Forex Analysis


The fundamental analysis is a way to understand money and Forex in a better way by approaching economies. Any trading model which is developed by an individual reflects the characteristics, thought process, temperament and experience of the trader who builds it. The FX news calendar is a listing of the economic events that influence currencies. It is no wonder now why the jobs data in the United States, namely the NFP number is crucial for the dollar. Knowing what data follows is a great advantage ahead of the market.

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The first of the two circles in the illustration represents first entry signal by indicating a bullish engulfing candlestick. The second circle represents a bullish engulfing candlestick pattern that is indicated by the white horizontal line and is closing over the current range and a quazi-morning star both of which indicate a further possible entry.

The Difference between Bladerunner and Bladerunner Reversal: There is a major difference between these two widely used strategies. In the case of traditional Bladerunner strategy, the trade moves in the direction of the trend after bouncing from the Polarity indicator where Bladerunner waits for the confirmation of the trend first.

On the other hand, when the price reverses after the completion of the trend to close the price on other side of the Polarity indicator, the Bladerunner reversal comes into play. However, Bladerunner reversal also trades in the trend direction. The price closing on the right side of the trend actually determines this direction.

The above example is a bullish perspective of Bladerunner reversal strategy. Do you have the right plan? An Autotrading Guide Is Forex autotrading is a legitimate practice? Do you have what it takes? Long trades were entered when a fast exponential moving average crossed a slow simple moving average on the hourly chart, provided all the higher time frames were also in alignment up to and including the weekly time period.

An initial hard stop loss equal to the 20 day Average True Range was used. The naked back test results were very positive: These naked results show why it is so much more profitable to let winners run. However, if we look at all those trades which eventually hit five times the hard stop loss, we see that Five times the average true range is much further than the average volatility of two hours, so there is a momentum factor in play.

In fact, this can be shown even more simply by looking at the results of trades taken when the higher time frames were not showing the same momentum:. Note how the results generally worsen the fewer high time frames are exhibiting the same momentum alignment.

Clearly, when a currency pair has been moving strongly in one direction for several weeks, it is more likely than not to keep going. Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch.

Learn more from Adam in his free lessons at FX Academy. Dynamic Stop Loss It is a good idea to never trade without a hard stop loss , i. Stick to the Plan! Our experts weigh in. Keep it Simple Trading doesn't need to be complicated - These simple strategies can pay off. As a general thought and process flow, building a trading strategy can be captured within the following steps, as demonstrated in this figure: Let's discuss the steps to build a forex trading model.

Irrational forex market often moves due to news following release of official numbers like GDP numbers, employment figures, non-farm payroll data release, etc. An effect commonly observed immediately after news release is a high level of volatility leading to significant price fluctuations.

However, around 15 minutes after the news break, prices are often observed to move back to earlier levels, which were maintained just prior to news release. Models can be built to capitalize around these opportunities. Inside day pattern applies to candlesticks, where today's high and low range is within high-low range of the previous day, indicating reduced volatility.

There can be multiple inside day patterns day after day, indicating continuous reduction in volatility and hence significantly increasing the possibility of a breakout. Forex traders build models and strategies based on this concept. Identify the forex security to trade: Forex trading specific strategies require a careful selection of the following: Assets — will the trade involve simply trading currency notes, or trading forex futures, forex options or more advanced forex exotics derivatives like barrier options?

Unless one is a very long term investor, no forex trader can afford to ignore associated news specific to geo-political developments, state of the economy, announcement of associated macros economic figures, etc.