Forex Trading Education For The London Open
A thorough Forex trading education must include an understanding of the effect market timings can have on trading and liquidity.
Good trading opportunities often arise at the time the London market opens as this can be one of the busiest trading times of the day.
Add London open analysis to your Forex trading education and see if you can recognize good setups from the lively market conditions.
The following questionnaire and checklist will help.
London Open Preparation
Browse your charts about 15 to 30 minutes before the London market opens and use these questions as a guide:
Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!
Look out for divergence on the MACD on the 4 hour, 1 hour or 15 minute chart. Then check to see if there are any other signs price may go in the direction of the divergence.
Looking at the four hour chart, ask yourself, what is the overall trend?
Using the last swing high and swing low, use your Fibonacci tool and note the retracement and extension levels and see if price is approaching any of them.
Look to see where price is in relation to the 200 Exponential Moving Average (EMA) on the 4 hour, 1 hour and 15 minute charts. If price is above the 200 EMA on the 15 minute chart but below it on the 4 hour and 1 hour charts, then price is bucking the trend and you can expect it to go the other way at some point. (The opposite will be true if price is below the 200 EMA on the 15 minute chart but above it on the higher time frames.)
Are any Economic Reports imminent?
Looking at the candle that closes the first 15 minute period after London opens, do you see any distinctive patterns, or is the candle itself a doji or a hammer or any other shape indicating price exhaustion?
What would my risk be and where would I place my stop if I entered a trade right now in a particular direction?
If, shortly after London opens, you see a number of these signs drawn from the analysis questions given above, take note and decide whether there is a good trading opportunity. Either:
trade
wait for clearer signals or a better entry point
Increase your Forex education by carrying out this kind of analysis around the time of the London open.
You will be able to fine tune your analytical skills and be in touch with the underlying feel of the market.
Forex trading education does not depend on a magical formula. What it does entail is years of work, study, practice and experience, often hard earned through watching many trades go bad.
Eventually the newer trader learns mental discipline, and how to control the emotions - probably the biggest part of a Forex trading education.
Practising a set procedure like the one above, while laborious to start with, will help the newer trader make fast progress toward the day when consistent profits are made on a regular basis. - 23159
Good trading opportunities often arise at the time the London market opens as this can be one of the busiest trading times of the day.
Add London open analysis to your Forex trading education and see if you can recognize good setups from the lively market conditions.
The following questionnaire and checklist will help.
London Open Preparation
Browse your charts about 15 to 30 minutes before the London market opens and use these questions as a guide:
Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!
Look out for divergence on the MACD on the 4 hour, 1 hour or 15 minute chart. Then check to see if there are any other signs price may go in the direction of the divergence.
Looking at the four hour chart, ask yourself, what is the overall trend?
Using the last swing high and swing low, use your Fibonacci tool and note the retracement and extension levels and see if price is approaching any of them.
Look to see where price is in relation to the 200 Exponential Moving Average (EMA) on the 4 hour, 1 hour and 15 minute charts. If price is above the 200 EMA on the 15 minute chart but below it on the 4 hour and 1 hour charts, then price is bucking the trend and you can expect it to go the other way at some point. (The opposite will be true if price is below the 200 EMA on the 15 minute chart but above it on the higher time frames.)
Are any Economic Reports imminent?
Looking at the candle that closes the first 15 minute period after London opens, do you see any distinctive patterns, or is the candle itself a doji or a hammer or any other shape indicating price exhaustion?
What would my risk be and where would I place my stop if I entered a trade right now in a particular direction?
If, shortly after London opens, you see a number of these signs drawn from the analysis questions given above, take note and decide whether there is a good trading opportunity. Either:
trade
wait for clearer signals or a better entry point
Increase your Forex education by carrying out this kind of analysis around the time of the London open.
You will be able to fine tune your analytical skills and be in touch with the underlying feel of the market.
Forex trading education does not depend on a magical formula. What it does entail is years of work, study, practice and experience, often hard earned through watching many trades go bad.
Eventually the newer trader learns mental discipline, and how to control the emotions - probably the biggest part of a Forex trading education.
Practising a set procedure like the one above, while laborious to start with, will help the newer trader make fast progress toward the day when consistent profits are made on a regular basis. - 23159
About the Author:
For a free candle & chart pattern recognition reference tool click here: Candlestick Charts See how to use trendlines to get an optimum trade entry point: Trendline Break
posted by X - Men @ 2:26 AM
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