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Two trading strategies in the forex market

There are many different ways of trading the financial instruments. Some professional traders’ uses indicators and EAs and some use raw price action data and chart patterns in order to make a decent profit. In this article, we will discuss two important trading strategies which will help you to enhance your trading performance to a great extent. So let’s begin our journey.

Fibonacci retracement level and technical analysis

Fibonacci is one of the most favorite tools used by many technical traders. Generally, long-term technical traders prefer using this tool since the average holding period of the trade taken by “Fibonacci Retracement” strategy is more than one day. This strategy can be extremely profitable if executed properly.

Advantage of using Fibonacci retracement tools in the technical analysis

  1. 1.       Help to identify the current trend.
  2. 2.       Recent Swing high and swing low can easily be pointed out.

It is one of the most widely used tools used in the technical analysis of any pair. The most significant retracement area of this tools is 38.2%, 50%, and 61.8%.Fibonacci retracement level should be drawn from the most recent “swing Low to swing High” for uptrend and for down trend “swing High to swing Low.”

Figure: Fibonacci retracement level in an uptrend

Here the market formed reliable tweezers bottom candlestick pattern on the 50 % level of Fibonacci retracement. So it’s a “buying opportunity” for Fibonacci trader. Basically, trader looks for price action confirmation pattern on this important level to take the trade.

Trade setup

Most of the Fibonacci trader prefer higher time frame to trade with Fibonacci levels. In the above example, Fibonacci retracement level was drawn from the most recent swing low to swing high. Traders then wait for the market to retrace back to the important Fibonacci levels.

Stop loss and take profit

There are two ways to place a stop loss in Fibonacci trading. Those who are more concerned about their investment should put their stop loss just below the tweezers bottom or the decision-making candlestick pattern. Those who consider weekly time frame to identify the trading signal can put their stop loss just below the 61.8% retracement level.

The “potential profit” of Fibonacci trading is extremely high. Look for a risk reward ratio of at least 1:3 when you trade this important level. Make sure you book half of your profit when it shows enough momentum in trend.

Chart pattern trading strategy

There are many different kinds of chart patterns that the traders use in their technical analysis section. Chart pattern trading is very much profitable when it is done with price action confirmation. Let’s see an example of technical trading strategy with double bottom chart pattern

The double bottom chart pattern is bullish reversal chart pattern. This chart pattern indicates that the prevailing bearish trend is losing its momentum and a new uptrend is going to rule the market. This type of pattern is usually formed after a long decisive move in the market. Professional traders use this chart pattern to ride the new bullish trend from the very beginning of the reversal. Since trading, the double bottom pattern is a counter trend technique, price action confirmation is required when trading with this technical analysis.

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



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Trading Ideas for 18 December 2017

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1.

Amazing Trader EVENT RISK Calendar:

Mon 18 Dec
10:00 EZ- final HICP
Tue 19 Dec
09:00 DE- IFO Survey
13:30 US- Housing Starts/Permits
13:30 US- Current Account
Wed 20 Dec
15:00 US- Existing Homes Sales
15:30 US- EIA Crude
Thu 21 Dec
03:00 JP- BOJ Decision
13:30 CA- CPI & Retail Sales
13:30 US Weely Jobless
13:30 US- GDP
Fri 22 Dec
09:30 US- GB- GDP
13:30 US- core PCE Deflator & Presonal Income
15:00 US- New Homes Sales
15:00 US- final University of Michigan
17:00 US- early Closes
Mon 25 Dec
00:00 Christmas Holidays

Forex Trading Outlook


Potential Trading Opportunities

  • POTENTIAL PRICE RISK: Medium Mon--10:00 GMT-- EZ- final November HICP. flash data are rarely changed.


  • POTENTIAL PRICE RISK: HIGH- Medium Tue --09:00 GMT-- DE- IFO Survey. Key report but usually not a market-mover
  • POTENTIAL PRICE RISK: HIGH- Medium- Tue --13:30 GMT-- US- Housing Starts and Permits. Leading indicators of activity

  • POTENTIAL PRICE RISK: HIGH-Medium- Wed --15:00-- US- Existing Homes Sales. Top Housing statistic
  • POTENTIAL PRICE RISK: Medium- Wed --15:30-- US- EIA Crude

John M. Bland, MBA
co-founding Partner, Global-View.com EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




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