Category: Forex Education - Page 5

Trend Continuation Patterns in Technical Analysis

In this article we are going to focus on the topic of trend continuation price patterns. We will cover many topics related to technical analysis such as basic concepts, description of trend continuation formations, and tips on how to trade once the trend continuation pattern is found. In this way, we hope to answer the main questions on the subject, especially those related to the identification of these price formations and their use as technical tools to trade in Forex and other markets.

The three pillars of Technical Analysis

Technical analysis is based on three basic principles, which are known as the three pillars of technical analysis, and they are the following:

Price reflects everything.
Prices move in trends
The history repeats itself.

It is essential to understand each of them to really understand what technical analysis is and how it works. Let’s review each principle:

Binary Options on Currencies

by rcanessa

In recent years, in the community of financial markets many traders of all types (large and small) have chosen to trade with currency pairs in the Forex market for various reasons. Part of the appeal of trade in the Forex market, either through Forex spot market or traditional options on currency pairs, is that the prices of currency pairs are in constant motion. We currently live in an interconnected world where a change in the US economy, for example, not only have an impact on the US dollar but also in other currencies such as the euro, Australian dollar and Japanese yen.

If a trader makes the decision to trade binary options on currency pairs, it is important to develop a trading strategy which necessarily requires an adequate understanding of the interrelationships between currencies. For example, if we are trading with options based on the USD/JPY, it is important to have a clear idea about the yen sensitivity to changes in the dollar. Learning the basis of the behavior of the currency pairs in the Forex market is essential to maximize opportunities when trading binary options based on these instruments.

Market Facilitation Index (MFI) Indicator – Interpretation & Signals

by rcanessa

The Market Facilitation Index (MFI) is a technical indicator developed by Bill Williams which analyzes the change in the price of a financial asset in connection with its trading volume, ie analyzing the change in price for each volume unit.

In much simpler words, the Market Facilitation Index (MFI) is an indicator based on the trading volume in the market. The difference between the MFI and the traditional volume indicator is that it does not take into account variations in prices, it only takes into account the number of shares or contracts that are traded in a market. The market facilitation index goes further. That is, it takes into account price variations and, at the same time, the volume traded.

What is a K-shaped economic recovery?

by rcanessa

The outbreak of the COVID-19 pandemic brought an unprecedented slowdown to the world economy. Now, economists wonder what kind of economic recovery awaits us.

With COVID-19 spreading around the world and much of the world’s population confined, the economy stopped, global GDP fell sharply, and jobs were massively destroyed. With the world trying to return to a new normal and states trying to grease the economic machine, analysts are trying to explain what the economic recovery will look like.

Looking for a way to describe the resurgence of the economy, they have turned to the alphabet. This is where we speak of a recovery in the shape of U, V, W and L. But, the letter chosen by most economists to interpret the current economic outlook is K.

Useful Forex Trading Tools

by rcanessa

Experience is a guarantee of successful trading outcomes. Though when you are just starting, or want to understand the peculiarities of the market and exercise all possible resources for your improvement, you need to pay attention to trading tools which will bring you only benefits. The most appealing advantage of these tools is that they save your time! Let us go through three reputable useful tools to enhance your trading performance level, save time and increase profitability.

Calculate the risk of ruin (or probability of success) of a trading system

by rcanessa

This is probably one of the most important articles for long-term success in trading that I have written so far. If I am not mistaken, this is the first time I have written about it, although the issue of risk of ruin is of the utmost importance in achieving long-term profitability. It is about evaluating, objectively, the risk I have of losing a certain percentage of the capital dedicated to investment and trading.

We have talked a lot in the past about drawdowns in general and in trading systems in particular. Specifically, we have explained the concept of the historical maximum drawdown as a risk measure of any kind.

When using a trading system in Forex and in other markets we must be able to answer two questions:

With a certain capital, what risk do I have of suffering catastrophic losses in the system/portfolio due to lack of funds?
If I want to risk only a certain capital, what probability of success do I have in the long term?

They are two questions that come to express the same thing, the relationship between the probability of long-term success and the capital available for the system/portfolio. Naturally we all know that the more we put in, the better, but it is about optimizing the use of money, right?

Tickmill Broker: Platform, Regulation, Deposit | Complete Tutorial

by rcanessa

In this guide of the Forex broker Tickmill, we will learn more about this company. Among other things, we will explain how to open a practice demo account with this broker and how to manage its Metatrader 4 trading platform, one of the most popular and widespread platforms in the online retail financial world. You can find more information about … Read more

Bullish Doji Star Candlestick Pattern

by rcanessa

The candlestick pattern Bullish Doji Star is a trend reversal formation that occurs in bear markets and all timeframes, which indicates that there is a certain probability that a change will occurs from bearish to bullish trend. This is a pattern with an average level of reliability, which can be identified as follows:

The previous trend in the market before the pattern appears is bearish.
In the first period a long black candle is formed
In the second period a Doji is formed with a bearish gap in the price.
Doji shadows (upper and lower) are not extensive.

How can I learn to maximize profits and minimize my losses in trading?

by rcanessa

There are certain facts that have remained strong in recent years in connection with trading. Experienced and successful traders point out that, despite being able to develop trading strategies with high probability of success that allow them to enter the market at the right time through their systems signals they almost never close a position in the optimal moment.

Close the trades at the right time is one of the most challenging aspects of trading in general and for many beginning traders it is difficult to understand that the market exits are difficult to visualize and we just have to execute them as part of our trading plan. In this case, the trades must be closed according to our trading plan with no doubt and fear even if it appears that there are some pips or points that were closed for closing a position “too soon”. We may be able to achieve excellence, but perfection (as far as trading is concerned) is an impossible ambition.

How to choose a Forex Signal Provider?

by rcanessa

Before choosing a Forex signals provider and spend our money paying for their signals, we must take into account a number of important factors since the offer of this kind of services is quite important and each of these services has a number of features both positive and negative which should be assessed in advance.

In this article we will provide a few tips that should be taken into account when selecting a good Forex signal provider that allows us to invest more safely in the Forex market:

+ More