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Bearish Counter-Attack Candlestick Pattern

What are bearish  counterattack lines?

The Counterattack Lines Pattern is a two-candle reversal pattern that appears on candlestick charts. This can happen during an uptrend or downtrend. In a bullish reversal during a downtrend, the first candle is a long black candle (low) and the second candle pulls away but then closes higher near the close of the first candle. This shows that sellers were in control, but could lose control as buyers could fill the void.

In a bear reversal during an uptrend, the first candle is a long white (rising) candle and the second candle goes up but then closes lower near the close of the first candle.

Counterattack candlestick pattern: an example

Understanding the model and what it means becomes much easier when you see it in action. So let's take a look. This is what the bullish counterattack pattern looks like.

Take a moment to look at this figure. The bearish candlestick is black while the bullish candlestick is white. Here you can see that prices are in a downtrend. The bears have a firm grip on the market and regularly push prices lower. The first black candle testifies to this. In line with the strong selling pressure in the trend, the white candle pulls away and continues to fall until it hits the session low. At this point, however, the bears lose momentum and the bulls flood the market, driving the price up significantly. Thanks to this strong demand from the bulls, the session ends higher towards the end of the previous day.

On this candlestick chart, you can see that prices are trending up. Bulls have a strong presence in the market and regularly push prices up. The chain of white candles testifies to this. In line with the high demand, the first black candle opens with a "gap up" expecting the price to continue rising. At this point, however, the bulls lose steam and give way to the entry of the bears. Sellers then flood the market and significantly reduce prices. Due to this intense selling pressure from the bears, the session ends in the negative near the end of the previous day.

What does the bearish pattern tell traders?

The bearish counterattack pattern predicts the reversal of the current trend. The appearance of the first bullish candle indicates that the uptrend will continue. The close of the second candle well above the open further confirms the uptrend. Bullish control is also indicated by the second candle, which creates a bullish gap from the close of the first candle. However, the opening of the first candle causes demand to drop, allowing the bears to continue pushing prices lower. Thus, it becomes clear that after the formation of the bearish counterattack candlestick, the uptrend will reverse in favor of the downtrend.

Bearish Counter Lines Traders Psychology

Suppose the market is in an active uptrend. The first candle is still going up, with the close well above the open, creating a really long body. This increases the confidence of the bulls and puts the bears on the defensive. Your caution is warranted at the open of the second candle, which differs from the close of the previous session. However, the opening reduces buying demand and allows the bears to lower the stock in a reversal session that ends near the end of the first candle. This price action indicates a possible bearish reversal that will be confirmed by the third or fourth candlestick  Read More...

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Online Forex Trading - A Way to Enter in the Biggest Financial Market

Online Forex the Biggest Financial Market

Among the many financial markets in the world, the Forex market is the most important of all. In the Forex market, various currencies are traded against each other, with daily transactions often exceeding US $ 4 trillion. The main players in currency markets are central and commercial banks, hedge funds, and multinational corporations. However, the forex market is the easiest financial market to access as a retailer, on a desktop or mobile device, and with little investment capital. Unlike the "big boys" who invest millions in Forex trading, retailers can start with limited funds and no prior trading experience.

All you need to do is choose a forex broker, preferably one of the regulated CFD brokers, and make an initial deposit as shown in the trading account details. In our experience, regulated CFD brokers charge a starting balance of around $ 100 for a normal trading account. However, the amount varies depending on the type of account and the benefits granted to customers. Still, there are novice forex brokers offering micro accounts with deposits starting at $ 1, giving newbies a chance to test the waters before taking the plunge with larger investments and longer trading positions.

Do Forex Retailers Need Huge Investment Capital To Trade?

If retail clients could only invest their own capital in currency trading, the potential for profitable returns would be limited to very wealthy investors. However, the best forex brokers offer marginal trading and leverage to their clients as part of the online trading package. With leverage, currency traders can control more of the market without raising the full amount of capital. forex trading platforms in India Typically, the leverage available on the forex trading platform ranges from 1:25 to 1: 500. Although we have seen regulated CFD brokers offering trades from 1: 1000 to 1: 2000, trades that can be done in This level of relationship can be very risky. and should be avoided by inexperienced traders. In particular, the leverage ratio offered may depend on the customer's trading experience and the type of trading account. how to trade forex for beginners The best forex brokers often ask clients to demonstrate their understanding of forex trading through a simple test on the website. The test results determine the initial leverage ratio that can increase as clients gain trading experience. Successful leveraged trades generate higher investment returns for traders than if they had only traded with funds in their trading account.

Still, leveraged trades can backfire when failed trades occur, as potential losses increase dramatically. Still, the best forex brokers generally protect their clients from catastrophic losses by providing restrictive features like predefined stop loss settings and margin calls on the platform. In our experience, novice forex brokers and regulated CFD brokers pay particular attention to integrating negative balance protection into their trading platforms.

Benefits of forex trading

The forex market offers traders endless trading opportunities, especially when markets are highly volatile. Since currency trading involves predicting the price movements of currencies against each other, the devaluation of one currency means the appreciation of another. In addition, the world currency markets are open 24 hours a day, 7 days a week, Monday to Friday, and the sessions of the Asian, European and Asian markets follow each other due to different time zones.  best broker in India for forex offer support throughout the opening of the markets. In our experience, forex brokers for beginners and experienced traders offer demo accounts for hands-on trading, as well as free training courses on their websites. how to read forex charts It is important to note that regulated CFD brokers are typically ECN (Electronic Communications Network) brokers connecting small investors with liquidity providers in the currency markets. ECN brokers do not trade against their clients, but are interested in their clients' earnings, as they receive commissions on those earnings.

Automated Forex trading

The best forex brokers usually offer automated transactions on their trading platforms. With multiple variables affecting the financial markets, it is very stressful for traders to sit at their desks for hours on end trying to understand the Forex market. Automated trading is possible through the use of forex robots that analyze market movements and generate predictions through trading signals on the platform or even via SMS on traders' mobile devices.  how to make money on forex Traders can choose to act on the signals themselves or use the signals to automatically execute currency trades. Automated signal trading is particularly useful for inexperienced traders and can potentially significantly increase your return on investment.

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Three White Soldiers Definition

Three White Soldiers Definition

The Three White Soldiers candlestick pattern is unusual in that its meaning depends on its context. However, the pattern itself is easy to spot. This training is simply three days in a row with a white candle, each higher than the last. The apparition is of three white soldiers standing in a row, hence the name. The bullish significance of this formation is easy to guess. But how reliable is this indicator?

This indicator is quite strong and very reliable in most situations, indicating an accumulation of bullish strength. For example, when a market is flat or moving mostly sideways, the three white soldiers indicate that the bulls are gaining ground. When the market has entered a downtrend, this candlestick pattern indicates a reversal. However, when the market is constantly progressing, the three white soldiers are considered less important. That's because they fit the current blueprint and aren't even really considered a sequel.

How to identify the Three White Soldiers Candlestick Pattern?

A three-soldier white candlestick consists of three long white royal bodies separated by two black royal bodies. The third long white body should be wider than the first two.

It is formed when three consecutive long candles are formed:

1The first candle must be black, which means that it opens above the opening price of its previous candle but closes below it.

2A second white candlestick should open above the close of the previous one and also close above your open position.

3A third white candle should form with a long body that should stay within or slightly above the range of your previous two candles for the day.

A three white soldier’s candlestick pattern indicates that prices have reached a temporary low after a prolonged decline. A break above the resistance level will confirm the uptrend reversal and suggest that prices will continue to rise. Therefore, the Three White Soldiers candlestick is most effective when used with other technical indicators. This is significant as it suggests a continuation of the uptrend despite several small pullbacks. Therefore, traders can use Three White Soldiers as a signal to enter long positions.

What does the pattern tell traders?

The Three White Soldiers candlestick pattern is a bullish reversal pattern. This indicates that the bears are losing control and a market reversal is very likely. In this pattern, each candle must be above the close of the previous candle, creating a ladder where each step is higher than the previous one. This upward movement of the pattern is actually an indication of the start of an uptrend.

As we have already mentioned, the model of the three white soldiers is a very solid and reliable model. This is especially true when used in conjunction with other indicators like the relative strength index. Therefore, it is also an excellent tool for trading strategies. However, traders must also consider other factors such as volume.

The Three White Soldiers pattern helps start or exit existing operations. For example, a trader may enter a long position when the Three White Soldiers candlestick appears on the chart and the next candlestick shows an open gap (the opening price is higher than the previous day's closing price). It is also useful for day trading where traders can also look for the three white soldiers on 5 minute, 15 minute or hourly charts. After initiating a long position, it is always advisable to set a stop loss at the last low and take profit whenever there are more signs of a trend reversal. Although it is quite rare to spot the Three White Soldiers candlestick pattern, it is a very useful pattern that traders should never ignore.

Difference between three white soldiers and three black crows:

The opposite of the three white soldiers is the candlestick pattern with the three black crows. Three Black Crows consists of three consecutive long-bodied candles that open at the real body of the previous candle and close lower than the previous candle. As three white soldiers capture the bears passing the bulls, three black crows show the bears taking control of the bulls. The same caveats regarding volume and additional confirmation apply to both samples.

The three black crows candlestick pattern is the opposite of the three white soldiers.

Three black crows consist of three consecutive bearish candlesticks.

On the other hand, three white soldiers indicate a change from bearish to bullish and consist of three consecutive bullish candlesticks Read More...

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Bullish Engulfing Pattern.

What is a Bullish Engulfing Pattern?

A bullish engulfing pattern is a white candlestick that closes above the previous day's open after opening below the previous day's close. It can be recognized when a small black candlestick indicating a downtrend is followed the next day by a large white candlestick indicating an uptrend, the body of which completely covers or engulfs the body of the previous day's candlestick. A bullish engulfing pattern can be contrasted with a bearish engulfing pattern. With a single candlestick pattern, the trader only needed one candlestick to spot a trading opportunity. However, when analyzing multiple candlestick patterns, the trader needs 2 or sometimes 3 candlesticks to identify a trading opportunity. This means that the trading opportunity develops for at least 2 trading sessions.

What Is a Bullish Engulfing Pattern?

To find bullish engulfing patterns, look for these two candlesticks side by side:

A small red candlestick, usually at the end of a downtrend.

A much larger green candle completely flooded the previous one.

There should be a gap between the close of the first candle and the open of the second candle. If not, then it's not a devour. What's happening? Essentially, the bearish run continues until the beginning of the second period of the pattern. The gap between the time frames shows that the selling sentiment is still quite strong. But then, mid-session, the buyers take over. They send the market sky high well past the red candle opening and hopefully start a new bull run. The longer the green body, the stronger the signal. Although they usually occur after downtrends, you can also see a bullish engulfment when a market is rising. This bullish continuation pattern is taken as a sign that the move still has strong momentum.

Understanding Bullish Engulfing Candlesticks

When a security closes at a higher price than the opening price, the body of the candle is colored green or left hollow and is referred to as a green or hollow candle. On the other hand, if the closing price is lower than the opening price, the candle is colored red or black and is called a red or black candle. A red candle indicates a downtrend and represents a bearish market phase. Sometimes a red candle is followed by a green candle, so the second day's open price is lower than the first day's close and the second day's close is higher than the first day's close.

Graphically we see that the green candlestick is engulfing the red one. This is a bullish engulfing candlestick pattern.

Example of a bearish engulfing pattern

If we look at the USD/JPY chart below, we can see an example of a bearish reversal. The green candle indicates the last bullish day of a slow market rally, while the red candle indicates the start of a significant decline.

The second candle opens at a similar level, but falls as the day progresses to close significantly lower.

Trading Scenario for Bullish Engulfing

Here are the general considerations and scenarios for trading the bullish engulfing candle.

Trade Entry – The formation of a bullish swallow during a downtrend is considered a reversal signal, meaning the market is expected to go higher in the near future. Traders therefore look to enter a long position at or around the price low of the bullish engulfing candlestick. However, since many traders like to wait for the confirmation candle to form, the buy price may be higher as the trend has already started to drive prices higher. This is the compensation you have to make.

Stop Loss Limit – The stop loss limit varies from trader to trader depending on their individual trading preferences, but they generally set the stop loss on long positions at 2-3 units below the lower price of the bullish engulfing candle. Others entering at a higher price may wish to adjust the stop loss accordingly.

Profit Levels – While actively trading short ranges, traders should follow a risk/reward ratio to determine the potential profit level of their bullish engulfing trading pattern. For example, if the stop-loss limit is set at $1 (the maximum loss one is willing to take on a trade) and the risk-reward ratio one is following is 1/2, then take profit when it reaches $2. If the risk/reward ratio being tracked is 1/3, aim to take profit when the price reaches a level that generates $3 for every $1 stop loss set.

Market Conditions – More volatile stocks with high beta values   often tend to exhibit frequent bullish engulfing patterns. Therefore, the proper selection of stocks/ETFs/Indices is important when making bullish engulfing trades. In addition to the requirement of a bullish engulfing pattern mentioned above, traders should ensure that the chosen price range, band or trendline boundary is breached on significant moves of the second (and following) bullish candle. This guarantees a higher success rate of profitability. Although it should be noted that trading using technical analysis such as candlestick patterns has a limited success rate, it is advisable to adhere to strict stop-loss rules, disciplined trading and efficient capital management  read more.

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PIERCING PATTERN

WHAT IS A PIERCING PATTERN?

The piercing line pattern is considered a bullish reversal candlestick pattern at the bottom of a downtrend. This often results in a trend reversal when bulls enter the market and push prices higher. The piercing pattern features two candles, with the second bullish candle opening lower than the previous bearish candle. This is followed by buyers pushing prices past the 50% bearish candlestick body.

How a Piercing Pattern Works

A piercing pattern has two days where the first day is decidedly influenced by sellers and the second day is answered by enthusiastic buyers. This may indicate that the supply of shares that market participants are looking to sell has dried up a bit and the price has fallen to a level where the demand to buy shares has increased and increased. This momentum appears to be a reasonably reliable indicator of a short-term bullish outlook.

How to identify Piercing Patterns?

First of all, it should be considered that the pattern formulation should consist of 2 candlesticks. The second candle must be such that it starts below the low of the day 1 candle (which is inherently bearish). At the same time, it should close at the top of the middle part of the bearish candlestick. When the bullish candle of day 2 closes above the middle of the bearish candle of day 1, it forms a triangle. Also, it only appears during a downtrend, and price gaps at the beginning of day 2 are necessary. The formation of this pattern is unique in that it shows the reverse trend of the market when its appearance has not been accepted.

It also includes a lower spread after the first trading day, with the second trading day starting around the low and ending near the high. The close must also be a candle that covers at least half the length of the previous day's red candle.

Advantages of using piercing pattern

This method is easy to use and implement. Any investor or trader can implement this technique. This method generally offers its investors a better risk/return ratio. By paying attention and understanding this technique, investors can easily find entry points into the stock or index.

Disadvantages of using piercing pattern

The main disadvantage of this method is that it can only be used for a bullish reversal pattern. And to confirm the reversal pattern, this technique should be combined with oscillators and other technical indicators. One cannot fully rely on this model when making trading decisions. This involves analyzing the entire market movement and not just the candlestick pattern itself read more.

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Hammer Candlestick pattern

What is the hammer candlestick pattern?

When the opening and closing prices are almost the same, it shows that the bulls have taken control of the prices. Since Hammer is a bullish reversal chandelier model, it should form at the end of a downtrend. The long shadow below shows that the bears initially pushed prices too low near the support. But then the bulls came along and eventually pushed the price higher and closed above the opening price. There is a difference between the hammer and the inverted hammer in terms of training. The inverted hammer candlestick is the inverted version of the hammer.

What does the hammer candlestick pattern tell you?

As seen above, Hammer forms after the stock price falls, indicating that prices are trying to bottom out. The hammers indicate that the bears have lost control of the prices, which suggests a possible reversal of the uptrend. It should be noted that this candle should form after 3 or more bearish candles as it gives more confirmation. Confirmation occurs when the post-hammer candlestick closes above the hammer close. This confirmation shows that the bullish return has occurred. Traders should only enter long positions after the confirmation candle. A stop loss can be placed at the bottom of the hammer shadow.

The Difference Between a Hammer Candlestick and a Doji.

A doji is another type of candlestick with a small real body. A doji means indication because it has both an upper shadow and a lower shadow. Dojis can signal a reversal in price or a continuation of the trend depending on the confirmation that follows. This differs from the hammer, which occurs after a price drop, indicating that a possible bullish reversal (if the confirmation path) has only a long lower shadow.

Limitations of Using Hammer Candlesticks

There is no guarantee that the price will continue to rise after the confirmation candle. A long gloomy hammer and a strong confirmation candle can push the price quite high in two periods. This may not be an ideal place to buy as the stop loss may be far from the entry point, exposing the trader to risk that the potential reward does not justify. Hammers also do not offer a target price, so it can be difficult to determine the profit potential of a hammer trade. The results should be based on other types of Japanese candlestick models or analysis  read more.

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What is the relationship between PPO and MACD?

What is the relationship between PPO and MACD?

The PPO is almost identical to the moving average convergence divergence (MACD) technical indicator. Both are momentum oscillators, which measure the difference between the two moving averages. However, there are differences between the two listed below:

Difference between the two, PPO and MACD

Here, the PPO measures the percentage difference between the two EMAs, while the MACD measures the absolute difference (in dollars).

MACD(12,26,9) calculated the absolute difference between the 12-day and 26-day EMA. On the other hand, PPO(12,26,9) MACD goes a step further by showing the percentage difference between these two MAs.

Percentage Price Oscillator (PPO) Formula and Calculation

Use the following formula to calculate the relationship between two moving averages for a holding.

PPO=

26-period EMA

12-period EMA−26-period EMA

​ ×100

Signal Line=9-period EMA of PPO

PPO Histogram=PPO−Signal Line

where:

EMA=Exponential moving average

​Use with Sharp Charts

The PPO can be placed as an indicator above, below, or behind a stock's price chart. Once the indicator is selected from the dropdown list, the default parameter settings (12,26,9) appear. These settings can be adjusted to increase or decrease sensitivity. A slower long moving average combined with a faster short moving average increases sensitivity. The histogram can be suppressed by setting the signal line parameter to 1. This is useful when viewing the PPO behind a stock's price chart. Users can even add the signal line back by applying a 9-day EMA to the PPO. Click "Advanced Options" to add the moving average overlay for an indicator read more.

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Elliott Wave Theory

Introduction to Elliott Wave Theory

Ralph Nelson Elliott developed Elliott Wave Theory in the 1930s.1 Elliott believed that stock markets, which are generally considered more random and chaotic, were in fact traded in repeating patterns. In this article, we take a look at the history of Elliott's wave theory and its application to trading.

WAVES

Elliott has suggested that financial price trends system on the psychology of the dominant investor. He found that fluctuations in mass psychology always manifested in the same recurring or "vague" fractal patterns in financial markets. Elliott's theory is similar to Dow's theory in that they both recognize that stock prices move in waves. But because Elliott also recognized the "fractal" nature of markets, he was able to break them down and analyze them in much more detail. Fractals are mathematical structures that repeat themselves over and over on a smaller and smaller scale. Elliott found that stock index pricing models were structured in the same way. He then began to examine how these repeating patterns could be used as predictors of future market movements.

1st impulse:

Momentum is the most common motivational wave and it is also the easiest to recognize in a market.

Like all motion waves, the pulse wave has five sub-waves: three motion waves and two corrective waves called the 5-3-5-3-5 structure.

However, the creation of the wave is based on a set of rules.

If any of these rules are violated, the pulse wave will not form and we will have to rename the suspect pulse wave.

The three rules of pulse wave formation are as follows:

Wave 2 cannot go back more than 100% of wave 1.

Wave 3 can never be the shortest of waves 1, 3, and 5.

Wave 4 can never overlap with Wave 1.

2nd diagonal:

Another type of driving wave is the diagonal wave, which like all driving waves is made up of five sub-waves and moves in the direction of the trend. The diagonal looks like a wedge that can expand or contract. Also, the partial waves of the diagonal may not count to five, depending on the type of diagonal observed. Like other moving waves, each partial wave of the diagonal wave does not completely traverse the previous partial wave. Also, sub-wave 3 on the diagonal is not the shortest wave.

Diagonals can be subdivided into start and end diagonals.

The final diagonal usually occurs on wave 5 of a pulse wave or the last wave of corrective waves, while the main diagonal can be found on wave 1 of a pulse wave or wave A of a zigzag correction.

3. Zigzag:

The zigzag is a corrective wave made up of 3 waves called A, B, and C that moves sharply up or down.

Waves A and C are moving waves, while wave B is corrective (often with 3 sub-waves).

Zigzag patterns are sharp declines in a bullish rally or advances in a bearish rally that essentially correct the price levels of previous momentum patterns.

Zigzags can also be formed in a combination known as double or triple zigzags, with two or three zigzags connected by another correction axis between them.

Triangle:

The triangle is a pattern made up of five sub-waves in the form of a 3-3-3-3-3 structure called A-B-C-D-E.

This corrective diagram shows a balance of forces and extends laterally.

The triangle can expand, each of the following partial waves is enlarged or contracted, that is, wedge-shaped.

Triangles can also be classified as symmetric, descending, or ascending, depending on whether they point to the side, up with a flat top, or down with a flat bottom.

Partial waves can be formed in complex combinations. In theory, it may seem easy to spot a triangle, but it may take a little practice to identify it in the market.

Elliott Wave Trading Benefits

As a diagnostic tool for identifying potential business opportunities, Elliott Wave Theory offers value by providing a structure for organizing price action information into easy-to-understand graphical representations. With a broad understanding of the rules of this theory, even beginners can begin to use the theory to support their strategies.

At the same time, the popularity of Elliott Wave Trading is an advantage in itself: since it is rooted in consumer psychology, its relevance to forex trading is greatest when a large group of traders observe these patterns and act on them. they. information.

Disadvantages of Elliott Wave Trading

Despite its advantages, Elliott's wave theory also has limitations that can create complications and lead to inaccurate conclusions during business analysis. While Fibonacci models and similar tools provide clear indices and thresholds for traders to observe, Elliott Wave Theory is more subjective when it comes to identifying patterns. Traders must identify these patterns for themselves, and the price movements that mark the start and end of a wave can vary in interpretation from one trader to another. For this reason, some critics argue that this theory is too arbitrary to provide consistent advice for trading read more.

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What is Ichimoku Kinko Hyo?

What is Ichimoku Kinko Hyo?

Ichimoku Kinko Hyo, or Ichimoku for short, is a technical indicator used to measure momentum as well as future support and resistance areas. The all-in-one technical indicator is made up of five lines named Tenkan-Sen, Kijun-Sen, Senkou Span A, Senkou Span B, and Chikou Span.

Ichimoku Cloud Explained

The Ichimoku cloud indicator consists of 5 rows calculated as follows:

1 Tenkan Sen

Tenkan Sen = (9 high periods + 9 low periods) / 2

Tenkan Sen, also known as the conversion line, is usually red in color and is represented by the moving average of the midpoints of the last 9 periods.

2 Kijun Sen

Kijun Sen = (26 high periods + 26 low periods) / 2

Kijun Sen, also known as the baseline, is generally white in color and is represented by the moving average of the midpoints of the last 26 periods.

3Senkou Span A.

Senkou section A = (Tenkan Sen + Kijun Sen) / 2

Typically yellow in color, Senkou Span A is drawn as the midpoint of Tenkan Sen and Kijun Sen, with the line projecting 26 periods into the future.

4Senkou Span B

Senkou Span B = (maximum of 52 periods + minimum of 52 periods) / 2

Generally blue, Senkou Span B is represented as the moving average of the midpoints of the past 52 periods, with the line projecting 26 periods into the future.

5Chikou-Spain

Generally green, Chinkou Span is the current closing price, set back 26 periods.

These are the Senkou Span lines that form the boundaries of the "cloud". When Senkou Span A is above Senkou Span B, the cloud's shadow is generally green; and when Senkou Span B is above Senkou Span A, the cloud's shadow is usually red.

Advantages of The Ichimoku System

1Can be used in almost any trading market, including equity, futures and options, currency, indices, and precious metals (gold and silver) markets, etc.

2Ichimoku allows you to quickly select trade settings or preferences at a glance, including the instant understanding of the direction of price movement, sentiment, momentum, and trend strength.

3Ichimoku shows a very clear picture as it shows a large amount of data, which offers greater reliability in understanding the price movement. This technique combines three indicators in a single chart that allows the trader to make a more informed decision.

4Ichimoku is a trend detection chart system. That is, it works best in markets with clear trends. It helps to find the direction of the price movement so that the trader has a good understanding of the trends in general.

5It is possible to spot false price breakouts with Ichimoku as this system helps you to grasp the direction of the trend in the trading time frame read more.

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Average Real Range

The actual average range indicates the volatility of a currency pair. In the foreign exchange market, the volatility measure is very important because it is related to direct market movements. In any financial market, increasing volatility indicates a market reversal and decreasing volatility indicates the continuation of the market. The spread of a stock is the difference between its high and its low on a given day. Provides information on the volatility of a stock. Large ranges indicate high volatility and small ranges indicate low volatility. The range of options and commodities (high minus low) is measured in the same way as for stocks.

How Does this Indicator Work? A rising ATR indicates greater volatility in the market, with the range of each bar increasing. A reversal with a rise in ATR would indicate the force behind that move. ATR is not directional, so expanding ATR may indicate buying or selling pressure. High ATR levels are usually the result of a sharp rise or fall and are unlikely to be sustained over time.

The Real Average Range is a Moving Average (usually 14 days) of the Real Ranges.

ATR During Volatile Periods

If you recall the results of the May 2014 elections, the stock market showed more movement than ever. The day of the electoral declaration 16. This is a chart put together by Nifty around the same time that you can see the ATR skyrocket amid market volatility.

ATR in Technical Analysis

Average true range is a classic component of technical analysis and measures market volatility in a manner similar to the Relative Strength Index (RSI) and the Exponential Moving Average (EMA). Technical analysis is the study of price movement and ignores all other aspects of fundamental analysis, such as external factors that can affect the price of an asset. By continually studying price charts, short-term traders can assess where profit targets should be pursued, as well as types of execution and stop-loss orders. ATR can be used to generate buy and sell signals based on market volatility so that a trader can decide whether to go long (buy signal) or short (sell signal). Sale).

Calculation

ATR = (Previous ATR * (n - 1) + TR) / n

OR: ATR = average true range n = number of points or bars TR = true range

The actual range for today is the greater of the following:

Today's high minus today's low

The absolute value of today's high minus yesterday's closing price. The absolute value of today's low minus yesterday's closing price.

ATR Indicator in Forex

Currency trading is the largest and most liquid financial market in the world, and traders can often suffer huge losses if they enter or exit trades at the wrong time. When a trader uses the true midrange appropriately in his strategy, he can assess the current volatility of the market to see where to place stop and limit orders. The higher the ATR value of a currency pair, the more generally a stop loss order should be used  read more.

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Bollinger Bands

Bollinger Bands

Bollinger bands are a type of price envelope developed by John Bollinger. Opens in a new window. (Price envelopes define the upper and lower price range levels.) Bollinger bands are engulfing drawn at one standard deviation level above and below a simple moving average price. Since band spacing is based on standard deviation, they adapt to fluctuations in underlying price volatility. Bollinger bands use 2 parameters, period and standard deviations. The default values are 20 for the period and 2 for the standard deviations, although you can customize the combinations. Bollinger bands help determine whether prices are high or low on a relative basis. They are used in pairs, in the upper and lower bands, and in conjunction with a moving average. Also, the ribbon pair is not designed to be used alone. Use pair to confirm signals with other indicators.

History

Bollinger Bands (BB) were created by financial trader, analyst and professor John Bollinger in the early 1980s. The indicator responded to the need to visualize changes in volatility, which of course are dynamic, but at the moment of the creation of the Bollinger Band. volatility was considered static. The basics The Bollinger Bands indicator is an oscillator, which means that it trades between or within a defined range of numbers or parameters. As mentioned above, the standard setup for Bollinger Bands is a 20-day period with 2-step standard deviations of the price above and below the SMA line. Essentially, Bollinger Bands are a way to measure and visualize volatility. As volatility increases, the bands widen. Also, the spread between the bands narrows as volatility decreases. What happens to this information depends on the trader, but there are a few different patterns to watch out for when using Bollinger Bands.

Two types of Bollinger band cases. The Squeeze The Squeeze is the core concept of Bollinger Bands®. When the bands approach and narrow the moving average, this is called a contraction. A contraction indicates a period of low volatility and is seen by traders as a potential sign of higher future volatility and potential trading opportunities. On the contrary, the more the bands are separated, the greater the probability of a decrease in volatility and the greater the probability of exiting a trade. However, these conditions are not trade signals. The bands do not give any indication as to when the change may take place or in which direction the price may move. Breakouts About 90% of the price movement occurs between the two bands. Any tear above or below the ligaments is a major event. The breakout is not a trade signal. The mistake most people make is believing that a price that meets or exceeds one of the bands is a signal to buy or sell. Breakouts do not provide any indication of the direction and extent of future price movements read more.

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An Introduction To Trading Forex Futures

Trading in Forex Futures

The global currency market has an average daily trading volume of more than $ 5 trillion, making it the largest market in the world.1 There is a growing class of derivative securities in this market: Forex. This article defines and describes these futures contracts and their popular uses, as well as introduces some of the analytical tools necessary to successfully trade a contract in the $ 275 billion per day currency futures space.

What are Forex futures?

Currency futures are futures contracts to buy or sell currencies at a specified date, time, and contract size. These contracts are traded on one of the many futures exchanges around the world. forex trading platforms in India Unlike your futures transactions, futures contracts are publicly traded, cannot be adjusted (standardized in terms of fixed contract size and settlement procedure), and are guaranteed against credit losses by an intermediary called a credit chamber.

The clearinghouse provides this guarantee through a process in which daily accumulated gains and losses are converted into actual cash losses and credited or debited to the account holder. This process, known as mark-to-market, uses the average of the last transactions of the day to calculate a settlement price.  how to trade forex for beginners This settlement price is then used to determine whether a profit or loss has occurred on a forward account. In the period between the previous day's billing and the current billing, profit and loss are based on the last billing value.

Future margins in Forex

Forward clearinghouses require a deposit from participants, called a margin. Unlike stock market margin, which is a loan from a broker to the client based on the value of his current portfolio, margin in the sense of futures contracts refers to the initial amount of money deposited. best broker in India for forex Meet the minimum requirement. It is not a loan and this initial margin serves as a good faith way to ensure that both parties to a transaction are doing their part. Also, the initial margin requirement for futures contracts is usually less than the required margin in a stock market. In fact, futures spreads are typically less than 10% of the price of futures contracts.

If an account accounts for losses after a daily market valuation, holders of futures positions must be careful to keep their margins above a set amount called a maintenance margin. how to read forex charts If the accumulated losses bring the account balance below the maintenance margin requirement, the merchant will receive a margin call (not related to the film) and must deposit the money to return the margin to the original amount.

The exchanges of Forex futures

Forex futures are traded on stock exchanges around the world. The most popular is the Chicago Mercantile Exchange (CME) group, which has the largest volume of futures contracts in circulation. Forex, like most futures contracts, can be traded on an open auction system through live traders on a floor or entirely electronically with a computer and internet access. Open-Outcry is currently discontinued in Europe and replaced by e-commerce.  how to make money on forex As already mentioned, in terms of the number of derivative contracts traded with an average daily volume (VAD) of 19.1 million contracts for 2020, the CME Group leads.2 The Intercontinental Exchange and Forex follow in second and third place . With 2807.97 and 2190.55 billion contracts negotiated. Most currency futures are traded through the CME group and its agents.

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Learn How To Trade Forex - Can A Beginner Make Money In Forex Trading?

Introduction To Beginner Forex Trading

Contrary to what any forex expert would have us believe, learning how to trade forex in the first place is not easy. Currency trading is one of the hardest skills you can learn. This is especially daunting if you are just starting to learn Forex trading as a beginner. Right now, if you are struggling to learn how to successfully trade the forex market, you are probably wondering, "Can a beginner make money in the forex market?" By the end of this article, he will know what he can do now to make money in the forex market.

Can A Beginner To Forex Trading Make Money?

If you look at the many forex websites, forums, seminars, and magazines, it seems like everyone is making millions of dollars in forex! The thing is, forex traders love to talk about their winning trades and pose as extremely profitable traders, forex trading platforms in India but the reality is that only 5% of forex traders make money on a consistent basis. Yes, even a beginner can make money in the forex market, but there is a big difference between making money in the forex market and earning full time income, gaining financial freedom, and accumulating wealth in the forex market.

What prevents beginners from earning income?

What prevents newbies from earning consistent long-term income from Forex trading? Well, unlike professional forex traders who work for large banks and hedge funds, most newbies who learn to trade forex do not receive a full-time salary to dive into the markets. how to trade forex for beginners If you are new to Forex, you probably have a full time job where you work at least 8 hours a day and your family and social life outside of that. This means that you have very little time to get to the level where you can act like a pro, and trust me, it takes a lot of time and consistent effort.

It takes years of learning, practice and real experience in the markets to learn how to successfully trade the forex market and reach the level where you can consistently make money in the forex market. Not to mention, by all accounts, that you do unpaid part-time work that chains you to your computer while transacting. how to read forex charts It is something that takes you away from his social circle and also puts a lot of pressure on your family relationships. It's no wonder that most traders who want to learn forex give up in 3 months and never make money from Forex trading.

What can you do now to make money in the forex market?

Now what can you do to make money on Forex trading? The best shortcut I know of is to buy a proven forex trading system to do your trades for you. I'm not going to look you in the eye and tell you that you can just choose any system and make millions because that's not true. Profitable trading systems are rare and you need to choose them very carefully. best broker in India for forex if you can find a trading system that works, you can overcome some of the biggest challenges a trader faces while learning to trade forex.  how to make money on forex You can gain valuable experience in the forex market, cultivate your personal relationships, and most importantly, make money in the forex market while learning how to trade forex.

When you have accumulated the capital and income from the operations of your Forex system and have gained valuable trading experience, you may decide to try Forex trading yourself. Whether you are trading a short, medium or long term automated forex system, this is a powerful solution that will help you make money in forex trading even as a beginner.

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