Indicators Are Liars! Trading Using Support & Resistance Levels

Many traders believe that to be successful you need mountains of indicators that give you some kind of “edge” over the . I am here to say that as a means of does not have to be painful or difficult. That less is certainly more when it comes to . I’ve traders with every indicator under the sun on their charts, with years of training under their belts having spent thousands of $$$’s and STILL not making a ….

Why? Because Indicators are ! Sure sometimes you might pull of a trade or 2 but in the end you always get spanked….Why? Because not everyone uses a with your settings, not everyone uses the Stochastic or the . I believe to be an effective you have to look at what the majority of traders look at…So what do most traders look at? Support and ! Almost every system out there uses Support and to some extent. Support and is our number 1 indicator. So why not make Support and your system?! Mark up some levels on a chart using from 1hr and above (this is what the who move the watch, so no lower please) and see what happens! Use other info that the majority of traders watch ONLY as , , Pivots and Fibs.

Support and levels are considered high areas for “reversal”, offering retracements of 0.75 points to in some cases 50+ points. In many instances historically referenced Support and levels can help traders catch tops/ bottoms to the very tick! Why? Because Support and levels are the most widely used ! Everyone from and banks to the at home use Support and levels

For many it may be difficult to leave the system you are using now so why not use Support and levels as a guide alongside set defined by the system/ that you are implementing. Using Support and levels obtained from the 1hr, 4hr and daily timeframes offers the highest odds Support and levels. All levels should have historical significance and thus will be considered high areas. Throughout the day these numbers can become areas of Support AND .

We believe that using Support and as your CORE methodology can reap great rewards for traders.

To find a methodology that really works and receive FREE Support and levels please visit us at http://www.supportandresistancetrading.com/

category Story admin Tuesday 13 January 2009 Comment (0)

The Forex Trader Failsafe Checklist

The Forex can lure the Forex into that appear very attractive at first but turn very quickly into a losing trade.

Many a Forex will relate to this experience:

  • Price has been in a channel for one or two hours.
  • You place an entry order to get taken in at the top or bottom of the channel.
  • Within a your trade is in and within a more you are looking at a loss of -10 , then -15 , and then your stop gets taken out.
  • Price hardly moved for hours but as soon as you got into a trade you were taken out within minutes for a loss leaving you bewildered and muttering, “What happened?”

In the early stages of gaining experience, it is good for the Forex to go by a checklist every time before entering a trade until certain habits become ingrained.

Just having a procedure in place that has to be executed before pulling the trigger on a trade can prevent the Forex from quickly entering a trade just because there are some sudden movements on the screen and the is worried about missing an opportunity.

Yes, disciplining oneself to take time and go through a checklist first may mean missing some good opportunities occasionally. On the other hand, it will prevent having losing frequently.

For a very cautious approach to the newer Forex can use this Failsafe Checklist to determine whether the potential trade setup is likely to be high or low .

FailSafe Checklist

Avoid Going Long If:

  • There is negative divergence on on the 4 hour, 1 hour, or 15 minute chart.
  • on the 4 hour or 1 hour chart is pointing down.
  • Price is well above the Central Pivot Point for the day in a Sell Area. (For a free pivot point calculator go here: www.vitalstop.com/Forex/pivot-point-calculator-download.html)
  • Price is below the 200 EMA (Exponential Average) on the 4 hour and 1 hour chart but above the 200 EMA on the 15 minute chart. (With this setup on the 3 times frames price is bucking the overall and can turn against you at any time.)
  • Price is above a Fibonacci 50, 62, or 79 retracement (calculated from the last high and low)
  • Your stop is not below multiple layers of support such as a significant previous high or low, pivot point, or Fibonacci level.

Avoid Going Short If:

  • There is positive divergence on on the 4 hour, 1 hour, or 15 minute chart.
  • on the 4 hour or 1 hour chart is pointing up.
  • Price is well below the Central Pivot Point for the day in a Buy Area.
  • Price is above the 200 EMA on the 4 hour and 1 hour chart but below the 200 EMA on the 15 minute chart.
  • Price is below a Fibonacci 50, 62, or 79 retracement (calculated from the last high and low)
  • Your stop is not above multiple layers of such as a significant previous high or low, pivot point, or Fibonacci level.

The Most Important Lesson Of All

Implementing this Failsafe Checklist may reduce the number of the Forex participates in. However, here an important lesson is learned - ! Waiting for a high setup can make many demands on a Forex ’s mental resources and emotional strength.

This is probably the most important lesson the new Forex will have to learn. Using a Failsafe Checklist like the one above can make the Forex , engage in thorough analysis using the available, and really start to make progress as a .

Why not print off the Failsafe Checklist and keep it beside the computer for consultation before pulling the trigger on any trade?

For additional on using the indicator for safe click here:

http://www.vitalstop.com/Forex/Advisor/forex-strategy-MACD-save-anxiety.htm

The powerful 200 EMA - easy for developing traders:

http://www.vitalstop.com/Forex/Advisor/200EMA-forex-strategy.htm

For a free pivot point calculator, Fibonacci calculator and the best free economic click here:

http://www.vitalstop.com/Forex/tools.html

category Story admin Thursday 27 November 2008 Comment (0)

Forex Assassin - Is This System A Scam? Find In This Review

system just came out back and experts are already talking about it. I am sure you must have heard of this system already. Also, you must have heard of a formula that this system contains that helps identify the trade. Many of you might be thinking - Is really that good as what experts are saying?

Lets look at the this system -

What kind of System is ?

Each forex system consists of a of a particular category. The primary categories of strategies are -

1. based - These kind of systems on making using fundamental news such as NFP (Non Farm ) etc.

2. Technical Analysis based - Most of the systems fall in this category where the are made using the . There are tons of such as Fibonacci, EMAs, candles, etc.

3. Price Driven - system falls in this category. These systems are based on the theory that particular kind of influence the to move in a particular way.

What is the Formula?

This system primarily is based on a formula. This formula recommends the entry and for the next to be made based on price information of the pair. Since the formula makes the calculations, this frees up the time of the traders since they don’t have to continuously watch the charts. Due to this, the identification of the is matter of just minutes because of this formula.

Is costly?

Typically, from my I have found that all the forex systems come for a standard price of $97. So does this system. I , $97 has become more of a standard. There are few systems that come for even 1000s of Dollars, but they are DVD based courses. Considering this point, this system is more in line with price. Just to mention here, my suggestions is that when you think about buying a system, pay $97 only to the systems you know that have good reviews.

Should you buy ?

Here is the thing. Before buying any system, find out what is its ( Find here Forex Assassin review and ).

However, the first important thing is that you should buy a system only when you are planning to use it. I have known who just buy a , but they hardly open it and use it. If you are planning on doing the same, Don’t buy any system to throw away your !

So, here was my . In all, the system looks to be fine so far. I really like the part where it saves a of time because of the formula it contains. Use the information mentioned here to make decision about .

If you want to know my experience with Forex Assassin system, please click on this link Forex Assassin review.

category Story admin Monday 17 November 2008 Comment (0)

MACD Divergence Forex Signal - How Reliable?

Some traders divergence as a to enter a high trade. They almost suggest you get straight in to a trade as soon as you see divergence.

Is this that reliable? To be fair, it certainly has a place in a successful ’s kit of strategies, but as with any , there are certain precautions that have to be observed to make any trade high .

At this time there doesn’t appear to be any that offers anywhere near a 100% .

So if you are tempted to trade on the basis of divergence, what other factors should you keep in mind?

Divergence Defined

First let’s just out exactly what is meant by divergence.

( Average Convergence Divergence) comes as a standard on all the main charting packages. Some show by itself with two lines, one a combination of a 12 and 26 Exponential Average, and the other line based on a 9 Exponential Average.

Some charting packages also include what is called a Histogram in the same charting area as . The histogram merely represents in a different way what is happening between the two lines as to momentum. The wider the between the lines, the higher or lower the height of the histogram bars.

To identify divergence, simply draw a line across the highs if is above the zero line, or draw a line across the if is below the zero line.

Now go to the price action section of the chart, the candlesticks, and draw a line across the highs directly above where the line is drawn on the highs, or draw a line across price directly above where the line is drawn on .

If they are going in opposite directions you have divergence. In other words, when is making lower highs and lower but price is making higher highs and higher , this negative divergence forms a indicating price could well start to drop.

If is making higher highs and higher but price is making lower highs and lower , this positive divergence forms a indicating price could well start to rise.

Divergence Precautions

Be aware that divergence on a smaller is not so significant. When it is seen on a 15 minute chart it may or may not be very important.

If seen on a 60 minute, 4 hour, or daily chart, start doing more analysis.

If you see divergence on two or more of the higher , then definitely up and take notice and start looking for other factors to indicate when price may react to the divergence.

This brings us to a when divergence as a to enter a trade. On a higher , divergence can be a fairly reliable indicator of a change in price direction. However, the big question is: WHEN?

Many traders get caught out by entering a trade too soon when they see divergence. In many cases, price has still got some muscle to continue in the direction. The who has jumped in too soon can only stare at the screen in dismay as price shoots through his stop taking him out.

How Can This Scenario Be Avoided

Before pulling the trigger when you see divergence on the higher , be sure to look for other key Forex to confirm that the divergence has really kicked in.

For example, if you see a distinctive candle pattern such as a tweezer top or a hanging man on the higher it may appear price has topped out and is now ready to move in the other direction.

If at the same time the distinctive candle pattern is at a key level of previous support or , or at a pivot level, or a Fibonacci retracement or extension level, you have added to believe this could well be a turning point and put an entry order in at this level to get taken in.

At the same time, you will want to consult your calendar to make sure you are not entering a trade near a significant Fundamental Announcement. Even though the divergence may kick in soon, the Fundamental Announcement could cause a major spike in price and take out your stop.

So in summary, is divergence a high ?

Answer: By itself NO!

How can divergence be used safely?

Answer: Check to see if divergence is seen on one or more higher charts such as the 60 minute, 4 hour, or daily.

Then look for other Forex such as candle patterns, support or levels, or Fibonacci retracement extension levels.

In other words, use divergence as a confirmation that you are going in the rather than a stand-alone .

Get a useful free tip on how to use the indicator for safe here:

http://www.vitalstop.com/Forex/Advisor/forex-strategy-MACD-save-anxiety.htm

To learn how to preserve your mental and emotional resources in addition to your equity click here:

http://www.vitalstop.com/Forex/Advisor/forex-day-trading-mental-equity.htm

For the best free economic plus a free pivot point calculator and Fibonacci calculator click here:

http://www.vitalstop.com/Forex/tools.html

category Story admin Tuesday 21 October 2008 Comment (0)

Forex Strategy - How Do You Trade The Non-Farm Payroll Report?

In the development of your forex do you wonder how you can trade the non-farm report?

Seeing this is one of the most, if not the most, volatile announcement during the month (first Friday in every month) newer traders watch the huge movements and wonder how to make from all that .

The answer given below you may not fully appreciate until some explanation is offered.

Question

“How do I trade the non-farm report?”

Answer

“You DON’T!”

Or to put it another way, “By maintaining a neutral position!”

The is far too volatile at this time to expect a high trade. There may be some out there who relish the thought of ‘placing a ’ to go long or short. But serious traders know better.

Actually, the professional traders I know all say the same thing: “Stand aside and wait for the to calm down.”

This may take between 30 to 45 minutes in some cases and even then the direction of the may be uncertain.

Some suggest you can trade volatile such as the non-farm report by waiting for the first leg of the move, up or down, then wait for price to pull back 10 or 15 , then enter a trade to catch the second leg of the move which often follows.

That’s one possibility but still high . Personally I prefer to base my forex on sound assessment and carefully researched .

The Aftermath

However, while many professional traders out the non-farm report, that doesn’t mean they don’t trade afterwards.

After the has made a violent move in one direction you sometimes see price stalling and then give a clear signal that it’s momentum is exhausted.

Look For Combination Factors

This may be in the form of a candle pattern such as a hammer with a very large shadow which also happens to be on a key support or level.

Now you can enter a trade with a small level of as you place your stop just above the high or low of the candle signal.

By applying a number of to the chart pattern after a non-farm report, you may see a point where a previous support/ level convergences with a Fibonacci retracement or extension, or the 200 EMA (Exponential Average), or a pivot point.

If a distinctive candle forms at that level also you can expect a reasonable price bounce and extract a number of from the .

This applies to all fundamental announcements which are considered ‘ ’.

By developing a cautious forex based on sound principles, you will enjoy this and get the of seeing your equity steadily growing.

Get a useful free tip on how to use the indicator for safe here:

http://www.vitalstop.com/Forex/Advisor/forex-strategy-MACD-save-anxiety.htm

To learn how to preserve your mental and emotional equity in addition to your equity click here:

http://www.vitalstop.com/Forex/Advisor/forex-day-trading-mental-equity.htm

For the best free economic plus a free pivot point calculator and Fibonacci calculator click here:

http://www.vitalstop.com/Forex/tools.html

category Story admin Monday 20 October 2008 Comment (0)

Which Courses in Currency Trading Should I Use?

There are tons of courses in out there. How do you know which one to choose? Well it really depends on what it is you’re looking for. If you’re brand new to and want to find out the or if you have experience and are looking to learn how to profitably trade the ?

If you’re a beginner to forex and what to understand the first steps of forex, then a couple of options are babypips.com or any number of great forex like . Babypips has a ton of great mini courses in . They have a new lesson almost everyday. Their approach is both very accessible and fun. It’s just a perfect place to quickly learn the of . Another great place to learn are like . It can be a little daunting and is not as well organized as Babypips but there is a mountain of information on some of the of .

If you are a seasoned veteran of forex and still struggling along, then you are probably looking for something more advanced. You’ve struggled with the and are looking for a solution. I’d recommend trying to understand price action. Try to find courses in that on without indicators. I know this may sound considering everywhere you look, are talking about systems with stochastics, , averages and many other . But if you can understand the underlying reasons of by looking at a chart, then you’ll have an over 95% of the public.

Forex trading success is much easier once you understand what you’re looking at.

Make sure to check out my honest, unbiased reviews of forex courses.

category Story admin Monday 20 October 2008 Comment (0)

Moving Average Convergence Divergence ( MACD ) Charts

The Average Convergence Divergence charts, or charts for short, are a technical indicator that is derived from the more simple average.

The charts are oscillating indicators, meaning that they move above and below a centerline or zero point. As with other oscillating and momentum indicators, a very high value indicates that the is overbought and will likely drop soon. Conversely, a consistently low value indicates that the is oversold and is likely to climb.

THE 12-DAY AND 26-DAY EMAS

The charts are based on 3 exponential averages, or EMA. These averages can be of any period, though the most common combination, and the one we will on, are the 12-26-9 charts.

There are 2 parts to the . We will first on the first part, which is based on the ’s 12-Day and 26-Day EMA. The 12-Day EMA is the faster EMA while the 26-Day is slower.

The behind using a faster and slower EMA is that this can be used to gauge momentum. When the faster (in this case 12-Day) EMA is above the slower 26-Day EMA, the is in an , and vice versa. If the 12-Day EMA is increasing much faster than the 26-Day EMA, the is becoming stronger and more pronounced. Conversely, when the 12-Day EMA starts slowing down, and the 26-Day begins to near it, the movement’s momentum is beginning to fade, indicating the end of the .

THE LINE

The charts use these 2 EMA by taking the difference between them and plotting a new line. Very often, this new line is depicted as a thick black line in the middle chart.

When the 12-Day and 26-Day EMA are at the same value, the line is at zero. When the 12-Day EMA is higher than the 26-Day EMA, the line will be in positive territory. The further the 12-Day EMA is from the 26-Day EMA, the further the line is from its centerline or zero value.

THE 9-DAY EMA

This line on its own doesn’t tell much more than a average. It becomes more useful when we take into its 9-Day EMA. This is the third value when we talk of 12-26-9 charts. Note that the 9-Day EMA is an EMA of the line, not of the price. This EMA (the thin blue line alongside the line) acts like a normal EMA and smoothes the line.

The 9-Day EMA acts as a signal line or trigger line for the . When the line crosses above the 9-Day EMA from below, it indicates that the downtrend is over and a new is forming. Time to consider bullish strategies. Conversely, when the line drops below its 9-Day EMA, a new downtrend is forming and its time to implement bearish strategies.

THE HISTOGRAM

So far, we have covered the most simple form of interpreting the charts. We now look at the histogram. Just as the line is the difference between the 12-Day and 26-Day EMA, the histogram is basically the difference between the line and its 9-Day EMA.

So when the line crosses above its 9-Day EMA, the histogram will cross above zero. In order words, a bullish signal is obtained when the histogram crosses above zero, and a bearish signal is obtained when it crosses below zero.

POSITIVE AND NEGATIVE DIVERGENCE

The histogram forms valleys and peaks. Sometimes, multiple peaks are formed, with each subsequent peak becoming lower and lower. These progressively lower peaks constitue what is known as a negative divergence. A negative divergence on the histogram is an indication that the might reverse in the near future. This could happen even though the actual price seems to be making higher peaks in the chart. Basically, the histogram negative divergence is a warning that the might turn down soon.

Similarly, the positive divergence on the histogram predicts the subsequent . However, sometimes these divergences can create false alarms. If we follow these , we could have bought into a downtrend.

As such, I would like to remind you that individual indicators such as the Average Convergence Divergence () charts should not be used on their own, but rather with one or two additional indicators of different types, in order to confirm any and prevent false alarms.

Steven is the webmaster of http://www.option-trading-guide.com If you would like to learn more about Option or Technical Analysis, do visit for various strategies and resources to help your .

category Story admin Monday 13 October 2008 Comment (0)