market increases with its turnover. The daily turnover, on an average, in the FOREX market is about $4 trillion. This amount is greater than the money traded in all the stock markets of the world put together. Not only does high liquidity make your trading profitable, it also makes insider trading impossible.
Leverage
Leverage determines the extent to which one could control a large amount with a relatively small amount. For example, while trading on margin, you invest a small amount into a broker account to control a much larger amount. What actually happens is that the broker loans you a larger amount. Whether or not the broker actually invests the money in the market shall depend on how his business functions.
Traders can easily have a leverage of 100 to 200 times their actual investment. Such leverage is unattainable even in the stock markets and empowers the trader to make huge profits with very little investments.
Relative Pricing
There are no fixed prices in the FOREX market; all prices are relative. When the price of one currency rises, the price of another is bound to fall and vice versa. Thus, you can always make profit irrespective of what happens to a certain currency.
You never have this advantage in any other market. Take the stock market for example. A major crash in the stock market brings down the value of all the stocks. The only option you have during a stock market crash is to leave the market as soon as possible. This will never happen in the FOREX market as the price of all the currencies will never fall together.
Time zone- Free Trading
Trading in the FOREX market is not restricted to any time zone. So, you always have the option to trade at any time of the day that is convenient for you. The only time when you cannot trade is during the weekend.
Currency trading the Canadian dollar is special. A lot of traders trade with CAD due to some of its interesting features. In order to find out if trading CAD is suitable for you, you must understand these features.
The main exports of some countries are raw materials. This includes Canada whose main export is oil. Certain countries also export raw materials such as valuable stones or metals. For example, the main export of Australia is gold. The currencies of the countries that mainly export raw materials are commodity currencies.
Canada is, in fact, the second larges producer of oil only behind Saudi Arabia. The importance of oil in the industrialized world is well known. It is vital from small garages to large industrial plants. Therefore, oil is also fondly called ‘black gold’.
The value of CAD is very closely related to the price of oil and the conditions in the oil market. Let us look at an example. Assume that a large oil field is discovered in Saudi Arabia. This means the share of Canada in the oil market is reduced as a result of which the price of CAD would drop.
A majority of Canada’s oil exports go to USA, which is the largest consumer of oil. It is from Canada that USA meets the most of its oil demands. Therefore, the oil prices would also affect the USD. The same movement in oil prices would therefore have opposite effects on the CAD and the USD. That is, if the oil prices rise, the USD/CAD would fall. A fall in oil prices would result in a rise of the USD/CAD. A trader with a good understanding of the oil market can trade profitably with the USD/CAD currency pair.
Traders with an inclination towards the commodity markets can make profit trading the USD/CAD currency pair. However, the oil prices are not the only factor affecting the value of the CAD and the USD. There are several political and economic factors involved. Apart from understanding the oil market, you must be aware of the other happenings affecting the USD/CAD value.
Some FOREX traders use hedging to protect themselves from unexpected negative price movements. When used wisely, hedging can protect traders trading on a currency pair for a long time from price falls. Sounds like insurance? Hedging is similar to insurance, but a lot more complicated.
If a spot FOREX transaction is a trader’s first position, he can choose to hedge with another spot order or another trade. The most common form of trade hedged is the FOREX option. Hedging with FOREX options allow you to purchase or sell the currency pair at a certain price in the future. This helps overcome the problem of short delivery date. You could also choose to hedge with currency futures.
FOREX hedging should be done carefully in a step-by-step manner. If hedging isn’t done carefully you will end up receiving very little protection. The process of hedging could be divided into the four steps described below.
i. Risk Analysis
First, deduce the risk the current or planned position is in. Find out if this risk is too high as per the present market conditions.
ii. Finding Your Risk Tolerance
Hedging is not meant to completely eliminate risk, but to reduce the risk to what you consider as normal. So, find out your risk tolerance level. Your risk tolerance should not be based on your present apprehensions and must be one that would be applicable to any situation of the same nature.
iii. Hedging Strategy Formulation
Decide which hedging strategy you would employ with spot or currency options. Choose the strategy which you believe would work well.
iv. Implementation
This is the vital step of implementing the FOREX hedging strategy you chose. Keep an eye on the market for any changes that might affect the implementation.
Two aspects of FOREX trading any trader should master are risk management and money management. Hedging is a good way to bring down the risk arising out of certain circumstances.
The strategy is very simple and works very well. You can find a lot of trading opportunities using this strategy. This strategy involves only parabolic SAR indicator with default settings. Indicators: Parabolic SAR with default settings (Step: 0.02, Maximum: 0.2) Time Frame: Hourly But you need to observe the parabolic SAR on the higher time frame of daily chart. Markets Sessions … [Read More...]
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