October 20, 2014

2 Sources Of Trading Signals Now Available On IG.com

I have several different trading accounts, but it was whilst logging into my IG.com account earlier today that I noticed a cool new feature.

I'm not sure if these have been available before now somewhere on this site, but alongside all of the forex pairs, stocks, commodities and indices that you have in your watchlist is a little icon on the right-hand side that you can click on in order to get the latest signals for each of these markets.

This icon is grey if the latest signal was published earlier in the day, but it turns yellow if there has been a recent signal for a particular market so that you can trade these signals in real-time if you so wish.

These signals are provided by Autochartist.com and PIA First, and tend to be based on technical patterns, candlestick patterns, and price breakouts based on support and resistance levels.

Of course there is a bit of a conflict of interest because IG want to take your money off you, but are providing you with two sources of trading signals (free of charge) at the same time, which should tell you something.

Nevertheless from what I have seen so far, these signals are pretty reliable, and if nothing else they will at least give you some trading ideas, and alert you to some set-ups that you might want to consider trading yourself.

I certainly wouldn't recommend trading all of the signals provided because some will be better than others, but there will be some set-ups that will have a very high probability of success. Therefore it may be worth keeping an eye on these signals in the future if you have an account with IG.com.


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October 15, 2014

Average Daily Trading Range Of The Major Forex Pairs In October 2014

At this time of the month I always like to look at the average daily trading range of all the major currency pairs, as well as some of the other popular markets.

So you will find listed below the average trading range of all of these markets right now in October 2014 (based on the ATR indicator), alongside the September figures in brackets for the sake of comparison:

GBP/USD - 103 (84)
GBP/JPY - 129 (105)
EUR/USD - 86 (61)
EUR/GBP - 41 (46)
EUR/CHF - 21 (19)
USD/JPY - 73 (53)
USD/CAD - 75 (61)
USD/CHF - 63 (45)
AUD/USD - 90 (63)

FTSE 100 - 89 (50)
DOW JONES - 189 (100)
NASDAQ - 56 (31)
S & P 500 - 25 (14)

BRENT CRUDE - 197 (141)
CRUDE OIL - 211 (151)

You will immediately notice that volatility has shot up pretty much across the board. Apart from the EUR/GBP pair, every single market is trading in a much larger trading range this month, which will inevitably please many day traders.

The major world indices and the oil markets are the ones that have really increased in volatility, rising by around 80-90% in some cases. So there are no shortage of markets to trade right now if you are looking to profit from large intraday price swings.

A few months ago we were all moaning about how quiet all of the markets were, particularly the major forex pairs, but there are no excuses right now because all of the markets are extremely volatile at the moment.

Of course just because we are seeing some big price moves on a daily basis, it doesn't necessarily mean that it is easy to make money. However it does make things a little easier because you can extend your price targets, and you should hopefully find that you won't get stopped out all the time, which can happen when the markets are quiet.


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October 9, 2014

Can You Really Start With $100 And Make A Living At Forex Trading?

This is a guest article from Jack Maverick. I hope you find it useful.

Can You Really Start With $100 And Make A Living At Forex Trading?

I say, “YES!” You can start with as little as $100, and within 3 months be making a pretty decent income, about $90 a day…within 6 months be making approximately $7,500 per week (how’s THAT for a 3-month increase in income?)…and in less than one year (about 10 or 11 months), have made OVER $1 MILLION DOLLARS. If you’re a bit skeptical, fine, just stay with me here a minute and I’ll show you exactly how that can happen for you.

Here’s how: All you have to do to accomplish that goal is manage to grab about 5 or 10 pips a day. That’s it – you don’t have to shoot the moon – all you have to do is average netting a 5-10 pip profit every day. To do that, I use a very simple, but time-tested 15-minute trading strategy that nearly always offers me that opportunity. I watch Eur/Usd, Gbp/Usd, and Aud/Usd using this forex trading strategy, and there are usually several opportunities per day to put it into play, to make a quick profit, and get out and be done for the day.

The problem most people have – or create for themselves, actually – is trying to overreach, to make a killing in one day. Although that’s always fun, it’s simply not necessary – you can become a millionaire in less than a year, starting from virtually nothing, just by taking very small daily profits. The challenge is simply practicing the necessary self-discipline to be satisfied with doing that. It’s not easy, because in the very beginning – if you start from that $100 level anyway – your profits are going to look very small, virtually meaningless. But you have to realize and believe that they aren’t meaningless, they’re just the necessary first steps toward creating a fortune for yourself in a ridiculously short period of time. You have to tell yourself over and over, “This is how I become a millionaire. What I’m doing today to make $10, if I just keep doing it, this exact same thing will be making me $20,000 a day 7 or 8 months from now.”

You can get all the details of my 15-minute trading strategy, absolutely free, right here – My blog. But for now let me just show you a chart of the strategy in action. Here’s a 15-minute chart of Gbp/Usd from today (October 7, 2014), and here’s how I played it – I bought at 1.6079, at the close of the candlestick that’s marked with 3 up arrows directly above it, a little right of center on the chart. Just 2 candlesticks later – 30 minutes – price was up to 1.6092, and I’d made my money for the day. Simple as that. (I actually trade as follows – I take off half my position when I hit that initial 10 pip profit target, leaving the other half to run in case there is a nice continuing move, with a stop 1 pip above breakeven – so I actually made more money.)

oct09chart.png

That’s it – 10 pips, trading just 5 micro lots, is $5, which, as you’ll see from the long profit chart that follows below, is all you need to make to start out with. You, of course, increase your lot size as your account grows (e.g., as you move up to having about $150-$200 in equity, gradually increase your trading size to 10 micro lots). The basic calculation on lot size is always just figure out, “How many lots do I need to trade so that a 10-pip profit will equal a 5% profit on my equity for the day?”

So let’s see how this small stair-stepping account growth works out. You’ll have to scroll down a fairly long way to get to your million dollars at trading day 189, but it’s well worth the trip. :)

There are approximately 20 trading days in a month, about 220 trading days in a year. You can see from the chart below that you hit that magic million dollar level on day 189, which is about 11 months from now. Is that all right with you, if you’re a millionaire by September of next year? But the really nice part is that although, as I said, in the beginning you’re talking very small absolute dollar amounts, within just 3 months (day 60) you’re making roughly the equivalent of $500 a week, and just three months after that (day 120) you’re up to making $7,500 a week! And you started with just $100! If you’re unemployed at the moment, that should look really good to you. I don’t know of any other home business that someone can start with just a $100 investment and within 6 months be earning at the rate of a $300,000 a year income, and in less than a year actually bank over $1 million.

So, scroll through and have a look. The third column figure is your profit goal for that trading day, which is always just a 5% increase in your equity; the first column is your account equity balance at the beginning of that trading day; the second column is your equity balance at the end of that trading day, with your profit for the day added in. And again, keep in mind that there are approximately 20 trading days in a month, so you can check as you go along to see how much you’re making per day at the beginning and end of each month (it increases at an exponential rate, you’ll see).

oct09table.png

…….

oct09table3.png
…and so on until…

oct09table2.png

Okay, now, is it really that easy? Not quite, no. In fact, you’ll have a losing day now and then, which will slow you down a bit (however, you’ll also have some days where you make more than your goal for the day, which will speed you up). In reality, it will probably take you closer to 18 months to achieve millionaire status. Gosh, that’s just terrible, isn’t it? – having to wait a whole year and a half to become a millionaire. :)

But the bottom line is this: Can you start with next to nothing and become a millionaire through forex trading? – YES, you can. And all it really takes is the discipline to be willing to settle for small, daily profits, rather than giving in to the temptation to try to make a fortune in one day. Make it your mantra, to repeat to yourself all day long – “10 pips a day is one million dollars”.

Go, begin your journey now. The sooner you begin, the sooner you’ll have that million dollars. Here again is the link to my 15-minute trading strategy – My 15 minute strategy

And let me give you one more very helpful thing to boost you along on your million dollar journey. Get this very unique trading strategy that literally WINS EVERY TRADE. You can’t use it to get to a million in less than a year, because it won’t make you 5% a day (you’ll actually have to do the work for that part). But it WILL bank an additional 10-30% or so a month into your trading account with virtually no risk at all. It’s just like having an automatic second stream of income pouring into your account every day. Get it here now by clicking this link – The Forex Mortal Lock Profit

Go get filthy rich – it’s lots of fun.

Jack Maverick

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October 8, 2014

Why The RSI And Stochastics Indicators Cannot Be Relied Upon To Predict Market Tops And Bottoms

When people first start developing an interest in forex trading, they are naturally drawn to the world of technical analysis because it can obviously help them find winning trades.

Two of the most popular indicators that people will learn about are the RSI and stochastics indicators because these oscillating indicators would appear to be really useful at predicting market tops and bottoms.

If the RSI is over 70, then the market is overbought, and if it's below 30, then it's said to be oversold.

Similarly the market is said to be overbought if the stochastics indicator is above 80 and oversold if it is below 20.

I can remember being very excited about these two indicators when I first started using them back in 2001 / 2002, and still use them today to help me buy good quality stocks at exactly the right time, ie when they are both in oversold territory. However from a forex perspective they are pretty much useless in all honesty.

In fact I don't even have either of these two indicators on any of my forex templates anymore (I use different sets of indicators for different strategies) because they're of limited use.

The major problem you have is that whilst they can sometimes be totally accurate at signalling the end of a particular trend, they can also be completely useless.

For example, if the market is trending strongly upwards and continuing to make new highs, then the RSI could go above 70 and stay there for a very long time, or it could dip below 70 every time there is a slight retracement and keep rising back above this level when the trend resumes.

Therefore any short positions that you may have taken when the RSI is above 70 will have been stopped out on numerous occasions.

The same thing applies when the market is falling sharply. If you keep going long when the RSI falls below 30 and the stochastics indicator falls below 20, you can get in all kinds of trouble because if the price keeps falling, these indicators will be meaningless.

You only have to look at the daily chart of the EUR/USD chart for evidence of this because these indicators were in oversold territory for many weeks and yet the price kept on falling. Therefore if you were using these indicators to call a bottom, you would have been stopped out every time.

eurusdoct8.png

The same can be said when you are trading the short-term charts as well. So as I say, you can't really rely on these two indicators to predict the market tops and bottoms with any real accuracy.

You are better off looking at tell-tale candlestick patterns, such as pin bars, for example, and looking for divergence patterns on certain indicators such as the MACD and MACD histogram, for instance, if you are serious about trading price reversals because these are far more effective.


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October 3, 2014

A Perfect Breakout On The GBP/JPY Pair To Start The Month

It doesn't happen very often, but sometimes you get a perfect breakout on one of the major forex pairs, and that was certainly the case with the GBP/JPY pair this week.

I posted a few tweets to my Twitter account on Wednesday saying that I was keeping a close eye on this pair and eagerly waiting a breakout on the 4 hour chart, and thankfully the price did eventually break downwards on this time frame after a long long period of consolidation.


gbpjpy3oct.png


This pair had traded in a sideways trading range since September 19 and you could just tell that it was going to break out strongly when it did eventually happen, and so I jumped into a short position after the 4 hour breakout candle closed at 8PM (UK time) at 176.62.

I was given confidence by the fact that it closed just below the previous breakout attempt on September 23, which was quickly rejected, and the fact that the MACD, TRIX and Smoothed Repulse indicators had all crossed through the 0 line at the same time. Plus the ADX had turned upwards during this breakout candle to signal the start of a new trend.

However this was primarily a breakout trade based purely on price action. These indicators just gave me added reassurance and made this even more of a high probability trading opportunity.

As is often the case, the difficult part isn't deciding when to enter a position, it's deciding when to exit a position.

So in the end I decided to close half the position for 100 points profit (at 175.60) the following morning, moved my stop loss down to break-even, and set my new price target at 175.10 because this looked like a strong resistance level as it was close to the EMA (200) on this time frame and just above the 50% fibonacci retracement level.

Looking at the chart today I wouldn't be surprised if the GBP/JPY continued falling to the 61.8% fibonacci level at around 173.70, but I'm more than happy with the profit that I have made from this particular trade.


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October 2, 2014

The Trades That Might Have Been

One of the hardest challenges you face as a forex trader is learning to deal with losing trades. However as many people will tell you, it can be just as difficult to deal with the trades that might have been.

I'm sure you know what I'm talking about. The times when you close a short position for 50 points profit, only to see if fall another 300 points, or the times when you wait ages for a breakout, only to see a golden opportunity missed when the price finally breaks out when you're away from your computer.

You will find that this happens all the time if you're a regular trader, and it can be immensely frustrating, but you just have to learn to accept these missed opportunities and move on. As long as you're slowly building your equity curve over time, that's all that really matters.

I myself missed out on a bumper payday just yesterday. This wasn't actually a forex trade, it was a two-ended binary position on the (US) crude oil market, which is one of my favorite markets right now.

After a dramatic fall on Tuesday, I was looking to get involved with this market for the first time this week because I felt we would either see some kind of short-term rebound, or a continuation of this downward move towards the $90 mark. Plus I knew that the latest figures for crude oil inventories were scheduled in the afternoon, which nearly always move the markets.

Therefore with the price hovering around the 91.50 level yesterday morning, I entered one-touch binary trades at 90.70 and 92.30 (and added a few more positions at 90.90 and 92.30 a few hours later when the prices came in even more) and because I got some decent prices, I was guaranteed to make a decent profit if the price hit either of these two levels.

Thankfully the price did go up in the afternoon and went straight through the 92.30 level so I was now nicely in profit for the day whatever happened.

Now usually this is the end of the trade unless the price retraces, in which case I will look to close out the other position in-running and reduce my losses from this binary trade or let it run, because on rare occasions it will hit both extremes and generate a massive profit.

Well this is exactly what happened yesterday because the price subsequently fell sharply and took out 90.70 just before the market closed at 7.25PM (UK time). However prior to this I closed out the trades at 90.70 and 90.90 as soon as the price fell to around 91.20 because there was very little time left and I didn't think it would make it that far.

So subsequently I made a very good profit overall, but still missed out on a bumper payday because it ended up taking out every single one of my one-touch binary trades during the course of the day.

In the past this would have left me annoyed all night, but instead I just tried to forget about it and move on. In fact there was an excellent breakout opportunity unfolding on the GBP/JPY pair, which I had been watching for ages, so I was quickly on to the next trade, but more on that tomorrow.

The point is that you mustn't dwell on these missed opportunities because you will end up going nuts if you do. Just move on to the next trade and forget about it.


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