In this video:
00:40 Forex Factory to keep you up to date with different time zones
01:18 Four things that are critical to help you with your trading
02:19 A really good safe way of trading
03:59 Learn about strong psychological bounce areas
Examples of the way that I trade and some hints that will really help you become a successful Forex trader
Hi, in today’s video I want to give a few examples of the way that I trade, and to give you some hints that will really help you become a successful Forex trader. Let’s find out more right now.
Hi, its Andrew Mitchem here, the Forex Trading Coach, welcome along.
Today is Friday, the 27th of September, and nearly into summertime here this side of the world. Just a quick reminder that if you are in New Zealand, the clocks do change this weekend. So, if you’re waiting to see my daily trades at 9:00 a.m. our time next week and you’re still waiting till 10:00 a.m., that’ll be the reason why; just look out for those clocks.
Just talking about that, I always use something like Forex Factory to keep me up to date with the different time zones and different change of times into summertime, wintertime, etc., using a site called forexfactory.com. It’s a great site, helps you with all the news announcements, and any relevant and up to date Forex information. So, that’s forexfactory.com.
What I wanted to talk about today, continuation patterns, reversal patterns, trend line breaks, and round numbers. Four things that are critical to help you with your trading.
So, I want to give you a quick tip on all four of those. Had lot of e-mails, because I said last week that I promise I’ll talk about that, so here we go.
First of all, continuation patterns. A continuation pattern is when you are trading with the main trend, but after a pullback, and it’s a really good safe way of trading. What it means is you’re not entering the trade when it’s too late, because – an example, in an uptrend, you would have, let’s say, an uptrend, you then have a pullback, and then you’re looking for an opportunity to go long again, to buy again after a main uptrend, but only after you’ve had a pullback, and then you see the candle pattern or the trade setup to tell you, hey, this is the opportunity to go long again after you’ve had that retracement, because don’t forget that all currencies move up and down even in an uptrend, they’re constantly zigzagging their way up and down. No currency does that. So always lookout for pullbacks, retracements, and then the opportunity to go long again, and of course, exactly the opposite with the short position; you’ve had a downtrend, you then had a pullback, and then you look for an opportunity here to go short again. So, that’s a continuation pattern; a really good safe way of trading with the overall main trend, but after a pullback or retracement.
The other type of trade that I look for in my trading, and the way that I teach people, my clients to trade, are looking for reversal trades. Now a reversal trade looks really dramatic on a chart; let’s say you have a huge uptrend, and then you get the opportunity to go short, or sell, at the top of an uptrend. The opposite with a short position, if you have a long downtrend, and then you get the reversal pattern to buy. So, that’s a reversal pattern. It can be a little bit more unreliable as a pattern, you do need to have several other factors backing the trade up, you couldn’t just take an engulfing pattern in a big downtrend looking to go long again, because you need other things backing it up.
Trend Line Break
Now, one other thing you might look for is the next thing I want to talk about, which is a trend line break; so always look out for your trend line breaks. You don’t have to be perfect with your trend lines because they are quite subjective, but just to give yourself a trend line break. If in a downtrend you see a bullish candle and it closes above that break of that trend, so it closes back above the downtrend line, look out for that type of scenario aswell your charts, it really helps to identify good, strong candle patterns from those that may be weaker setups. So, that’s a trend line break.
And, lastly, I want to talk about round numbers. I’ve talked about those in the past on these videos and podcasts before, but round numbers are something – a number that ends in double zero or fifty (00 or 50). They are very, very powerful, strong psychological bounce areas that the big players, the banks, the large financial institutions that you use within their trading; so use those to your advantage. So, for instance, let’s say that the Euro/US dollar was at 1.3500, or 1.3495 let’s say, even better example, don’t go buying at that time. Why would you buy into a round number, a psychological bounce area, where the 1.3500 level could be the high, and then the Euro/USD may retrace from there. So, don’t go buying into those levels. So, use them as bounce levels, so if, let’s say, the Euro/USD bounced at 1.3500, let’s say it moved up, it came back, it hit 1.3500, and then you get a bullish pattern bouncing off 1.3500, that’s your opportunity to go in long, having 1.3500 as a good, strong psychological bounce area, it adds safety to the trade in terms of your stop loss can be below that level, so you have a good, strong psychological area, a round number, place or stop below that, but certainly don’t go buying or selling directly into round numbers; use them as bounce areas, use them as safe areas to place your stop loss the other side of them.
So, four good tips there. Adding on from that, if you want some more information, make sure you sign up for one of my free webinars.