What are pivot points? Professional forex traders and market makers use pivot points to identify potential support and resistance levels. Simply put, a pivot point and its support/resistance levels are areas at which the direction of price movement can possibly change. The reason why pivot points are so enticing? It’s because they are OBJECTIVE. Unlike some of the other…
Let’s start off with the most basic type of stop: the percentage-based stop loss. The percentage-based stop uses a predetermined portion of the trader’s account. For example, “2% of the account” is what a trader is willing to risk on a trade. The percentage risk can vary from trader to trader. More aggressive ones risk up…
Managing and preserving your trading capital is your most important job as a trader. If you lose all of your trading capital, there is no way you can make back the lost amount, you’re out of the trading game. If you make pips, you got to be able to keep those pips and not give them back to…
Like we promised, here’s a neat little cheat sheet to help you remember all those chart patterns and what they are signaling. We’ve listed the basic classic chart patterns, when they are formed, what type of signal they give, and what the next likely price move may be. Check it out! CHART PATTERN FORMS DURING TYPE OF…
That’s a whole lot of chart patterns we just taught you right there. We’re pretty tired so it’s time for us to take off and leave it to you from here… Just playin’! We ain’t leaving you till you’re ready! In this section, we’ll discuss a bit more about how to use these chart patterns to…
After journeying across the globe with Newbie Ned, and through some basic position sizing examples, you’re well on your way to becoming a competent risk manager. Now knowing how to set the correct position sizes is only a part of what it takes to become a pro at risk management. The other part is discipline. …
Let’s say you want to buy EUR/GBP and your broker account is denominated in USD. In this trade, you only want to risk USD $100. But you’re not trading US dollars, you are trading euros and pounds. How do you calculate your position size? In this lesson, we’ll teach you how to determine your position…
A triangle chart pattern involves price moving into a tighter and tighter range as time goes by and provides a visual display of a battle between bulls and bears. The triangle pattern is generally categorized as a “continuation pattern”, meaning that after the pattern completes, it’s assumed that the price will continue in the trend direction it was moving…
To make things easier for you to understand, as usual, we’ll be explaining everything with an example. This is Newbie Ned. A long time ago, back when he was even more of a newbie than he is now, he blew out his account because he put on some enormous positions. It was as if…
Now that we’ve learned the hard lesson of trading too big, let’s get into how to correctly use leverage using proper “position sizing.” Position sizing is setting the correct amount of units to buy or sell a currency pair. It is one of the most crucial skills in a forex trader’s skill set. Actually, we’ll go…