As many of you already know, Forex is the most amazing and popular electronic financial market: it moves 1.5 trillion dollars a day, what NY Stocks market moves in a year. A 24 hours a day, 7 days a week market, with high volatility and liquidity, and with a plus advantage: leverage. A market where you can choose to go bull or bear with no cost: no extra premiums to pay, no additional options. It seems pretty much convenient, right?
Well, let me tell you the disadvantages before I continue: high volatility, liquidity, leverage. Yes, just the same: advantages are disadvantages too. All these things can play against you as well as in your favor, with an extra: Brokers. Most retail traders must use a broker, who will be the counterpart in all transactions as there is no way to directly deal in the interbank market. And, as brokers are market makers, they can widen spread, or even refuse to trade during particular moments or conditions.
So, why are we here? What makes Forex so attractive? Where is the DIFFERENCE? A non written rule says only 10 % of Forex traders are successful, against the 90 % who blow their accounts. Believe it or not, the “90 % losers†trade without using technical analysis, without a working plan, without nothing but the ambition to become rich in the short term. Most Forex traders trade by impulse following a hunch more than a trend. Using guts instead of indicators or oscillators.
A simple and effective way to start with technical Forex trading is using Moving Averages: a Moving Average (MA) is a trend direction indicator that calculates a simple arithmetic average of prices for a particular period, showing the average value of the price of a currency over a set of values.There are different types of MA: we use SMA for simple moving averages and EMA for exponential ones. There are others kinds of MA (smoothed, linear weighted, etc) but we will limit this short study to the firsts ones, as they are the most used. Read More
REPORT: How to Use Multiple Moving Averages: Trading with Heikin-Ashi Charts - Christian Kaemmerer
REPORT: Is Average or Below Average Performance Your Trading Problem? - Sam Seiden
VIDEO: How to profitably trade using moving averages - Rob Colville
VIDEO: Moving Averages - Carol Harmer
VIDEO: Using Moving Averages in Trading - Dean Malone
Well, let me tell you the disadvantages before I continue: high volatility, liquidity, leverage. Yes, just the same: advantages are disadvantages too. All these things can play against you as well as in your favor, with an extra: Brokers. Most retail traders must use a broker, who will be the counterpart in all transactions as there is no way to directly deal in the interbank market. And, as brokers are market makers, they can widen spread, or even refuse to trade during particular moments or conditions.
So, why are we here? What makes Forex so attractive? Where is the DIFFERENCE? A non written rule says only 10 % of Forex traders are successful, against the 90 % who blow their accounts. Believe it or not, the “90 % losers†trade without using technical analysis, without a working plan, without nothing but the ambition to become rich in the short term. Most Forex traders trade by impulse following a hunch more than a trend. Using guts instead of indicators or oscillators.
A simple and effective way to start with technical Forex trading is using Moving Averages: a Moving Average (MA) is a trend direction indicator that calculates a simple arithmetic average of prices for a particular period, showing the average value of the price of a currency over a set of values.There are different types of MA: we use SMA for simple moving averages and EMA for exponential ones. There are others kinds of MA (smoothed, linear weighted, etc) but we will limit this short study to the firsts ones, as they are the most used. Read More
Do you want to learn more?
REPORT: A Practical Guide to Moving Averages - S.A GhafariREPORT: How to Use Multiple Moving Averages: Trading with Heikin-Ashi Charts - Christian Kaemmerer
REPORT: Is Average or Below Average Performance Your Trading Problem? - Sam Seiden
VIDEO: How to profitably trade using moving averages - Rob Colville
VIDEO: Moving Averages - Carol Harmer
VIDEO: Using Moving Averages in Trading - Dean Malone
Editors’ Picks
EUR/USD hits two-day highs near 1.1820
EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.
GBP/USD reclaims 1.3600 and above
GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.
USD/JPY drops back below 157.00, as focus shifts to Japan snap election
USD/JPY is back in the red below 157.00 in the Asian session on Friday. The Japanese Yen recovers ground against the US Dollar amid some profit-taking ahead of Japan's snap general election on Sunday. The preliminary reading of the Michigan Consumer Sentiment Index report for February will be released later on Friday.
Editors’ Picks
EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates Premium
The EUR/USD pair lost additional ground in the first week of February, settling at around 1.1820. The reversal lost momentum after the pair peaked at 1.2082 in January, its highest since mid-2021.
Gold: Volatility persists in commodity space Premium
After losing more than 8% to end the previous week, Gold (XAU/USD) remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000.
GBP/USD: Pound Sterling tests key support ahead of a big week Premium
The Pound Sterling (GBP) changed course against the US Dollar (USD), with GBP/USD giving up nearly 200 pips in a dramatic correction.
Bitcoin: The worst may be behind us
Bitcoin (BTC) price recovers slightly, trading at $65,000 at the time of writing on Friday, after reaching a low of $60,000 during the early Asian trading session. The Crypto King remained under pressure so far this week, posting three consecutive weeks of losses exceeding 30%.
Three scenarios for Japanese Yen ahead of snap election Premium
The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.
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