Make Money on FOREX ECOURSE ACADEMY: BINARY OPTIONS SIGNALS; STRATEGIES DEVELOPMENT | FREE TRIAL

Make Money on FOREX ECOURSE ACADEMY: BINARY OPTIONS SIGNALS; STRATEGIES DEVELOPMENT | FREE TRIAL


you principles of the Forex beginner
strategy in this video you will learn principles
and ideas behind the forex trading beginner strategy what fractals are and
how they’re formed what pivot points are and why they work why using multiple
time frame analysis will benefit your profitability
as with other skill sets you learn in life you learn through experience forex
trading is no different the Forex beginner strategy teaches you the basics
of reading price charts and is a great entry point into how to trade at trader
mo we have taught you what to look for on a chart and what action to take when
trading the beginner strategy however we have not gone into why you should use
certain indicators or take certain steps when looking for a trade setup
in this video we will explain the principles and ideas behind the Forex
begin a strategy to give you an in-depth understanding of how it all works the
first indicator and one we use very often in the beginner strategy is the
fractal this is a simple triangle shaped indicator that signals a potential
market reversal a fractal is made up of five candles and appears on your chart
after a certain type of price action has occurred in the market indicating that a
reversal is likely there are two types of fractals an up fractal and a down
fractal let us first look at the formation of an up fractal and what
needs to happen for one to form looking at the example you can see the two
candles where price made two highs this is caused by the buyers or Bulls making
two attempts at pushing prices up on the third candle the Bulls made a bigger
attempt to push price up again making a higher high on the fourth and fifth
candle notice that the Bulls have been overpowered by the Bears and were unable
to take out the third candles high this pattern is common and signals that the
sellers are in control and so it is likely that the price will reverse to
the downside when it forms your trading software will plot a fractal above the
highest high let us now look at the formation of a down fractal which is the
inverse of the up fractal you can see the two candles where price made two
lows this is caused by the sellers or bears making two attempts at pushing
prices down on the third candle the Bears made a bigger attempt to push
price down again making a lower low on the fourth and fifth candle notice that
the Bears have been overpowered by the Bulls and were unable to take out the
third candles low this signals that the buyers are in control and so it is
likely that the price will reverse to the upside when it forms your trading
software will plot a fractal below the lowest low
it is important to take caution when training on some platforms such as
metatrader4 as the Franco indicator will be plotted on the chart after the fourth
candle of the pattern has completed it does not wait for the fifth and final
candle to close first but rather alert you to the fact the pattern is
potentially forming however because the pattern is not complete you will need to
be patient and wait for the last candle to close to make sure that the fractal
does not disappear looking at the example of a damn fractal
when it completes it potentially means that a reversal could happen meaning
that the Bears have attempted to drive price down but the Bulls have been
strong enough to keep price up due to this many traders take on new long
positions this is logical because price behavior has shown that a reversal to
the upside is likely once those traders have placed new buy orders they will
play stop-loss orders to protect themselves in the event that the market
does not move in their direction a logical place for a stop-loss order
would be below the fractal and the lows of the candles it is important to note
that when you enter a long position in the market and place a stop-loss your
stop-loss is actually a sell order it closes your position by selling the
asset that you bought so if price broke lower triggering the stop losses price
would move considerably lower because it is under further selling pressure and so
price is likely to fall we wait for the fractal to be broken
because the fractal itself provides a strong signal that the market may
reverse but a broken fractal gives an even stronger signal that the market
will continue this is why we use broken fractals to determine the market
direction and to enter into the market the second indicator we use in the
beginner strategy our daily pivot points these are levels that have been
calculated from the previous day’s price action they are used by many traders
including banks and financial institutions to enter and exit the forex
markets there are different mathematical
calculations to work out the pivot points but the basic calculation uses
the previous day’s highest price lowest price and closing price in the
calculation this gives you an average of the most significant prices from the
previous training day this average price or level is called the main pivot or
daily pivot if price is trading above this level it would be considered that
there are more bulls in the market conversely if price is trading below
this level it would be considered that there are more bears in the market this
main pivot is the point at which the market pivots around hence where the
name comes from if price reaches the pivot point from below bears are likely
to push price down and when price reaches it from above Bulls are likely
to come in and push the price back up note that sellers and buyers can push
price above and below the daily pivot point respectively however it generally
acts as a floor or a ceiling at which price is likely to stop once the price
has reached it the other pivot points are r1 r2 r3 + s1
s2 and s3 and the mid pivots labeled as m1 m2 etc all pivots are calculated
using the daily pivot when the price reaches these pivot
points traders are likely to sell if the prices reached it from below or by if
the price has reached it from above looking at an uptrend price is likely to
react around the pivot point levels because traders are selling or closing
their buy positions in this example the main pivot point acts as support
stopping price from moving any lower when the price continues up to the next
pivot level m3 notice how the price seems to stop and struggles to move
higher this shows that for a period of time the Bears were entering the market
at this level when the price eventually breaks up again and continues on to the
next pivot point our one price stalls once again as buyers closed their
positions and sellers open new positions as a trader if you know that the
majority of traders are using pivot points to decide on where to enter or
exit positions then you know that the price is more likely to not go any
further when the pivot point is reached you also know that traders are more
likely to wait until price reaches that price level before they place a trade
for these reasons pivot points make very good profit targets
the Forex begin a strategy uses the principle of multiple time frame
analysis due to the benefits of reducing risk and maximizing probability when
trading as a trader understanding what the bigger picture is doing can help you
make accurate decisions when looking for trading opportunities on the lower
timeframes if there is a trend on a higher time frame trading in the
direction of that trend on the lower time frame will likely produce higher
probability trades in the long term that is the same principle behind using
multiple time frame analysis when trading the beginner strategy when you
analyze the 30-minute time frame you are analyzing the larger picture observing
price action over a few days however it is not always easy to decide which way
the market is moving which is why we have simplified things and use fractals
these give a very clear indication of which way price is moving when the
fractal is broken looking at the first chart you can see
that the 30-minute trend is up confirmed by the broken up fractal if we now soon
down to the five-minute chart known as the smaller time frame we can
look for more precise entries in alignment with the larger trend remember
trades taken in alignment with the larger picture have a higher probability
of working out when moving down to the five minute time
frame you will notice that the chart covers far less data than you would find
on the 30-minute time frame you will also notice that the candles normally
move less in pip value on the five-minute chart than they do on a
30-minute chart when trading the beginner strategy following the rules of
stop placement you place your stop loss at the tip of the five-minute up fractal
in a short trade because the candles on a five-minute chart will be smaller in
comparison to the 30-minute chart the stop loss on a five-minute chart will be
closer to the entry than it would be if you entered using the 30-minute chart
alone and place the stop loss on the 30-minute chart as such you have reduced
the risk of entry on the lower time frame however you are trading in the
direction of the overall market trend and so you have combined the benefits
that both timeframes offer so far you have learned that we wait for
a fractal to be broken because a fractal provides a strong signal that the market
may reverse this is why we use broken fractals to determine the market
direction and to enter into the market pivot points are calculated using the
previous day’s price action and are used by many traders including banks and
financial institutions to enter and exit the forex markets if you know that the
majority of traders are using pivot points to decide on where to enter or
exit positions then you know that price is more likely to not go any further
when the pivot point is reached using multiple time frame analysis helps
reduce risk and maximize probability when trading following the trend on a
higher time frame trading in the direction of that trend on the lower
time frame will likely produce higher probability trades in the long term a
stop loss and a 5 minute chart will be closer to the entry than it would be if
you entered using the 30 minute chart alone allowing you to reduce your stop
size

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