Saturday, October 4, 2008

Fibonacci number and pin bar reversal



The Pinocchio or Pin bar consists of three bars. The nose of Pinocchio is the middle bar and left bar to the nose is the left eye and right bar is the right eye. The logic behind the Pin bar set-up is that price tried to breakout the previous bar’s range but it failed and many traders who traded the breakout will forced to closed their position ,which will push the price even lower. As you can see in the GBP/USD 4hour chart ,we have a prevailing down trend and after the long down trend the pair tried to retrace to the 38.2% Fibonacci level. As the pair reached the key level, price action shows a lot of uncertainty at that time. After the long side ways movement, we had a failed breakout and this was the key to our set-up. We traded the pin bar with great success as usual.

Important points:


1.A false breakout(Opposite to the main trend).

2.Consolidation at 38.2%,50% or 61.8% level .

3.Consolidation at the strong support or resistance area.

4.50 and 200 moving average S/R zone.

5.Right bar is a inside bar(for better risk-reward).

6.21 Period weighted moving average resistance/support.


Text book Pin bar:


The body of the nose should be at least 66% above the high of the left eye.It is very important that the open/close of the nose is contained within the range of the left eye. The more layers of resistance the nose penetrates, the stronger and more valuable the Pin bar is. Fibonacci retracement, Pivot Points and Moving Average lines are used in conjunction with the Pin bar chart pattern. The longer the time frame, the more reliable the Pin bar is. This pattern identified on a bar chart or Japanese candlestick chart .

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Market Profile Basics

Friday, October 3, 2008

Thursday, October 2, 2008

Fibonacci entry





The market usually retrace after a strong up or down trend move. The Fibonacci correction tool can be used as a way to identify whether the trend will reverse or continue.Traders can take advantage of the tool and enter a position before any breakout happen.If you are a trend trader then 38.2% ,50% and 62.8% retracement levels are the key level to enter a trade,off-course candlestick formation must support your entry.

Basics for newbies

What is pip?

A pip is the smallest price increment in forex trading - pip stands for percentage in point. For example EUR/USD is quoted at 1.4502 bid and 1.4505 ask. In this case the spread (difference between bid and ask) is 3 pips.
Each pip is worth $10 in the Standard size contract and $1 in a mini contract.

What is a Lot?
Spot Forex is traded in lots.
The standard size lot is $100,000.
There is also a mini lot size and that is $10,000.

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Forex update







250 pips


Tuesday, September 30, 2008

Update EUR/USD


Choosing a Forex Broker

Market-Makers
Pros:
Usually give free charting software and news feed
Prices can be "smoother" and less volatile than ECN prices (this can be a con if you are scalping or trading very short term)
Often have a more user-friendly trading and analysis interface
Cons:
They may trade against you. In that case, there will be a conflict of interest between you and them
The price they offer you may be worse than what you could get on an ECN
It is possible that they may trigger stops or not let your trade reach your profit target levels by manipulating prices
During news, there will usually be a large amount of slippage; their systems may also lock up or not allow order placing during times of high volatility
Many of them discourage scalping and put scalpers on "manual execution" which means their orders may not get filled at the price they want
ECNs
Pros:
You can usually get better bid/ask prices since they come from several sources
Variable spreads between bid and ask may give no spread or tiny spreads at times
If they are a true ECN, they will not be trading against you but will pass on your orders to a bank or another customer on the other end of the transaction.
You will be able to offer a price between the bid and ask with a chance of it getting filled
If they support Stop-Limit orders, you can prevent slippage during news by making sure that your order either gets filled at the price you want or not at all
Prices may be more volatile which will be better for scalping
Cons:
Many do not offer integrated charting
Many do not offer integrated news
Many of the trading platforms are less user-friendly
Because of variable spreads (between bid and ask,) it may be more difficult to calculate stop loss and profit target in pips beforehand.


Read the whole article:
http://www.goforex.net/market-makers-ecns.htm

205 pips profit


Update AUD/USD


Still hanging on to AUD/USD ,next support is 90 pips away and i am positive that the pair will reach my target.

Major Economic Indicators

1.Consumer Price Index
2.Employment Cost Index
3.Employment Situation
4.Producer Price Index
5.Productivity and Costs
6.Real Earnings
7.U.S. Import and Export Price Indexes

If you are interested in forex you must know all of them,what they mean and what impact they have on economy.

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