RSS
Tools
Apr 3
2.5 Ten Laws Of Technical Trading

The very popular author, columnist, and speaker on technical analysis’ is John Murphy. His ten laws of technical trading guide is available for those who are new to the field of charting in forex trading My advise is to print this page and use it as a reference guide for forex trading. If you find it useful then subscribe to John’s Market Message Service.
Where is the forex trading market heading? How high or low will it go? When will it go in opposite direction.? These are key matters of the technical analyst in forex trading.
There are certain basic concepts that apply to the theories employed by technical analyst in today’s forex trading behind charts, graphs and mathematical formulas that are used to analyze forex trading market trends.
The ten most vital rules of technical trading are as following:
1.Trend mapping
2.Identify the trend and follow
3.To find out the low and high of trend
4.Understand How far to backtrack
5.Draw the line
6.Track That Average
7.Study the Turns
8.Be acquainted with the Warning Signs
9.Trend or Not a Trend
10.Be acquainted with the Confirming Signs
1. Mapping Trends:
First study long term forex trading charts, then begin your analysis with a monthly and weekly forex trading charts .After that start forex trading charts study the ones that consists of years. A large scale map shows a wider picture of the long term view point on the forex trading market. Once you establish long term go for the daily and intra-day forex trading charts. A short term forex trading market view can frequently deceive you. If you only trade the very short term, chances are that you will do well if your forex trading is in the same direction as the intermediary and long term trends in forex trading.
2. Identify the trend and follow:
Determine your forex trading trend and follow it. Forex trading market trends are in many sizes, such as long term, intermediate term and short term. Decide which one you are going to do for forex trading and use the most suitable forex trading chart. You have to make sure that the direction of your forex trading is towards that trend. In case of, up buy dips. Sell rallies in case, the trend is down. In case ,of, intermediate trend, daily and weekly charts is the most appropriate way. In case of, day forex trading, daily and intra day charts to be used. In each case, permit the long kind of forex trading charts define the trend, and then use the shorter term forex trading chart for time.
3.To find out the low and high of trend:
Find the support and resistance levels. Support levels is the best place to buy forex trading market. That support is normally a former reaction low. Near resistance levels is the best place to sell forex trading market. Once a resistance maximum point has been broken, it will regularly provide support on following pullbacks. To explain it in other words, the old “high” becomes the new “low”. Same as, when a support level has been broken, it will normally create selling on following rallies, the old “low” can become new “high”.
4.Understand How far to backtrack:
How to measure percentage retracements. Up or down forex trading market corrections normally review a substantial part of the former forex trading trend. You can calculate the corrections in current trend in uncomplicated percentages. A fifty percent retracement (price movement in opposite direction) of an earlier forex trading trend is usual. Usually a minimum retracement is one third of the earlier trend. Usually maximum retracement is normally two thirds. Fibonacci retracements of 38% and 62% are also interesting to watch.
5.Draw the line:
Drawing the forex trading trend lines is simple and effective charting tools. All you need is guide for drawing straight line and two points on the chart consists of up trend lines drawn along two successive lows, down trend lines are drawn along two consecutive peaks. Forex trading prices will every so often pull back to trend lines before recommencing their trend. The break in trend lines usually indicates a change in trend. A line which touched three times is a valid trend line. The longer a trend line has been in effect the more times it has been tested, the more significant it becomes.
6.Track That Average:
Tracking moving averages. Moving averages provide objective buy and sell indicators. They inform you that if current forex trading trend is still moving and help verify a forex trading trend alter. Moving average do not inform you beforehand, on the other hand, a trend alter is about to happen. A combination chart of two moving averages is the most appropriate way to find forex trading indicators. Some well known futures forex trading market combinations are 4- and 9- day moving averages, 9- and 18- day, 5- and 20-day. Indicated whenever the shorter average line intersects the longer. Forex trading price overpass above and below a 40 day moving average also provide good forex trading indicators. As moving average chart lines are trend following indicators, they are at best in a trending forex trading market.
7. Study the Turns:
To learn the turns always track oscillators. Oscillators help us to identify the over bought as well as oversold forex trading market. While moving average offer validation of a forex trading market trend alteration., oscillators frequently warn us in time that a forex trading market has rallied or fallen too far and will soon turn. The two well known are the Relative Strength Index RSI and Stochastics. Work on scale 0 to 100. RSI, reading over 70 are over bought ( inflated in price) while reading below 30 are (unreasonably low in price ) 80 and 20 are Stochastics overbought and over sold values. For Stochastics 14 days or weeks and 9 or 14 days for weeks for RSI Oscillators deviations frequently warns of forex trading market turns. Such tools work well in a forex trading market range. Weekly indicators can be used as filters on daily indicators. Every day indicators can also be used as filters for intra day forex trading charts.
8. Be acquainted with the Warning Signs:
Gerald Appel developed a MACD The Moving Average Convergence Divergence indicator. In forex treading It unites a moving average crossover system with overbought and over sold elements of an oscillator. Indicates buy when the fast moving line intersects below the slow moving line above the zero line. Weekly forex trading market indicators have priority over daily indicators. AN MACD histogram outline the difference between the two lines and gives even prior warning of trend fluctuations. The vertical bars used in showing the difference between the two lines on the chart is called “histogram”
9. Trend or Not a Trend:
The line that helps determine whether a forex trading market is in a trending or a forex trading phase, this very line is called ADX. ADX line measures the magnitude of trend or way in the forex trading market. Presence of strong trend is indicated by a rising ADX line. Presence of a forex trading market and the absence of a forex trading trend is indicated by a falling ADX line. Moving averages favors a rising ADX line, oscillators favors a falling ADX line. What is suitable for the existing forex trading market environment is determined by plotting the direction of the ADX line.
10. Be acquainted with the Confirming Signs:
Volume and open interest are significant validating indicators in futures forex trading markets. Volume pave the way for forex trading market price. It is very important to understand that heavier volume of forex trading market is going towards the dominant forex trading trend. In an uptrend in forex trading market heavier volume should be seen on up days. Increasing open interest makes sure that new money is supporting the dominant forex trading trend. Declining open interest is mostly a warning that the trend is near conclusion. A solid price uptrend should go along with rising volume and rising open interest.
In Forex trading market technical analysis is a useful skill that nourishes with knowledge and experience. Remain a student of forex trading market technical analysis and you will always learn.
Definitions:
An accurate and constant relationship between Hindi-Arabic numbers in order was rediscovered by a thirteenth century mathematician Leonardo Fibonacci. (1,1,2,3,5,8,13,21,34,55,89,144,etc. to infinity) The total of any two successive numbers in this order equals the next higher number. After first four, the ratio of any number in the order to its next higher number move toward 618. The ancient Greek and Egyptian mathematicians were well aware of that radio, as the “Golden Mean” which had significant relevance in art, architecture and in nature.
In an article which was published in 1984 by George Lane is Stochastics - an oscillator. Based on study and experience that when prices rise then closing forex trading prices incline to be closer to the upper end of the forex trading price reach, on the other hand, in down trends, closing forex trading prices tend to be near the lower end of the range. Stochastics has somewhat larger overbought and oversold limits than the RSI and is still a more unpredictable indicator. The term ?schochastic? mentions the location of an existing futures forex trading market price is relative to its span over a set phase of time (usually 14 days).

The very popular author, columnist, and speaker on technical analysis’ is John Murphy. His ten laws of technical trading guide is available for those who are new to the field of charting in forex trading My advise is to print this page and use it as a reference guide for forex trading. If you find it useful then subscribe to John’s Market Message Service.

Where is the forex trading market heading? How high or low will it go? When will it go in opposite direction.? These are key matters of the technical analyst in forex trading.

There are certain basic concepts that apply to the theories employed by technical analyst in today’s forex trading behind charts, graphs and mathematical formulas that are used to analyze forex trading market trends.

The ten most vital rules of technical trading are as following:

1.Trend mapping

2.Identify the trend and follow

3.To find out the low and high of trend

4.Understand How far to backtrack

5.Draw the line

6.Track That Average

7.Study the Turns

8.Be acquainted with the Warning Signs

9.Trend or Not a Trend

10.Be acquainted with the Confirming Signs

 

1. Mapping Trends:

First study long term forex trading charts, then begin your analysis with a monthly and weekly forex trading charts .After that start forex trading charts study the ones that consists of years. A large scale map shows a wider picture of the long term view point on the forex trading market. Once you establish long term go for the daily and intra-day forex trading charts. A short term forex trading market view can frequently deceive you. If you only trade the very short term, chances are that you will do well if your forex trading is in the same direction as the intermediary and long term trends in forex trading.

 

2. Identify the trend and follow:

Determine your forex trading trend and follow it. Forex trading market trends are in many sizes, such as long term, intermediate term and short term. Decide which one you are going to do for forex trading and use the most suitable forex trading chart. You have to make sure that the direction of your forex trading is towards that trend. In case of, up buy dips. Sell rallies in case, the trend is down. In case ,of, intermediate trend, daily and weekly charts is the most appropriate way. In case of, day forex trading, daily and intra day charts to be used. In each case, permit the long kind of forex trading charts define the trend, and then use the shorter term forex trading chart for time.

 

3.To find out the low and high of trend:

Find the support and resistance levels. Support levels is the best place to buy forex trading market. That support is normally a former reaction low. Near resistance levels is the best place to sell forex trading market. Once a resistance maximum point has been broken, it will regularly provide support on following pullbacks. To explain it in other words, the old “high” becomes the new “low”. Same as, when a support level has been broken, it will normally create selling on following rallies, the old “low” can become new “high”.

 

4.Understand How far to backtrack:

How to measure percentage retracements. Up or down forex trading market corrections normally review a substantial part of the former forex trading trend. You can calculate the corrections in current trend in uncomplicated percentages. A fifty percent retracement (price movement in opposite direction) of an earlier forex trading trend is usual. Usually a minimum retracement is one third of the earlier trend. Usually maximum retracement is normally two thirds. Fibonacci retracements of 38% and 62% are also interesting to watch.

 

5.Draw the line:

Drawing the forex trading trend lines is simple and effective charting tools. All you need is guide for drawing straight line and two points on the chart consists of up trend lines drawn along two successive lows, down trend lines are drawn along two consecutive peaks. Forex trading prices will every so often pull back to trend lines before recommencing their trend. The break in trend lines usually indicates a change in trend. A line which touched three times is a valid trend line. The longer a trend line has been in effect the more times it has been tested, the more significant it becomes.

 

6.Track That Average:

Tracking moving averages. Moving averages provide objective buy and sell indicators. They inform you that if current forex trading trend is still moving and help verify a forex trading trend alter. Moving average do not inform you beforehand, on the other hand, a trend alter is about to happen. A combination chart of two moving averages is the most appropriate way to find forex trading indicators. Some well known futures forex trading market combinations are 4- and 9- day moving averages, 9- and 18- day, 5- and 20-day. Indicated whenever the shorter average line intersects the longer. Forex trading price overpass above and below a 40 day moving average also provide good forex trading indicators. As moving average chart lines are trend following indicators, they are at best in a trending forex trading market.

 

7. Study the Turns:

To learn the turns always track oscillators. Oscillators help us to identify the over bought as well as oversold forex trading market. While moving average offer validation of a forex trading market trend alteration., oscillators frequently warn us in time that a forex trading market has rallied or fallen too far and will soon turn. The two well known are the Relative Strength Index RSI and Stochastics. Work on scale 0 to 100. RSI, reading over 70 are over bought ( inflated in price) while reading below 30 are (unreasonably low in price ) 80 and 20 are Stochastics overbought and over sold values. For Stochastics 14 days or weeks and 9 or 14 days for weeks for RSI Oscillators deviations frequently warns of forex trading market turns. Such tools work well in a forex trading market range. Weekly indicators can be used as filters on daily indicators. Every day indicators can also be used as filters for intra day forex trading charts.

 

8. Be acquainted with the Warning Signs:

Gerald Appel developed a MACD The Moving Average Convergence Divergence indicator. In forex treading It unites a moving average crossover system with overbought and over sold elements of an oscillator. Indicates buy when the fast moving line intersects below the slow moving line above the zero line. Weekly forex trading market indicators have priority over daily indicators. AN MACD histogram outline the difference between the two lines and gives even prior warning of trend fluctuations. The vertical bars used in showing the difference between the two lines on the chart is called “histogram”

 

9. Trend or Not a Trend:

The line that helps determine whether a forex trading market is in a trending or a forex trading phase, this very line is called ADX. ADX line measures the magnitude of trend or way in the forex trading market. Presence of strong trend is indicated by a rising ADX line. Presence of a forex trading market and the absence of a forex trading trend is indicated by a falling ADX line. Moving averages favors a rising ADX line, oscillators favors a falling ADX line. What is suitable for the existing forex trading market environment is determined by plotting the direction of the ADX line.

 

10. Be acquainted with the Confirming Signs:

Volume and open interest are significant validating indicators in futures forex trading markets. Volume pave the way for forex trading market price. It is very important to understand that heavier volume of forex trading market is going towards the dominant forex trading trend. In an uptrend in forex trading market heavier volume should be seen on up days. Increasing open interest makes sure that new money is supporting the dominant forex trading trend. Declining open interest is mostly a warning that the trend is near conclusion. A solid price uptrend should go along with rising volume and rising open interest.

In Forex trading market technical analysis is a useful skill that nourishes with knowledge and experience. Remain a student of forex trading market technical analysis and you will always learn.

 

Definitions:

An accurate and constant relationship between Hindi-Arabic numbers in order was rediscovered by a thirteenth century mathematician Leonardo Fibonacci. (1,1,2,3,5,8,13,21,34,55,89,144,etc. to infinity) The total of any two successive numbers in this order equals the next higher number. After first four, the ratio of any number in the order to its next higher number move toward 618. The ancient Greek and Egyptian mathematicians were well aware of that radio, as the “Golden Mean” which had significant relevance in art, architecture and in nature.

In an article which was published in 1984 by George Lane is Stochastics - an oscillator. Based on study and experience that when prices rise then closing forex trading prices incline to be closer to the upper end of the forex trading price reach, on the other hand, in down trends, closing forex trading prices tend to be near the lower end of the range. Stochastics has somewhat larger overbought and oversold limits than the RSI and is still a more unpredictable indicator. The term ?schochastic? mentions the location of an existing futures forex trading market price is relative to its span over a set phase of time (usually 14 days).

 


Technical Analysis

 

2.1 How To Read Forex Charts

2.2 Forex Trading System

2.3 Pivot Point In Forex

2.4 Perfect Forex Trading System

2.5 Ten Laws Of Technical Trading

2.6 Using Technical Indicators To Identify Trends

2.7 Trends And Corrections

2.8 Open Price And The ATR

2.9 Focus On Higher Grounds

2.10 Indication Of Trend Change In Forex

 


Forex Education

 

The Basics of Currency Forex Trading

Technical Analysis

Technical Indicators

Fundamental Analysis

Intraday Trading

Emotional & Behavioral Part

Risk & Money Management

Trading Guide