Triple Tops and Bottoms

Triple tops and bottoms are very much like a double top and bottom formation. When you see a triple top or bottom, know that the next move could be a very large move to the upside or downside, depending on the bullishness or bearishness of the pattern.

Cup and Handle Chart Pattern

The cup and handle chart pattern is a bullish continuation pattern. To put it simply, when you see the cup and handle, it is usually indicative of a future bull movement toward the top of a chart. The cup and handle chart pattern can appear on any chart setting, and is just as useful on long-term charts as it is on short-term charts.

Head and Shoulders Chart Pattern

The head and shoulders is a reversal pattern, meaning that it usually comes before a reversal in a trend. Like other chart patterns, the head and shoulders can be bullish or bearish, depending on how it appears in the chart.

Pennant Chart Patterns

Pennants may allow you to show your colors in rooting for your favorite sports team, but they are used by technical analysts to predict future currency values. Pennants are a very basic chart pattern.

Double Tops and Bottoms

There are two different types of “double” chart patterns: double tops, and double bottoms. We’ll start first with double tops, which are a bearish reversal signal.

Making Money on Forex Trends

You know how to spot support and resistance, how to draw trend lines, and how to construct trading channels. Now it’s time to see how you can make trades based on trendlines.

Channels, Ranges, and Currency Pairs

At some point in each of our lessons on forex trading, the entirety of a concept comes together. Channels and ranges are at the crux of successful application of basic technical analysis, so we’ll dedicate this lesson to making channels and ranges from support, resistance, and trend lines.

Channels

Support and Resistance: The Basics of Technical Analysis

Support and resistance lines are the most simple form of technical analysis. In using support and resistance lines, a trader marks places on a chart at which they believe the price will rise or fall.

Let’s get the basic understanding out of the way before moving forward:

Forex Analysis

Here at ForexOnlineLearning we tend to favor fundamental analysis; however, we do see some short-term value in technical analysis, as well.

Forex Charts and Market Data

You are now caught up on all the innards of the foreign exchange market, from the methods to calculate profit and loss, and the different types of orders. From here, we have only one more topic to cover before getting into the analysis behind the movements in the foreign exchange markets—we need to cover charts.

Recap on Central Banking

Let’s go through the concepts we discussed in this chapter as they relate to central banking and forex:

What Are Central Banks?

He we are deep in the thick of monetary policy and we haven’t yet discussed what central banks are, or how they work. Let’s get into the details of what a central bank actually is, what it can do, and how it does it.

Interest Rates and Central Banks

Interest rates are, by far, the most important piece of fundamental analysis. Each currency has its own central bank, which has a duty to set interest rates for borrowers who need its specific currency.

Recap on Trading News in Forex

Let’s recap the basic concepts behind trading the news:

Trading the News in Forex

You now know that there are three outcomes of news items—no change, or a big up or down move. There are two ways to trade the news in foreign exchange: predicting or following.

What Makes Forex News Actionable?

Why News is Actionable

News becomes actionable because it can be used to spot good trades. With each economic report, there is usually an expected outcome for the market.

Spotting News in Forex

Some forex traders look to trade the news in the foreign exchange markets. In staying on top of key events and happenings, a forex trader can make money from fundamental factors that affect the currency markets.

What is Fundamental Analysis

Fundamental analysis hinges on the concept that all currency pairs find their price based on the underlying strength or weakness of a particular currency. The strength or weakness, the fundamental analyst might argue, is determined by the economics of currency pairs.

Forex Fundamental Analysis

We have covered everything related to technical analysis in detail, and now you’re ready to get your hands dirty in the world of fundamental analysis.

A Recap of Successful Multiple Timeframe Analysis

Let’s recap what it takes to effectively trade multiple timeframes.

Merging Multiple Timeframes

To understand multiple timeframes, we have to understand how to merge multiple chart timeframes together to get to a good view of when it is time to buy, and when it is time to sell.

The Types of Forex Traders

The different types of forex traders can be broken down into a few major categories. What makes each “type” of forex trader different is mostly attributed to how each decides to make trades on the foreign exchange market.

Timeframe Analysis

This concept stands in between fundamental and technical analysis because it’s very important to both. Nevermind their differences, a technical analysts and fundamental analyst will still have to navigate multiple timeframes to decide which trades make sense, and which simply do not.

Multiple Timeframe Analysis

One element that we neglected in the tutorial for technical traders was the importance of multiple timeframes in decision making. Depending on which chart you’re reading, you might see a bullish signal, or you might see a bearish one.

You see, in the short-term, a technical trader might spot an emerging bullish trend on the 15 minute candlestick charts. A technical analyst might see this:

Making a Forex Trade

You know how an individual trade works, how to calculate your profit and loss, and even how leverage plays into your trades. Now you’re at the final step. We’ll cover what you need to know about making a trade in foreign exchange.

Forex brokers offer several different types of forex trades, or orders:

Rollovers and Carry Interest

Rollovers and Carry Interest: Making Money for Making Money

In the last section of this tutorial you learned how you could boost your returns by using leverage. Now we’re going to show you how this leverage actually works, and the costs and gains that come with levered forex positions. These costs or gains are known as forex rollovers, or carry interest.

Pips and Profits: Calculating Profit and Loss

It’s time for a new vocabulary word: pips. Unlike other forex vocabulary words, you’ll hear this one a lot, because it is the way we define success in foreign exchange trading.

Margin Trading: Forex Isn’t only for Millionaires

We have discussed in full several large trades of $10,000. For many investors, this kind of money is out of reach, and for good reason—you don’t need this much money to trade forex! You just need to understand margin trading.

Buying vs. Selling: Going Long and Short in Forex

You’ve noticed by now that the forex market—and all financial markets, for that matter—bring about a whole new vocabulary. Traders even have funky words for buying and selling a currency pair. Traders say they are “going long,” and “going short” a currency pair when they make a trade.

Making Forex Trades: How it Works

You saw an example of buying and selling Mexican Pesos with American Dollars to make a quick buck in the first chapter of this forex tutorial. Now that you’re this far into the series on how to trade, we’re going to take the tutorials to the next level to show you what making money in forex is all about.

New York Forex Trading Session

The last of the markets to open each day, the New York trading session definitely carries a lot of weight in how the markets move.

London Trading Session

London, England has long been the world’s financial capital. Before the United States took over as the market of choice for most exchanges, London was the center for finance, insurance, banking and to this day, it is still a leader in many financial service businesses.

Tokyo Forex Trading Session

On the last page we gave you a brief overview of the three major trading sessions that make up the international foreign exchange market. In this article, we’ll explain the characteristics of the Tokyo trading session, and what investors should know about this very important market.

The 24 Hour Forex MarkeT

In the last article we talked about how the foreign exchange market went around the clock for 24 hours of trading activity each and every day. As the forex market moves around the world, it follows three markets: Tokyo, New York, and London. In the following article, we’ll explain how you can benefit by trading each market.

Forex trading vs stock trading

How the Market Work

Unlike any other market, the foreign exchange market does not have any central clearinghouse where buyers and sellers meet to make a transaction. Instead, international banks known as “interbanks” help set the price for currencies around the globe.

Firms on the Forex Market

In the last article we showed you how foreign exchange participants do not place trades on a centralized market. Instead, each individual person and entity is essentially a little piece of a larger market.

Forex Market Size: Massive.

The foreign exchange market is the largest market by total nominal value of all things traded. Each day, some $4 trillion in value trades hands between governments, institutional investors, corporations, and individual traders who trade world currencies between themselves.

Other markets find it hard to compete against the foreign exchange market’s massive size. The chart below shows the total value of the foreign exchange market versus several other financial markets:

The Dollar’s Global Role in Forex

You have probably noticed by now that the US Dollar is the common denominator between all of the different types of currency pairs—exotics, cross-majors, and major currency pairs.

The US dollar is incredibly important to international commerce, which is partly to do with history as much as it is partly to do with the present.

Exotic Currency Pairs

Exotic currency pairs are currency pairs that include the US dollar, and another currency from a riskier, emerging market currency. These currencies—USD/THB, USDMXN, USD/NOK, among others—are not highly liquid, and come with greater spreads in the bid and ask prices.

The list of exotic pairs is far longer than the list of 7 major currencies. It includes all currency pairs in which the US dollar is included, but another less commonly traded currency is pair with it. Trading these pairs can be costly since there are fewer market participants and traders buying and selling them, and brokers usually raise the costs to trade less popular pairs.

Major Currency Pairs

Just like there are small investors and large investors, there are small currencies and large currencies. In general, currencies are “large” or “small” depending on how popular they are with investors and traders in the foreign exchange market.

Prices Are Relative in Forex Trading

Let’s pick up where we left off in the last article on the basic happenings of the foreign exchange market. We mentioned that people buy and sell currencies for one another, but we need to establish how these prices are set.

WHAT IS FOREX MARKIT?

What is Forex?

To put it in very simple terms, the foreign exchange market is a currency market, where investment banks, institutions, commercial companies, and individual investors go to buy, sell, and ultimately swap one currency for one another.

BUYSIGNAL ON GBPUSD PAIR 07-11-2011

 BUY A GBP/USD 1.6005

take profit 1.6030

stoploss 1.5980

SIGNAL VALID FROM 6.00 GMT - 18.00 GMT