Forex Trading Education For The London Open
As part of your Forex trading education, you need to examine and understand the effect market timings can have on trading flow.
Around the time of the London open there is much market activity and you can be presented with good trading opportunities.
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:
Check to see if the MACD indicators on the 4 hour and 1 hour charts are going in the same direction. If not, be very careful!
Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.
On the 4 hour chart what is the overall trend?
Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.
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?
After waiting a few minutes from the time London opens, and you see a number of converging factors based on the analysis points given above, decide whether you are going to enter the market. 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.
It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.
There is no magic surrounding Forex education. It takes years of hard work and practice, study and more practice, and of course, experience which often comes through trades going wrong!
At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times - the hardest and most important aspect of Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading. - 23212
Around the time of the London open there is much market activity and you can be presented with good trading opportunities.
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:
Check to see if the MACD indicators on the 4 hour and 1 hour charts are going in the same direction. If not, be very careful!
Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.
On the 4 hour chart what is the overall trend?
Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.
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?
After waiting a few minutes from the time London opens, and you see a number of converging factors based on the analysis points given above, decide whether you are going to enter the market. 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.
It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.
There is no magic surrounding Forex education. It takes years of hard work and practice, study and more practice, and of course, experience which often comes through trades going wrong!
At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times - the hardest and most important aspect of Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading. - 23212
About the Author:
For a free candle & chart pattern recognition reference tool click here: Candle Chart Tutorial See how to use trendlines to get an optimum trade entry point: Trendline Break
posted by X - Men @ 2:35 AM
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