A thorough Forex trading education must include an understanding of the effect market timings can have on trading and liquidity.
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
Add London open analysis to your Forex trading education and see if you can recognize good setups from the lively market conditions.
The following questionnaire and checklist will help.
London Open Preparation
Check these points about fifteen minutes to half an hour before the London market opens:
MACD indicators on the 4 hour and 1 hour charts - if they are not going in the same direction exercise great caution!
Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.
Looking at the four hour chart, ask yourself, what is the overall trend?
Use your Fibonacci tool on the last swing high or low and see if price is approaching a key level, either a retracement or an extension.
Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)
Are any fundamental announcements due?
Taking note of the candle that closes the first 15 minutes after London open, is it part of a distinctive candle pattern or is the candle itself a hammer, doji, or other shape which indicates price may be about to go in the other direction?
What would my risk be and where would I place my stop if I entered a trade right now in a particular direction?
If, shortly after London opens, you see a number of these signs drawn from the analysis questions given above, take note and decide whether there is a good trading opportunity. Either:
trade
wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.
There is no magic surrounding Forex education. It takes years of hard work and practice, study and more practice, and of course, experience which often comes through trades going wrong!
At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times - the hardest and most important aspect of Forex trading education.
A procedure like the one outlined above, practiced day in and day out, will help the newer trader make good progress. It won't be too long before the trader experiences the satisfaction of consistent profits on a regular basis. - 23210
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
Add London open analysis to your Forex trading education and see if you can recognize good setups from the lively market conditions.
The following questionnaire and checklist will help.
London Open Preparation
Check these points about fifteen minutes to half an hour before the London market opens:
MACD indicators on the 4 hour and 1 hour charts - if they are not going in the same direction exercise great caution!
Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.
Looking at the four hour chart, ask yourself, what is the overall trend?
Use your Fibonacci tool on the last swing high or low and see if price is approaching a key level, either a retracement or an extension.
Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)
Are any fundamental announcements due?
Taking note of the candle that closes the first 15 minutes after London open, is it part of a distinctive candle pattern or is the candle itself a hammer, doji, or other shape which indicates price may be about to go in the other direction?
What would my risk be and where would I place my stop if I entered a trade right now in a particular direction?
If, shortly after London opens, you see a number of these signs drawn from the analysis questions given above, take note and decide whether there is a good trading opportunity. Either:
trade
wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.
There is no magic surrounding Forex education. It takes years of hard work and practice, study and more practice, and of course, experience which often comes through trades going wrong!
At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times - the hardest and most important aspect of Forex trading education.
A procedure like the one outlined above, practiced day in and day out, will help the newer trader make good progress. It won't be too long before the trader experiences the satisfaction of consistent profits on a regular basis. - 23210
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For a free candle & chart pattern recognition reference tool click here: Candle Charting See how to use trendlines to get an optimum trade entry point: Trendline Break
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