We need to accept that we are emotional creatures and that our psychology is governed by our emotions. So the key is - how do you manage your emotions? You can become the designer of the emotions that you respond to. Think about yourself when you are in the midst of engaging in a trade. Your body starts tensing. Your heart accelerates. Your eyes are fixated on the screen. If cortisol is pulsing through your body, it can produce a sense of fear.

If testosterone levels become elevated, it produces a sense of grandeur. Both of these responses can lead to costly trading mistakes. You can be afraid to pull the trigger on a trade, exit a trade early or double-down on a risky trade. You perceive a threat, and you are either going to attack it or avoid it. If you hesitate on a trade, you are in avoidance.

If you revenge-trade after a losing trade, you are in attack mode. Developing a curious mind allows you to act with patience and discipline, keeping your long-term interests in mind. We need to rationalize our behaviors so they make sense to us. How is your body genetically predisposed to handling emotion? The markets do what they want to do. Nothing can be predicted with absolute certainty, only varying degrees of probability.

We have been trained as we grew up not to make mistakes. We have conditioned ourselves and our brains are biased to predict with certainty. So your brain becomes a negative assessment machine, and you continually traumatize yourself by worrying. Fear Fear is wear all thought becomes hijacked, and you panic or freeze. Remember that the brain associates psychological discomfort with biological threat, and we need to learn to avoid fight or flight behaviors.

Ninety percent of traders lose money because they are making fear-based trades or impulse-based trades. On the fear side, they are afraid to pull the trigger at the right time, or they get out of trades too early.

The impulse-based trader gets involved in revenge trading, throwing good money after bad. To develop as a trader, you need to be able to confront fear to change your pattern of reacting to an uncertain world. Your brain is a negative assessment machine that does not distinguish uncertainty from fear. It forms self-fulfilling patterns based on the avoidance of fear and uncertainty. The best way to get started in gaining control of your emotions is to label your fears: 1. Fear of uncertainty hesitation 2.

Fear of loss pulling the trigger at the wrong time 3. Fear of missing out impulse trades and exits 4. Fear based urgency to make up for prior losses revenge trading 5. Fear of not being right making a mistake 6. Fear of self-sabotage blowing yourself up 8. Fear of success or failure 9. Fear of growth and change moving out of your comfort zone Which one of these fears drives your trading? That feeds your state of mind, which forms a decision, and triggers a trade which ultimately has a profit or loss.

The results of that trade feed into your emotional state prior to your next trade. Trading without emotion is not possible, but it is possible to design the mindset you need to trade with calm impartiality. Your trading account is the scorecard if your emotions are under control.

If you regulate breathing with steady diaphragmatic breathing, you lower your heart rate and alter the emotion. Our thoughts and our beliefs are not us, we are separate from them. Knowing that, you can step outside of yourself and question your thoughts and beliefs. You can use powers of observation and curiosity, and dissect the voices in your head that are governing your trading decisions.

Observation is a strong mindfulness tool. Once you observe your fear-based emotions, confront them and question them, then you can start becoming mindful. If you ignore the voices and patterns you have developed in your head, then a perfectly good trading plan can become wasted. Once you do that, you can develop the foundation of a strong psychological trading plan.

Some of the self-limiting beliefs we need to master are: 1. Mistakes are proof of my inadequacy. This fear-based thinking shows up in our minds as thoughts, and our avoidance of them is what keeps us fused to them. What you need to do is clean house and invite some new guests to the table.

Changing self-limiting beliefs requires recognizing what they are, and addressing them for long-term re-organization of self. Compassion is the emotion that reorganizes the self for internal validation rather than external validation. All it does is continue to feed self-limiting beliefs of inadequacy or powerlessness. As a trader, you need to build a mind for the management of probability. Self-Compassion of a Caregiver Recognizing you are valuable and important From time to time, each of these programs has been called into service, and you can remember instances when you faced a challenge head-on, showed extraordinary discipline, exercised impartiality and demonstrated compassion.

These traits are inside you, and they need to be called to the surface. They are your friends in the trading world. That gets you to mindfulness Stage 2.

Next you disrupt the self-limiting beliefs that have been developed without your knowledge Stage 3. When you can trigger the emotions of courage, discipline, compassion, patience and impartiality, then you have re-organized the trading mind Stage 5. You are developing a calmer mind that thinks and processes information, rather than knee-jerking to perceived threats.

With an empowered mindset, you approach uncertainty from a position of Discipline, Courage, Patience and Impartiality rather than fear. Their emotions are under control and they face uncertainty with courage, discipline, patience and impartiality. They are almost Zen-like. They seem to process information effortlessly, and make well-reasoned decisions. These people are not operating from a fear-based mind. None of that noise is cluttering up their minds. You need to recognize and identify your fears, and the self-limiting belief systems you have patterned based on fear.

When you get to this place, your trading account will look much better. In addition to this, he has worked for many years as a personal development coach teaching individuals how to affect positive change, peak performance, personal growth, and leadership potential. His work centers on how to break the fear-based, self-limiting patterns to which the brain adapts us for survival and how to reorganize the self to a higher level of functioning.

This is accomplished by learning how to manage biological fear and its impact on thought and thus access much more empowered parts of the self that shift our capacity for positive performance. Most traders trade in a state of fear, so they never can open the possibility of performing on a higher level. His emotional regulation training has been used to treat violent prisoners, break the cycle of domestic violence, and free people from the limitations of fearful thinking. His belief is that, until you understand the power of your biology and how to manage it, you will be overwhelmed by it.

Momentary success will be sucked down the drain of the pattern- making machinery of your brain. To break free of old limiting patterns, you must reorganize the brain -- not the mind. The mind follows the brain. What does this look like? Go to any standard motivational seminar and feel the emotion -- it feels like you can change the world and it will last forever.

Then where are you 4 weeks later or less -- back to the same old place. His work with traders began when one came to him seeking improvement in his trading performances. More traders showed up seeking training due to this success. Welcome to this mini Forex Foundation course, your roadmap to trading the Forex Markets. Today I run fxtradersedge. com, a comprehensive program that offers courses and numerous coaching and trading services.

Trading Pub asked me to explain what makes Forex a great market to trade so I thought I would start with some basic terminology and history, to show you how the market has evolved as one of the fastest growing markets to trade. I will then switch gears completely and talk about a strategy which is very easy for a new Forex trader to grasp. It is even good for advanced traders! The strategy is called the continuation and reversal pattern and we will show how to use it during trend and end of trend cycles.

What is Forex? Foreign Exchange Trading is known as Forex, or by the acronym FX. Today we are going to talk about the transactions of the foreign exchange market known as the spot market. This market involves a worldwide electronic network of banks, brokers and other financial intermediaries.

This ensures that transactions happen in seconds directly with the market makers. All profits are settled immediately in cash. The Lingo in Forex is about pips and lots. What is a pip? If we look at the EURUSD at 1. When we talk about a move in the EURUSD of 5 pips, we are referring to a move from 1. Figure 1: The Forex Spot Market A pip move is from 1. If we look at the USDJPY at If the USDJPY moves 1 pip in the market, it moves from Nowadays, brokers quote to 5 decimal places in the EURUSD and to 3 decimal places in the USDJPY.

For example, the EURUSD would be quoted as 1. Currencies used to only be traded in specific Lot or Unit sizes. Today brokers allow traders to vary the Unit size without sticking to the standard Lot sizes. That margin will vary according to the leverage the broker is willing to offer. Of course, any losses or gains on the position will be added to or deducted from the balance in the account. The Forex market has evolved faster than any other financial market in history. However, foreign exchange transactions existed a long time before that.

Between and currencies gained a new phase of stability because they were supported by the price of gold. The Gold Standard replaced the age-old practice in which kings and rulers arbitrarily devalued money and triggered inflation.

The Gold Standard was a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. Beginning in , countries operated under the Bretton Woods Accord. A total of 44 countries met in New Hampshire to design a new economic order.

However, heavy American spending on the Vietnam War led to persistent U. balance-of- payments deficits and steadily reduced gold reserves. Finally, on August 15, , President Nixon announced the suspension of converting dollars into gold, unilaterally devaluing the U.

dollar and effectively ending the Bretton Woods Accord. After the Bretton Woods Accord, the Smithsonian Agreement was signed in December of This agreement was similar to the Bretton Woods Accord, but it allowed for a greater fluctuation for foreign currencies.

The US trade deficit continued to grow, however, and the US dollar needed to be devalued beyond the parameters established by the Smithsonian Agreement and this resulted in its collapse in An acronym I developed is the Be RICHeR network and this network trades Forex.

Figure 2: Who Trades Forex? The Retail Forex Brokers came on the scene after Investment Management Firms have foreign exposures from their stock and bond portfolios and they transact with the banks. Corporations in their daily, monthly and yearly foreign exchange transactions deal with the banks.

The Central Banks are also key players managing their currency exposures and dealing with investment banks. Hedge funds manage a variety of asset classes, including currencies, and they transact with Banks. Finally, we have eRetail, dealing electronically through trading platforms of retail Forex Brokers. When you take your first currency trade, you too will become part of this Be RICHeR Network! A CFD, or contract for difference, is a product whose price is based on the underlying instrument and is considered an over-the-counter OTC product, which is not traded on any exchange.

For most brokers, the lists of offered instruments continues to grow. As retail traders, we have the ability to trade all of these instruments on Forex trading platforms. The number of markets quoted will vary from broker to broker. One way to do that, is to look at several markets at once to compare them.

In this example we are looking at the major USD pairs to see if there is a particular trend in these pairs. Then we can do the analysis and decide which pairs to trade and when. In the example below, the USD pairs that have the cleanest price action include the commodity currencies, the USDCAD, NZDUSD and AUDUSD. The three other pairs — the EURUSD, USDJPY and the GBPUSD - illustrate choppy, sideways markets which are not high probability charts for the upcoming trading session.

In addition to scanning the charts for clean price action, it is necessary to review the news releases to be prepared for events which could move the markets. An understanding of the fundamentals is key to relating the price action to the economic backdrop affecting the markets. The simple trading strategy that I have selected is the strategy for continuation trades and end of trend trades. First we are going to look at the pattern as an end of trend, or reversal trading strategy, also called the top and bottom pattern.

The top and bottom pattern is a very powerful pattern that signals a trend reversal. It can also be used as a trend continuation, which will be described shortly.

First, the reversal pattern. Scenario 1: In an uptrend, the market hits a new high, labelled point 1. Price then pulls back to a short-term support level, labelled point 2.

Finally, price moves up to an area between points 1 and 2, labelled point 3. It then reverses down again and begins a trend in the new direction. Trade Entry: The pattern is complete when the price trades below point 2. At a top, the strategy is to sell on a break of point 2. The measuring objective is the distance between point 2 and point 3 projected below the break at point 2.

The stop loss is set just above point 3 but a more conservative stop loss is above the start of this move, at point 1. This is a choice that the trader must make and only by trading it over and over again will the trader feel comfortable with the choice of a stop loss. Also watch for reversal candlestick patterns at point 3 to trigger the entry.

Figure 5 summarizes the top and bottom trade. We just looked at scenario 1 which is the top. Now we will discuss the opposite scenario of a bottom. Scenario 2: At a bottom, the market hits a low at point 1, trades up to point 2, trades back down to point 3, and back up through point 2 to begin a new uptrend.

I also learned that if the pattern has between 10 and 20 bars between points 1 and 3, it is more likely to succeed. What I have to say about that is back test and see for yourself. I take most of my trades based on this pattern alone. It is very powerful. You can also use this pattern on a smaller time frame once the market reversal is identified.

You will get a closer entry to point 1 and will therefore be able to take a larger position, using the same money management rules. The formation is classified as a major reversal pattern and is one of the best indicators of a trend reversal. They are found on every time frame. The swing or position trader will look for these patterns on the weekly, daily and 4-hour charts.

The momentum trader will trade these patterns on the 5-minute, 1-minute and tick time frames. Stop losses for tops should be set above point 1 initially, and positions need to be sized accordingly so as not to exceed the risk limit for the trade. Another option is to place stops above point 3. However, the odds are increased of being stopped out early. It is better to take a smaller position and leave the stop above point 1.

Stop losses for bottoms are set below point 1, or alternatively, below point 3. Optional: On a reversal using any time frame, wait one or two candles for confirmation. Ideally price will come back and retest the breakout or breakdown point for a safer entry. This helps to avoid whipsaw. At this point in the video we look at more reversal examples using market data. The Pattern as a Trend Continuation Strategy We have just completed the section on the reversal pattern as confirmation of the end of the trend.

However, while the end of trend top and bottom is a great entry method for taking reversal trades, most of your trades as swing and day traders will be trying to get into a trend move — getting into the trend in the middle of it.

How do you get into the trend in the middle of it? The safest trades you can make are the ones where you are trading in the direction of the current trend.

In other words, if the trend is up, you should be long — and if the trend is down, you should be short. If you miss the start of the trend, you still need a method to enter a confirmed trend during its progress. Enter on a break of the newly established point 2 with a stop above point 3. Follow the market up or down, depending on the trend.

Method 2 Draw your points. Enter at point 3 once price turns down with a stop above the new point 1. The safest trades are taken in the direction of the current trend. Trade entry is easily done with the internal formation. In a trend, the first pattern is the reversal pattern that occurs at market tops and bottoms.

Take note how each point 3 becomes the new point 1 for the next internal pattern. In a strong trend, the retracements can be as shallow as Preferred entry is on the break of point 2.

However, alternatively, you may enter at point 3. And, wait for the candles to start trending again before entering.

Profit taking is recommended along the way for day traders. Position and swing traders may hold the positions and trail the stop every time we trigger a new trade. The stop would then be placed above the new point 1, and previous stops would be moved to the new point 1. At this point in the video we look at additional continuation examples using market data.

Once a trader understands that all of the markets are related in some way — currencies, commodities and stocks — and that correlations exist between certain markets, the excitement comes in understanding these relationships in order to confirm market moves day in and day out.

Learn the fundamentals, scan the markets for the best markets to trade, and select a simple strategy such as the Strategy to stay with the trend, or find the end of the trend for a market reversal. She works with members of her program in group and private coaching sessions and is passionate about teaching individuals how to trade the market cycles and use entrepreneurial skills and habits to effectively manage their business.

In this program, we are going to take you on a journey to further your trading education. That means that we will start with the basics, cover the intermediate levels, and end with more advanced concepts. CLICK HERE TO LEARN MORE! The report is broken down into a four different sections: Section 1: Forex Basics — Whether you are new to Forex trading or have some experience under your belt, this section helps lay a solid foundation.

Section 2: The Continuation Method — This trading strategy has been one of my closely guarded secrets until now. Read and re-read this section and then put the strategy to the test. Section 4: Forex Lingo — This is a glossary of some important Forex-related words and phrases.. On the simplest level, Forex is the market in which currencies are traded.

When you trade the Forex you are essentially buying and selling money. The currency market used to only be the playground of central banks, large institutional banks, hedge funds, and international companies with a lot of money.

Now the average investor can gain access to this incredibly exciting market 24 hours a day 5 ½ days a week. All you need is a computer and Internet access. Pips are similar to ticks or points in the stock market. Here is where it gets really interesting Trading the Forex requires most traders to use leverage using margin to increase their potential return for small moves in the exchange rate.

then you can trade with as high as leverage. Traders who live outside of the U. can use as much as leverage this is not suggested. Also, unlike the stock market, there is no central market location. Trades are conducted through a lot of individual dealers or financial centers. Non-Correlated Price Movement: For the most part, currency prices are uncorrelated to the stock market. This means that if you are a stock trader who is long the stock market, you can benefit from fluctuating currency prices that are completely uncorrelated.

Fewer Rules: Unlike the trading of stocks, futures or options, currency trading does not take place on an exchange with rules like the NYSE or CME. In fact, if you had exclusive information, and it was used to make a lot of money, legal issues would not arise, like they would in the stock market. In other words there are no insider trading rules in the Forex.

No to low commissions: For the most part there are no exchange, brokerage or clearing fees in the Forex market. Instead, brokers make money on the difference in price you pay to buy, or the amount you receive when you sell, currencies, also known as the spread. If you are a night owl you can trade at 3 AM if you want to. Less Market Manipulation: Because the Forex market is so large there is less market manipulation, with the only real manipulation coming from the Central Banks.

This kind of manipulation is actually good because it creates large trends in the market. Buy and Sell With Ease: Unlike the stock market there is no uptick rule in Forex. This means that you can sell just as easily as you can buy. In other words you can make just as much if not more money by shorting a currency as you can by buying it.

I am not a tax specialist so make sure to consult your tax preparer to confirm that this will work for your situation. Historically A Trending Market: There has been no shortage of trends in the Global Currency Market since the end of the Nixon era gold standard.

Trends are where the money is made and the Forex market usually has at least big trends every year. Technical Traders Dream: Technical analysis tends to work very well for currency trading. This allows short-term traders to pull quick and precise profits from the market and long-term trend followers to profit along the way of the big trends. The beauty is that you can add to your account regularly and use the power of compounding to grow your wealth over time.

Understanding how to make money by trading Forex is pretty simple. In Forex, unlike stocks or futures, you are trading two countries rather than one stock or one instrument. Essentially you are betting that the value of one countries currency will go up or down rela- tive to the value of another countries currency.

Since currencies are traded in pairs, when you buy one currency you are simultaneously selling the other currency. If the AUD had decreased in value to the USD you would have lost money on the transac- tion instead of making a profit.

Forex trading, like any form of trading, is not without risk. Some may even suggest that trading in the Forex market actually carries above-average risk. There are two reasons for this: 1. No Central Exchange — While having no central exchange can be a benefit there is also a risk involved. The main risk from this comes from less regulation which means that some brokers are unscrupulous. That is why choosing the right broker is so important. Leverage — Leverage margin trading can be a double-edged sword.

When the new trader starts trading with leverage there will often notice right away that the dollars in their account generally stretch a lot farther. This can lead to two things: a. These are both things that can really decimate your account.

Trading with margin is no different than trading without it as long as you respect it and use it wisely. Trend following is a scientific and mechanical way to approach trading that removes most of the guesswork. It has a strong history of performance during crisis periods and is at the core of most of my trading methods. The idea behind the Continuation Method is to wait for a setback in the market and then jump in the direction of the trend.

We are using only technical analysis meaning that we are going to be looking at price charts for different currency pairs to make our decisions. Tools You Will Use 1. Its purpose is to tell whether a commodity or currency market is trading near the high or the low, or somewhere in between, of its recent trading range. We will use this in combination with a simple trend finding technique to determine the best possible entry during a correction in the trend.

The 50 Exponential Moving Average — EMA is a type of infinite impulse response filter that applies weighting factors, which decrease exponentially. The weighting for each older datum decreases exponentially, never reaching zero. This helps us to measure trend by taking all previous data into account. The 5 Simple Moving Average — The Simple Moving Average is the unweighted mean of the previous N data. We will use this as a way to exit the market and trail our stop loss to protect profits.

These indicators can be found in most charting software programs. Here is a screenshot showing how the chart looks with each of the indicators in place. Once you have installed the template for MT4 simply right click on any chart and select template. Then select the Continuation Method template. With this method you have the option of trading in multiple time frames.

Here is a breakdown for how to use the different time frames. End of Day Trading — This means you will look at the charts one time a day at the end of the day. You will be in trades for days. Charts to use: Weekly and Daily Charts — Confirm trend on the weekly and trade the daily.

Swing Trading — This means that you will look at the charts a few times a day and you will be in trades from days. Charts to use: Daily and 4-Hour Charts — Confirm trend on the daily and trade the 1-hour.

Intra-Day Trading — This means that you will look at the charts several times a day and you will be in trades from days. Rule 1: Find the trend on the higher time frame. If you are doing End of Day trading then you will be using the weekly and daily chart. The first thing you want to do is find the trend on the higher time frame chart weekly. The way you do this is very simple.

You look at the 50 EMA and count back ten bars and determine whether or not it was sloping up more over the last ten bars or if it was sloping down more over the last ten bars.

If the 50 EMA was is sloping up then the trend is up. If the 50 EMA is sloping down the trend is down. If the trend is up you can only take buy trades. If the trend is down you can only take sell trades.

After bar ten you can begin to look for buy trades on the Daily Chart. This leads to Rule 2. Rule 2: Move down to the lower time frame daily chart in this example and look for a pull back against the trend.

A pullback is identified by anytime a candle closes on the opposite side of the 50 EMA against the trend. The trend on the weekly chart turned up and the trend on the Daily chart is up as well. The next thing that you want to do is to look for a pull back against the trend. The way you identify this is very simple. If a candle closes below the 50 EMA while the trend is up then this is considered a pullback against the trend.

If a candle closes above the 50 EMA while the trend is down, then this is a pullback against the trend. This leads to Rule 3. In the case of this current example you can see an uptrend and you are looking to buy the market. Once it goes below the level you are now looking for it to rise back above the level. The green dotted line shows where you would place our entry and the red dotted line shows where you would place our stop loss.

Y would place a buy stop above the high of the signal candle or below the low for a sell. The stop loss will go below the low of the closest swing point in the opposite direction. A swing point is defined as a candle with a lower low than the previous candle and the following candle. Not every trade will be a winner. I wanted to show you a losing trade right off so that when you see all of the winners you will understand that losses will happen.

This is the very next trade that happens just a few days later. In this case you can see that the trade makes a tidy profit. Is the trend up in-line with the weekly chart? Do we have a pullback? In this example your pip risk is pips. That means the price must move pips in your favor before you can move your stop.

This enables you to dynamically follow the market as far as possible before cashing out and taking profits. This way you can let our winners run and cut your losses short. Once price reaches 1. Notice that price is above the 5 SMA at the point of the green line. Then abruptly it closes below the 5 SMA. The next day it closes below the 5 SMA again. At this point you move your stop to the lowest of the two closes as identified by the green dotted line. The following day price breaches the lowest of the two closes and you are stopped out of the trade with a profit of pips.

The end reward to risk ratio is 1. If a transaction is not made as the desired price is not met by the close of trading, the end of day order will be canceled. In this case the order will not be cancelled until it is filled or until you manually cancel it. Swing Trading: A short-term strategy used by traders to buy and sell a market whose technical indicators suggest an upward or downward trend in the near future -- generally one day to two weeks. If you want to spend even less time in a trade you can drop down to the 60 minute chart and do the exact same thing.

The key is trading in the direction of the trend and being precise on following the rules. you are trying to capture the big trades with this that earn you much more money than you risk.

Position Sizing Position sizing also known as money management is critical to your success as a Forex Trader. When trading the Forex you are using high leverage and position sizing becomes even more critical. Position size is the only real determining factor as to how much you will win and how much you will lose on a trade. I recommend using a fixed fractional position sizing method. You are ready to start this wonderful and potentially very profitable journey of Forex trading.

Swing trading is not as stressful and you will often have the levels you want to find and then enter your trades at pre-marked so you know when price moves into a level to look for a trade setup.

Because price is not breaking out and making explosive breakout moves, and is often moving over longer periods, you have more time to make your trading decisions and is a less stressful way to trade.

I have attached an example swing trade on the chart below. If price is in an uptrend you would look to identify where the next swing low is going to occur and where you would like to hunt for long trades. If price moved into this level you would be watching for bullish price action trigger signals to get long and for price to make its next swing higher for you to make profits. Swing trading can suit a wide variety of traders who are looking to make quality trades and enter into the next swing in the market.

If however, you are looking for a strategy that is fast paced, you are in and out of your trades quickly and you can make many trades in a short period, you may want to use another strategy.

I have an in-depth guide you can use to learn more about swing trading at; Swing Trading Price Action Quick Guide. A false break can be a very high probability trading setup when you have mastered it and play it at the best areas. The false break occurs when price looks to breakout of a support or resistance level, but then quickly snaps back in the other direction, false breaking a large portion of the market out. When the first breakout begins price is looking to breakout and through a support or resistance.

In this example we will say price is looking to breakout and through a resistance level. When price begins to breakout higher a large portion of the market begin to look for the resistance to break and will enter long trades, often setting their stop loss just on the other side of the resistance. When price begins to move back lower, the market participants who were long and looking for the resistance to break begin to get stopped out of their long trades.

As price gains momentum back lower more and more stops are eaten and price completes the false break. The false break trading strategy opens a lot of potential high probability trading opportunities for you because it can be used on many different markets, many time frames and can be used at the major support and resistance levels.

Once you have mastered false break trading it can be incredibly high probability. You will be looking to enter the market when the majority have been false broken in the wrong direction and you can often enter into explosive moves. You can also use this strategy on many markets and time frames with many triggers for entry. You can read an introduction guide to using the false break at; False Break Forex Trading Quick Guide. As a scalper you are looking to get in and out of your trades quickly and profit from smaller moves in the price action.

Whilst you are looking to make far smaller pip targets, you are looking to do it in far shorter amounts of time than other strategies. As a scalper you are capitalizing on the bigger markets volatility and quick price movements to make your profits. A swing trader is looking to enter trades on the 4 hour or daily charts and then hold those trades for hours or days. When scalping you are generally holding your trades for minutes at a time, depending on how small the time frame.

Some traders love scalping as it offers them more potential trading opportunities, they do not have to hold for extended periods and they can close their trades and finish for the session. Below I have included an example 5 minute chart showing price testing a key level and then forming a huge false break pin bar reversal to get short. You can learn how to scalp the market with price action and two simple strategies at; Price Action Scalping: Quick Guide. Scalping is not for everyone and is not for the faint of heart.

Whilst most traders start out on the smaller time frames and looking for as many trades as they can humanly find, this does NOT mean it suits them or that it is what they should be doing. If you are going to scalp trade you need to have every part of your trading style locked down and be ready for all market circumstances that will come your way.

This style of trading is normally carried out on the daily, weekly and monthly charts. As a position trader, you will often be trying to use the overall larger trend to gain the best positions and capture long running trades. The key to position trading is knowing how to cut your losses relatively soon, whilst maximizing the times you make large running winners. This will often involve pyramiding into your winning positions adding further positions as price moves in your favor.

The best markets for position traders are the clearly trending markets where price is making a clear move in one direction. The weekly chart example I have added below shows an obvious trend higher that is perfect for a position trader.

This is the type of market that is making regular higher highs and higher lows. This gives the position trader a chance to not only add to their position, but use the swing points as areas to move their stop as a trail to lock in profits as the market moves. Each trading strategy and style comes with its pros and cons. Some strategies you simply will not be able to use either because they don't suit your time frame and lifestyle or because they are not suited to your personality.

To see what Forex trading strategies suit you best, a nswer these three questions;. You need to think about how much time you have to first learn the strategy and then implement it.

If you only have a few minutes each day to monitor the markets, then scalping is not going to be suitable for you at all as you simply will not have the time to make the trades. You could look at position trading or swing trading. You also need to think about how much time you are willing or able to invest in learning your chosen strategy. You may be a trader who wants to be in the markets, making trades and who is happy to stare at your screen for hours on end.

Or, you may want to use trading to make money, but not spend all of your time watching screens and monitoring every pip movement. Every trader is different and this is something you need to take into account when you choose your strategy. Don't choose a strategy that will have you watching every pip movement if you are far more suited to making a trade, setting your stop and profit orders and then coming back later.

Are you trying to create a lifestyle with more free time, possibly more time with your family and choosing what you do and when? Or, are you trying to make as much money as possible and are happy to spend all of your time in the markets day in and day out? Most traders come to trading for money and lifestyle. When choosing your strategy, think about what you are trying to set up and achieve with your trading.

Yes, there is a lot to learn, and there are a lot of other Forex trading strategies such as breakout trading, price flip trading and trend or momentum trading, but you only need to start with one strategy.

Find the one strategy that suits you the best, practice the heck out of it on your demo and then become profitable with it. Once you have become profitable with your first strategy you can add more and more. After becoming profitable and successful learning the first strategy, adding the second, third and fourth becomes a lot quicker as you are using the same base methods.

Let me know your thoughts on this lesson and any questions in comments section below;. Johnathon is a Forex and Futures trader with over ten years trading experience who also acts as a mentor and coach to thousands and has written for some of the biggest finance and trading sites in the world.

How do I connect with you. Please I want you to be my mentor. I will like to have more lessons on price action and price movements , and a further information about candlesticks formation.

Dear Sir , this article is full of knowledge ,thank you very much , I think I like swing trading and false break strategies , wonder what you currently using.

I use all the strategies in this lesson except for position trading because the cons I mention do not suit my style. Your email address will not be published. Forex Trading for Beginners.

I know that it can be incredibly time-consuming, frustrating and just annoying researching Forex trading strategies and different trading styles. The huge problem is that it is often hard to know if you should use a strategy, if that strategy suits you and your lifestyle, and if it is worth your precious time learning and trading with it.

These are all pretty important to know before you begin devoting your time to learning, trading and mastering them. A quick note before you go through them; I highly recommend you find one strategy that you like, suits you best and your lifestyle and personality.

Master the heck out of that one strategy first and become profitable with it. It is far faster to learn, master and become profitable with one strategy, than trying to learn a whole bunch at the same time. You can always add more and more strategies when you are profitable, but profits are the key. Swing trading is looking to profit from the next swing the markets make. As a swing trader you will often be using the higher time frames such as the 4 hour and daily charts and looking to capture large market swings and moves.

You are looking to profit from larger swings. When breakout trading you are looking for really fast price movement and to profit from explosive breaks of important support and resistance levels.

If you miss crucial moments, it will often mean you miss the trading opportunity you were waiting for. Swing trading is not as stressful and you will often have the levels you want to find and then enter your trades at pre-marked so you know when price moves into a level to look for a trade setup. Because price is not breaking out and making explosive breakout moves, and is often moving over longer periods, you have more time to make your trading decisions and is a less stressful way to trade.

I have attached an example swing trade on the chart below. If price is in an uptrend you would look to identify where the next swing low is going to occur and where you would like to hunt for long trades. If price moved into this level you would be watching for bullish price action trigger signals to get long and for price to make its next swing higher for you to make profits.

Swing trading can suit a wide variety of traders who are looking to make quality trades and enter into the next swing in the market. If however, you are looking for a strategy that is fast paced, you are in and out of your trades quickly and you can make many trades in a short period, you may want to use another strategy.

I have an in-depth guide you can use to learn more about swing trading at; Swing Trading Price Action Quick Guide. A false break can be a very high probability trading setup when you have mastered it and play it at the best areas.

The false break occurs when price looks to breakout of a support or resistance level, but then quickly snaps back in the other direction, false breaking a large portion of the market out. When the first breakout begins price is looking to breakout and through a support or resistance. In this example we will say price is looking to breakout and through a resistance level. When price begins to breakout higher a large portion of the market begin to look for the resistance to break and will enter long trades, often setting their stop loss just on the other side of the resistance.

When price begins to move back lower, the market participants who were long and looking for the resistance to break begin to get stopped out of their long trades. As price gains momentum back lower more and more stops are eaten and price completes the false break. The false break trading strategy opens a lot of potential high probability trading opportunities for you because it can be used on many different markets, many time frames and can be used at the major support and resistance levels.

Once you have mastered false break trading it can be incredibly high probability. You will be looking to enter the market when the majority have been false broken in the wrong direction and you can often enter into explosive moves. You can also use this strategy on many markets and time frames with many triggers for entry. You can read an introduction guide to using the false break at; False Break Forex Trading Quick Guide. As a scalper you are looking to get in and out of your trades quickly and profit from smaller moves in the price action.

Whilst you are looking to make far smaller pip targets, you are looking to do it in far shorter amounts of time than other strategies. As a scalper you are capitalizing on the bigger markets volatility and quick price movements to make your profits. A swing trader is looking to enter trades on the 4 hour or daily charts and then hold those trades for hours or days. When scalping you are generally holding your trades for minutes at a time, depending on how small the time frame.

Some traders love scalping as it offers them more potential trading opportunities, they do not have to hold for extended periods and they can close their trades and finish for the session. Below I have included an example 5 minute chart showing price testing a key level and then forming a huge false break pin bar reversal to get short.

You can learn how to scalp the market with price action and two simple strategies at; Price Action Scalping: Quick Guide. Scalping is not for everyone and is not for the faint of heart. Whilst most traders start out on the smaller time frames and looking for as many trades as they can humanly find, this does NOT mean it suits them or that it is what they should be doing.

If you are going to scalp trade you need to have every part of your trading style locked down and be ready for all market circumstances that will come your way. This style of trading is normally carried out on the daily, weekly and monthly charts. As a position trader, you will often be trying to use the overall larger trend to gain the best positions and capture long running trades. The key to position trading is knowing how to cut your losses relatively soon, whilst maximizing the times you make large running winners.

This will often involve pyramiding into your winning positions adding further positions as price moves in your favor. The best markets for position traders are the clearly trending markets where price is making a clear move in one direction.

The weekly chart example I have added below shows an obvious trend higher that is perfect for a position trader. This is the type of market that is making regular higher highs and higher lows. This gives the position trader a chance to not only add to their position, but use the swing points as areas to move their stop as a trail to lock in profits as the market moves.

Each trading strategy and style comes with its pros and cons. Some strategies you simply will not be able to use either because they don't suit your time frame and lifestyle or because they are not suited to your personality. To see what Forex trading strategies suit you best, a nswer these three questions;.

You need to think about how much time you have to first learn the strategy and then implement it. If you only have a few minutes each day to monitor the markets, then scalping is not going to be suitable for you at all as you simply will not have the time to make the trades.

You could look at position trading or swing trading. You also need to think about how much time you are willing or able to invest in learning your chosen strategy. You may be a trader who wants to be in the markets, making trades and who is happy to stare at your screen for hours on end. Or, you may want to use trading to make money, but not spend all of your time watching screens and monitoring every pip movement.

Every trader is different and this is something you need to take into account when you choose your strategy. Don't choose a strategy that will have you watching every pip movement if you are far more suited to making a trade, setting your stop and profit orders and then coming back later. Are you trying to create a lifestyle with more free time, possibly more time with your family and choosing what you do and when?

Or, are you trying to make as much money as possible and are happy to spend all of your time in the markets day in and day out? Most traders come to trading for money and lifestyle. When choosing your strategy, think about what you are trying to set up and achieve with your trading. Yes, there is a lot to learn, and there are a lot of other Forex trading strategies such as breakout trading, price flip trading and trend or momentum trading, but you only need to start with one strategy.

Find the one strategy that suits you the best, practice the heck out of it on your demo and then become profitable with it. Once you have become profitable with your first strategy you can add more and more. After becoming profitable and successful learning the first strategy, adding the second, third and fourth becomes a lot quicker as you are using the same base methods. Let me know your thoughts on this lesson and any questions in comments section below;.

Johnathon is a Forex and Futures trader with over ten years trading experience who also acts as a mentor and coach to thousands and has written for some of the biggest finance and trading sites in the world.

How do I connect with you. Please I want you to be my mentor. I will like to have more lessons on price action and price movements , and a further information about candlesticks formation. Dear Sir , this article is full of knowledge ,thank you very much , I think I like swing trading and false break strategies , wonder what you currently using. I use all the strategies in this lesson except for position trading because the cons I mention do not suit my style.

Your email address will not be published. Forex Trading for Beginners. Price Action Trading. Forex Charts. Forex Trading Strategies.

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This aspect of OTC shifts the odds of success against individual traders, especially if the forex broker acts as a market maker. The ability to use multiple timeframes for analysis makes price action trading popular with many traders. edu no longer supports Internet Explorer. In reality, prices do not always go higher in an uptrend, but still tend to bounce off areas of support, just like prices do not always make lower lows in a downtrend, but still tend to bounce off areas of resistance. Who this book is for This book is primarily for those who are new to the world of currency trading and are curious about how they can make money from the forex market.

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