In a Wedge chart pattern, two trend lines converge. It means that the magnitude of price movement within the Wedge pattern is decreasing. Wedges signal a pause in the current trend. When you encounter this formation, it signals that forex traders are still deciding where to take the pair next. A Falling Wedge is a bullish chart pattern that takes place in an…
The head and shoulders chart pattern is a reversal pattern and most often seen in uptrends. Not only is “head and shoulders” known for trend reversals, but it’s also known for dandruff reversals as well. 😂 In this lesson, we’ll stick to talking about trend reversals and leave the topic of dandruff for another time. Head and Shoulders A…
Assume you are a successful retired British spy who now spends his time trading currencies. You open a mini account and deposit $10,000. When you first log in, you will see the $10,000 in the “Equity” column of your “Account Information” window. Usable Margin You will also see that the “Used Margin” is $0.00…
When a double top or double bottom chart pattern appears, a trend reversal has begun. Let’s learn how to identify these chart patterns and trade them. Double Top A double top is a reversal pattern that is formed after there is an extended move up. The “tops” are peaks that are formed when the price hits a certain level…
Let’s discuss leverage and margin and the difference between the two. What is leverage? We know we’ve tackled this before, but this topic is so important, we felt the need to discuss it again. The textbook definition of “leverage” is having the ability to control a large amount of money using none or very little of your…
By now you have an arsenal of weapons to use when you battle the market. In this lesson, you will add yet another weapon: CHART PATTERNS! Think of chart patterns as a land mine detector because, once you finish this lesson, you will be able to spot “explosions” on the charts before they even happen, potentially making you…
Most professional forex traders and money managers trade one standard lot for every $50,000 in their account. If they traded a mini account, this means they trade one mini lot for every $5,000 in their account. Let that sink into your head for a couple seconds. If pros trade like this, why do…
Many forex traders use technical indicators as part of their technical analysis toolbox. We’ve gone through the two types of technical indicators based on the timing of the signals they provide. Here’s a quick recap of what we discussed in the previous lessons: There are two types of indicators: leading and lagging. A leading indicator or an oscillator gives a signal before the new trend or…
Be the casino, not the gambler! Remember, casinos are just very rich statisticians! It takes money to make money. Everyone knows that, but how much does one need to get started in trading? The answer largely depends on how you are going to approach your new trading business. It varies from person to person….
Traders are often so fixated on their winning trades that they totally ignore their losing trades. But it’s from your losing trades from which you stand to learn the most. Here are three ways to learn from the trades that didn’t work out. 1. Calculate your performance Look up your past trade transactions. If you can’t find them,…