News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
More View more
Real Time News
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/kuqShllQFp
  • Although the longer-term technical outlook for AUD remains skewed to the topside, recent developments suggest the commodity-sensitive currency could lose ground against USD and JPY. Get your market update from @DanielGMoss here: https://t.co/Rl1h8WdXwp https://t.co/49RKx86FzG
  • ECB policymakers were out in force last week, saying they were watching Eurozone government bond yields, but yields rose anyway, and that’s positive for $EURUSD and the Euro crosses. Get your market update from @MartinSEssex here: https://t.co/nJdh9dA1HM https://t.co/peLh7zTTiz
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/vs7ypHHwya
  • The GBP rally vs USD came to an abrupt end and reversal; this sets cable up for more selling in the week ahead. Get your market update from @PaulRobinsonFX here: https://t.co/Ee9PSppnd2 https://t.co/uaiCiEHBMs
  • What are some trading takeaways from 2020, as we jump into the new year? Find out with your free guide here: https://t.co/e7udCTJlmf #DailyfxGuides https://t.co/OXUgYIl2ru
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/xncree8XaW
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/gGOU1RVQzq
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/wrI29FTN41
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9Flsqcxo9 https://t.co/UzzC1bGzRJ
DailyFX Forex Trading Course Walkthrough: Part Six

DailyFX Forex Trading Course Walkthrough: Part Six

James Stanley, Senior Strategist

Forex Trading Course Walkthrough Talking Points:

  • This is the sixth of a ten-part series in which we walk through articles from DailyFX Education.
  • The aim of this series is simplicity while addressing some of the more important aspects of the FX market along with traders’ strategies and approaches.
  • If you would like to access the full suite of educational articles offered by DailyFX Education, you can get started with the beginner section at this link: DailyFX Forex for Beginners
Advertisement

Over the last two lessons we’ve had a considerable focus on fundamental analysis, first by looking at some of the key players and then by looking at some of the key events.

Now we’re moving into my favorite aspect of analysis, and that’s the chart.

Fundamental analysis is what helps to shape the future. Stronger growth in an economy will often bring on higher levels of inflation. Those higher levels of inflation demand higher interest rates to prevent instability, and accordingly central banks often look to raise rates. The premise of rates going higher, as we learned in the carry trade strategy, can bring more buyers into a market to capture those new higher rates which can in turn create higher demand that leads to higher prices and an upward trend.

It’s an ideal scenario when it works, especially when prices begin moving higher because that is where the opportunity lies for traders.

While fundamentals help to shape the future, technical analysis helps to explain the past. It’s an examination of the chart, and what’s happened recently, to devise what might happen in the future. This is an important point because many new traders learn one indicator and then walk away saying ‘this doesn’t work!’

Remember this: Technical analysis is simply a way of analyzing a market. Whether or not it ‘works’ is more dependent on who is employing the analytical approach. Many professionals see technical analysis as pertinent to risk management, as a way to voice those opinions on the fundamental juxtaposition of an economy at a point in time. It is simply an additional tool that traders can use to try to get the odds on their side.

It is important to note that the past does not predict the future. New things happen, and markets, like life, remains unpredictable. This is a good thing! This is what makes life interesting and fun, and sometimes hard, just like trading. To get started, navigate to our Basics of Technical Analysis article, which covers the big picture behind this wide field of analysis.

The Basics of Technical Analysis

After a new trader learns some basic technical analysis, the next question is often ‘what’s the best time frame?’ There isn’t one. Time frames are simply a different way of looking at the same thing and, like many other purchasing decisions, traders should try to get varying vantage points before making a decision. This brings up the topic of ‘multiple time frame analysis,’ which basically means systematizing the charts to be used in the trader’s strategy in order to find a comfortable balance. To get started, we suggest first reading our introductory article on the topic linked below:

The Time Frames of Forex, a Beginners Guide

And after that, you can navigate to the below article to gain a little more depth on the topic:

A Guide to Multiple Time Frame Analysis

Real World Application

To put this to use you’re going to need a chart, and a demo account with a charting package. Try out a daily chart to grade trends and the four-hour chart to appropriate entry. Attempt to find a trend on the daily chart, and then use the four-hour chart to enter a position in the direction of that trend. From the four-hour chart, you can use some subjectivity in that entry, attempting to ‘buy low, sell high’ while still adhering to the longer-term trend.

Click here to request a free demo with IG group.

Attempt to set up five trades on the demo account in this manner.

--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES