Price Action

Trading Price Action

The concept of trading price action, for our trading method, is the right side trading of prices that have previously been established from chart reading previous price action areas that preceded breakout continuation price moves.

Price Action Area


The rectangle area is what I refer to as a price action area. A price action area is the area preceding where an 'extended' price move occurs - often from some consolidation period like in this case.

In the case of this price action area rectangle, there was a left side sell swing that consolidated between the swing low AND resistance, which was where the sell swing last broke at the yellow circle.

I want to now try to identify the prices specifically [price specifics] related to the price action that occurred - which was a hold of resistance AND an eventual breakout out of consolidation, and resumed the left side sell swing.

Our concept of trading price action 'says' that these same prices will again be relevant when there is a move back to this same area.


Refer From : http://tradingpriceaction.com/

Forex Strategy Outlook: Range and Breakout Strategies Favored on FX Volatility Expectations Read more: DailyFX - Forex Strategy Outlook: Range and Br

Forex options market volatility expectations have bounced modestly since last week’s trade, but currently depressed levels offer little scope for major price moves in the week ahead. We accordingly favor low-volatility Range trading strategies which tend to do well in these types of conditions. Due to their superior risk/reward profiles, however, we likewise think Breakout trading styles are worth taking into consideration. Although said price-following strategies often get chopped out through rangebound market conditions, the eventual breakouts lead to gains. Thus we will keep a close eye on Range and Breakout systems while treating trend-following Momentum trades with a degree of skepticism.

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Forex Trading Automated Systems Outlook

DailyFX+ System Trading Signals – Our Momentum and Breakout strategies continue to see fairly mixed performance through recent weeks, and we will continue to treat Momentum trades with a degree of skepticism until further notice. Breakout2, on the other hand, has proven fairly resilient despite narrow currency trading ranges. We’ve always liked Breakout2 because potential reward always outweighs risk. That is to say, it often loses more often than it wins—but the wins far outweigh the losses. Over the long term these types of low-probability but high-reward systems tend to outperform Range strategies—especially when volatility makes a comeback.

We will reluctantly favor Range2 and Range1 trades in the week ahead by virtue of the downtrend in volatility expectations. Yet we can’t help but pay attention to Breakout2 trades as well; if this is in fact the calm before the storm, Breakout2 stands to outperform on major market volatility.

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Definitions

Volatility Percentile – The higher the number, the more likely we are to see strong movements in price. This number tells us where current implied volatility levels stand in relation to the past 90 days of trading. We have found that implied volatilities tend to remain very high or very low for extended periods of time. As such, it is helpful to know where the current implied volatility level stands in relation to its medium-term range.

Trend – This indicator measures trend intensity by telling us where price stands in relation to its 90 trading-day range. A very low number tells us that price is currently at or near monthly lows, while a higher number tells us that we are near the highs. A value at or near 50 percent tells us that we are at the middle of the currency pair’s monthly range.

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

Strategy – Based on the above criteria, we assign the more likely profitable strategy for any given currency pair. A highly volatile currency pair (Volatility Percentile very high) suggests that we should look to use Breakout strategies. More moderate volatility levels and strong Trend values make Momentum trades more attractive, while the lowest Vol Percentile and Trend indicator figures make Range Trading the more attractive strategy.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES IS MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION.

OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice. The FXCM group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance contained in the trading signals, or in any accompanying chart analyses.

Written by David Rodriguez, Quantitative Strategist for DailyFX.com

DailyFX provides forex news on the economic reports and political events that influence the currency market.
Learn currency trading with a free practice account and charts from FXCM.

Read more: DailyFX - Forex Strategy Outlook: Range and Breakout Strategies Favored on FX Volatility Expectations http://www.dailyfx.com/forex/fundamental/article/weekly_strategy_outlook/2010-03-22-1702-Forex_Strategy_Outlook__Range_and.html#ixzz0ixSNxRwL

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Reference :

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Expert Advisors

Expert Advisors (EAs) are special trading programmes that can be used on the MetaTrader 4 platform to assist you with your trading decisions.

These trading programmes allow you to maintain a particular trading strategy according to a predetermined set of trading parameters.

In simple terms, you can use EAs to monitor movements in the market and perform buy or sell trades automatically according to the strategy that you have chosen.

The use of Expert Advisors is generally limited to the MetaTrader 4 platform however there is an array of other trading systems which work in a similar fashion.

Where can I get an Expert Advisor

If you decide that an EA is a suitable product to use within your investment strategy then there are several ways that you can get your hands on a strategy to suit your needs.

Buy an EA on the Internet

There are hundreds of different EAs available from a host of reputable companies on the internet and whilst ODL Securities does not endorse the use of any in particular, there does seem to be some excellent EAs available at relatively low costs to the end user.

You can buy the programme and install it into your MT4 platform very quickly, meaning you can be trading within minutes.

It is important that you understand what strategy your EA is running and therefore we always recommend that you only use EAs which are in line with your risk profile.

Design your own EA

Although designing your own Expert Advisor is significantly harder than using one from off the shelf, the benefit is that you can customise your own EA to your exact trading requirements.

Creating your EA will be difficult if you do not have a high level of technical knowledge and you will need to understand MetaQuotes Language 4 (MQL 4).

Please refer to http://www.metaquotes.net and http://www.odlmarkets.com/ea/expert-advisors.odl for more information.

FOREX FAQ

Frequently Asked Questions

	01. Some people call the FX market the market that never sleeps. What are the advantages and disadvantages of a 24-hour market? Forex provides frequent opportunities on both the upside and downside. For many years the Foreign Exchange market (FOREX or FX) was out of reach for the mainstream investor. But nowadays with low transaction costs and easy access to the Forex market, one can easily participate in the world’s largest trading arena. It has been said that "The FOREX Market never sleeps." Unlike the Stock Market, there is no waiting for an opening bell. This can be very advantageous if you want to trade on a part-time basis, as you can choose when you want to trade: morning, noon or night. Also, because the FX market is sensitive to Political, Financial and Economical news, a trader can take immediate advantage of this volatility and trade accordingly. The downside to a 24 hour market is that one can easily get obsessed with trading and find themselves "Over trading." return to top

	02. In Forex the terms "margin" and "leverage" play a major part. Could you explain the coherences in contrast to the stock market? The stock market generally does not allow leverage products, unless you are trading an exchange traded future. As FX is an OTC market, leverage can generally be greater, and margin requirements are more flexible depending on the product and entity. As an example of leverage, if a client is on margin of 5% he can trade to 20 times his initial deposit. Also, there are no commissions or exchange fees to pay in the FOREX market which is an advantage to the trader. And with narrow spreads in FX compared to equities this can be an additional saving to the trader. Slippage is another factor in the stock market. But here in the FX market, this is not something that the FX trader has to worry about under normal market conditions. return to top

	03. The volume in the Forex market is bigger than in any other market. To what does a private trader have to pay attention to? With a daily trading volume of over $2 trillion the FX market dwarfs the equities and futures markets combined. This can be good news for traders as one will find that a true trend is more sustainable in FOREX and as long as they focus on the Major support and Resistance levels on a chart, Technical Analysis can play a useful tool for effective trading. At the same time it is useful to keep an eye on Political and Economical Data releases as they really can impact the FX market in a big way. return to top

	04. As with all trading strategies, one must always apply stringent risk and money management rules. What kind of risks are waiting for a Forex-Trader and what are the special preparations you have to make for the FX market? Like all financial markets, one must have a full understanding of the risks involved in trading whether it is FOREX, Futures or Stocks. Because of the combined volatility and leverage offered in FX, traders should pay strict attention to risk control and never put themselves into a situation where they are over leveraged. As mentioned previously, News can have a swift impact on the FX market and therefore using Stop Loss Orders are essential. return to top

	05. Is it possible for a person who has a full-time job to trade in the Forex market? What are the conditions to trade successfully this way? Absolutely, the FOREX market is highly liquid and after spending some time studying the dynamics of this market, one can find unique opportunities which are not available in the other financial markets through most of the day. There are key times during the day where there is good volatility and as long as a trader is equipped with effective strategies and good risk control, these can present profitable trading opportunities. return to top

	06. Is there any basic advice for new entrants in the FX market? Be sensible, have a strong foundation with good education and respect risk rather than abuse it. FX is a very high risk product as are all margined products. The key to becoming successful in the FX market is to ensure one has a plan and a sensible attitude to risk and money management. And don't get over leveraged, as you could be out of the market very quickly. There is no Holy Grail in any of the markets. If a new trader can find a good Educational and Trading Programme and understand how the FOREX market works then this can only help them in the long term. return to top

	07. Is there a minimum size for a Forex-account? A suggested amount of capital to start with is $2,000 and of course the more available capital one has the more flexible one can be. Whatever amount you put in, make sure it is money you can, in the worse case scenario, afford to lose i.e. don’t trade with the money you set aside for your new car or house! return to top

	08. Are there recommended techniques or strategies that are commonly used in the Forex market? A trader would be in a better position to first have a look at a basket of trading styles and strategies. One can now buy a suitable and reasonably priced trading software package and back test ideas. The basic rule of thumb is to trade with the underlying trend. For higher risk traders, they may want to look at break out strategies or reversal strategies which professional traders employ around key news events. With the advent of computers and internet technology, today’s trader is in a far better and advantageous position than before to test and simulate ideas, before putting large amounts of capital at risk. The key point to remember is for a trader to find a suitable strategy to fit their risk temperament, as well as their lifestyle. return to top

	09. What are the key characteristics of the Foreign Exchange Market? The key highlights are: The FX market is a global industry that operates worldwide. The market itself is a network of traders that are connected by telephones and computers and consists of no centralised base or exchange. This is an OTC or 'over the counter' market. The most common type of FX trading transaction is called a 'spot' or 'cash' transaction where one currency is either bought or sold against another currency. Foreign exchange prices fluctuate constantly 24 hours a day, 6 days a week as the supply and demand shifts according to economic or political factors. The three major centres of foreign exchange trading are London, United States and Japan. London trades the largest volume due to its time zone and stringent regulation under the Financial Services Authority. return to top

	10. What are the key reasons to Trade Foreign Exchange? There are 3 key reasons: Speculation To make short term profits from fluctuations in exchange rates. Hedging To gain protection from losses due to changes in exchange rates. Physical Delivery To acquire the foreign exchange currency to purchase goods and services from other countries. return to top

	11. Who are the main participants in the Forex market? The main Forex Market Participants are: Interbank participants are the largest and most important. Corporations, global funds, FX market makers, hedge funds. Individual traders & investors. return to top

	12. What are the advantages of trading forex? Highly liquid markets. Leverage available (remember this affects losses as well as profits). Full transparency with 100% electronic execution. Low transaction costs. Trending markets. The largest and most liquid market in the world – currently worth $2 trillion daily. Multiple liquidity providers. Institutional pricing at retail level. 24 hour trading. Ease of trading - enter and exit markets anytime. Transparent, competitive two-way prices. No commissions or other dealing charges (AxisODL make their money on the spread). Multiple trade sizes. No delivery or contract expiry. Many currency pairs to trade. There is never a bear market – you have the ability to profit in rising and falling markets. When it comes to trading and investing strategies, it could be argued that FX is the 'purest' market available: The Euro is not going to issue a profits warning, no director is going to sell a large holding of stock and any analysts' downgrade is going to have little or no impact on the FX market. return to top

	13. What are "The Majors"? USD – US Dollar. EUR – Euro. JPY – Japanese Yen. GBP – Great British Pound. CHF – Swiss Franc. CAD – Canadian Dollar. AUD – Australian Dollar. 85% of daily transactions involve the majors. return to top

	14. Which are the Most Liquid Currency Pairs? EURUSD – Euro/US Dollar – Euro Dollar. USDJPY – US Dollar/Japanese Yen – Dollar Yen. USDCHF – US Dollar/Swiss Franc – Dollar Swiss. GBPUSD – Sterling/US Dollar – 'Cable'. EURJPY – Euro/Japanese Yen – Euro Yen. EURGBP – Euro/Sterling – Euro Sterling. return to top

	15. How long on average does an "FX trade" last? 80% of FX transactions are open for less than 7 days with 40% open for less than 2 days. return to top

	16. How does the Trading Day progress around the world? Begins in New Zealand and Australia. Tokyo. Europe. London. Ends in New York. return to top

Dollar Holding Own After Last Week’s Gains

The US dollar is for the most part flat in early week trading. Continued gains would target 1.4410/50 in the EURUSD.

The big story last week was the decline below 14625 on Friday. A trendline, channel support, and pivot lows (14800 and 14625) have been broken-the evidence supports the larger bearish wave count. The next potential support is 14410/50. Near term structure is somewhat elusive. Immediate trend is bearish under 14780. Above there exposes 14820, 14910, and 14970 as resistance. Listen to additional thoughts regarding the EURUSD.

Read more: DailyFX - Dollar Holding Own After Last Week’s Gains http://www.dailyfx.com/forex/technical/elliott_wave/eur-usd/2009-12-14-1540-Dollar_Holding_Own_After_Last.html#ixzz0ZiT12FKu

迪拜消息打乱美元上扬步伐

欧元/美元亚市大部分时间横盘整理周五跌幅，欧元/英镑最初向上修正为欧元/美元提供了支持。午盘有关迪拜世界的消息推动汇价强劲反弹，日内市场缺乏重要 数据公布，预期该消息可能会在短期继续影响汇价。但从技术上来看，鉴于汇价周五下破1.4626关键支持，逢高可能仍是卖出机会。