Important financial or economic news is thrown at us every day.
Fundamental announcements are a very important factor when trading at the Forex market.
Basically when trading at any market. Fundamentals could cause a movement in the market in a shorter timeframe. Take the Brexit for example.
We focus on one economy versus the other economy.
For example Europe against the USA or Great Britain Against Japan etc.
Let’s take a look at the most important indicators that will have a great impact on the market or certain pairs.
An increased interest rate of a certain country will result in a growth of the value of the currency of that country since investments will rise due to a higher interest rate.
A lower interest rate will result in a weaker currency since there will be fewer investments due to the lower rate of return.
This production data is a strong indicator for the industrialized countries.
It is Bullish if the numbers are higher than expected and Bearish if the numbers are lower than expected.
Employment Data
Higher employment numbers will be Bullish for a currency. And lower employment will naturally Bearish.
Higher inflation and higher consumer confidence is a positive economic signal and therefore has a Bullish impact on the currency.
And weaker inflation and lower consumer confidence is a Bearish signal for a currency.
GDP (Gross domestic product) is more of a lagging indicator, but obviously a higher GDP encourages Bullish price. And the lower the GDP, the more Bearish.
This is also how a good Forex trader starts the day. First, you look at the economic news and how it can have any effect on the pairs you want to trade.
forex trading fundamentals
Tips:
Keep an economic calendar on hand that lists the indicators and when they are due to be released. Also, keep an eye on the future; often markets will move in anticipation of a certain indicator or report due to be released at a later time.
Be informed about the economic indicators that are capturing most of the market’s attention at any given time. Such indicators are catalysts for the largest price and volume movements. For example, when the U.S. dollar is weak, inflation is often one of the most-watched indicators.
Know the market expectations for the data, and then pay attention to whether the expectations are met. That is far more important than the data itself. Occasionally, there is a drastic difference between the expectations and actual results. If so, be aware of the possible justifications for this difference.
Don’t react too quickly to the news. Often numbers are released and then revised, and things can change quickly. Pay attention to these revisions, as they may be a useful tool for seeing the trends and reacting more accurately to future reports.
The Hanging Man Forex is a Bearish candlestick pattern at the end of an uptrend.
Mostly appears whenever there is a significant sell-off close to the markets high. However, buyers are capable to lift the pairs price up again so it closes nearby the opening level. Mostly a sell-off as seen as loss of territory for the Bulls. It shows weakness.
As I said before, the Hanging man Forex is Bearish when occurs after an important uptrend. I hear you thinking. This patterns can easily occur after a downtrend as well right? The anser is yes indeed. However, when that happens it’s called a Hammer. Recognized by small red bodies (small margin between open and close prices) and long lower shadows (the lowest is significantly lower as the open high and close).
The Hanging man has no or almost no upper shadow and a lower shadow at least twice as long as the body of the candle. The lower half of the candles shadow will give is the pressure of selling. A terrific Price Action trade setup is when the formation is set at a Resistance level.
Step 1 is marking the Hanging man candlestick formation with your rectangle tool. Be sure that you are at your highest level of accuracy here. Draw from the top shadow to the lower shadow and stretch the rectangle a little to the right (so you give the price a little space to play).
In the example below we see a weekly Hanging man.
Once emphasized the Hanging man candlestick you move on to the daily time frame. In this example the Hanging man was spotted at the weekly chart. As shown below at the daily chart, we have zoomed in to have a better view at the price action.
We’ve just waited for the momentum to change, the Resistance stood ground and the trend has reversed.
Want to know more about trading in forex or do you want to join the forex group?
Please contact me so that I can explain you much more about what we have to offer.
What exactly is supply and demand Forex? Supply is actually the amount that is available and demand is the amount that is requested. If you think about Supply and Demand, it is actually very simple.
Just imagine that you sell bananas from your own farm on a local market. And you do not necessarily have to sell all your bananas. Because you can eat them just as easily as anyone who buys them from you.
Supply and Demand Forex
If bananas reach only 1 dollar per bag, you may be willing to sell 4 or 5 bags. But if the price rises, you decide to make more available. Up to 10 dollars per bag. At that moment you are more than willing to sell every last banana you have. Just because you can easily take all the money you have made and buy something else to eat.
How do you draw Supply and Demand Forex?
Supply and Demand Trading describes 2 types of zone entry’s that are ‘Sell at Supply Zones’ and ‘Buy at Demand Zones’. There are 3 rules in trading Supply and Demand forex.
Always look to the left.
Sell at Supply Zone.
Buy at Demand Zone.
Below is an example of Drop Base Drop. Drop Base Drop is a type of supply zone for a setup for a sell. The bullish Candle (BASE) that tries to withstand prices on the base produces good buying and selling areas here. So price will return at the spot and continue with the DROP price direction.
I often draw my supply and demand zones on an undecided candle. Often this works well for me and my supply and demand forex zones are fairly accurate.
Above is an example of Rally Base Rally. Rally Base Rally is a type of demand zone for a buy setup. The bearish Candle (The Base) that tries to withstand prices on the base produces good buying and selling areas here. So when price return at the base the price is in balance and continue with the RALLY price direction.
Supply and Demand Forex Trade
Of course there are many more ways to trade with supply and demand. Everything about this in my book. And maybe I’ll write another blog here another time. It is too much explanation to give in 1 blog. Below are a few important points that should not be forgotten:
Important that you must know to trade Supply And Demand Rally= Buyer exceed Seller Drop= Seller exceed Buyer Base= Seller and buyer are equal to each other.
Want to know more about trading in forex or do you want to join the forex group?
Please contact me so that I can explain you much more about what we have to offer.
A Fakeout (Fake Breakout) is a form of manipulation to trap breakout traders. If a breakout trader sees that there is a big breakout that breaks through a strong resistance or support, he thinks it will continue to break into the end of the world. However, the price makes the reverse and then it comes back to the stop loss of the breakout trader.
Fake Out Forex
Back in the days when I just started trading, I always reacted immediately to a breakout. Then I lost continuously because the breakout turned out to be a fake-out. But how do you react to a breakout? The key is to have patience and to wait for the signals. Often there will be a retest before a real break takes place. Do you already see that the price reacts to the Supply or Demand bias as the example below you can almost be sure that it is a fake-out.
How do you recognize Fake Out Forex
The Fakeout must have some resistance/support wicks. It will always FakeOut to the base supply and demand above the resistance wicks or under the support wicks.
Wait for the Signals to recognize a possible Fake Out
There are many more signals to which you can recognize a possible fake-out. I can not go into this blog too deeply in this subject, but it is important that you learn to read the market. You have to be able to feel the market and recognize changes in behavior, for example. That is why it is always smart to start with 2 or 3 pairs that you can optimally analyze. Get to know the pair and get to know their movements.
Fake Out Forex
Even I stupidly enough step into a fake-out still sometimes. But do you know why? Patience!!!!! trading requires a lot of patience. Only then can you get the most mistakes out of your trading style and you will get more take profits than stop-losses!
Well come on and start learning to read the market just like a very good book. Get to know it inside and out.
Want to know more about trading in forex or do you want to join the forex group?
Please contact me so that I can explain to you much more about what we have to offer.
Trendlines A trending market is one in which price is moving in one direction. Ofcourse, price may go against the trend every now and then. But when you looking at the longer time frames it would show that those were just retracements.
You can often recognize trends at higher highs and higher lows at an uptrend and Lower Highs and Lower Lows in a downtrend.
Below I have a example of an uptrend. This is the pair of EUR / USD and the time frame is the daily.
Trendlines
I always start by looking at the line chart. This is because I can easily recognize such patterns in this way and also because I like it a bit better to draw my lines.
You can see the Highs and the higherlows on the image above.
Trendlines
Mostly, in an uptrend you will see a obvious pattern of HH and HL from the market’s swing points. And in a downtrend you will see a obvious pattern of LH and LL from the market’s swing points. We can see an uptrend was in place in the chart above. As you can see from the clear pattern of higher highs and higher lows.
If a market is trending lower, I want to pay close attention to the recent swing highs. And in an uptrend we will focus on the recent swing lows. We do this because it not only shows us the overall trend. But it also shows us via the price action if the trend is still intact or not.
Trendlines
For instance, if you have a series of Higher Highs and Higher Lows as in an uptrend. When you see price break down past the previous swing low, it’s a strong indication that the uptrend might be ending. Conversely, in a downtrend we see Lower Highs and Lower Lows, and when price breaks above the previous lower high. It’s a strong indication that the downtrend might be ending.
Trendlines
Finding the market trend is tricky, especially for beginning traders, and most traders will find this to be a sticking point in their trading development. It’s OK to understand various entry triggers and setups, but if you’re trading against the dominant market bias, your probabilities of making money decrease dramatically. There is always a bias, and as beginner traders especially, you would be well served to stick with it.
Want to know more about trading in forex or do you want to join the forex group?
Please contact me so that I can explain you much more about what we have to offer.
IC Markets True ECN trading environment allows you to trade online on institutional grade liquidity from the worlds leading investment banks and dark pool liquidity execution venues, allowing you to trade on spreads from 0.0 pips. You can now trade along side the worlds biggest banks and institutions with your order flowing straight into our true ECN environment.Trade in a true ECN environment with no dealing desk or price manipulation. IC Markets is the online forex broker of choice for high volume traders, scalpers and robots.
For USA & Canada clients i recommend FXChoice which is also a very good broker.
