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.
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
Around London open time develop recognition skills and add them to your Forex trading education so you can capitalize on this productive market session.
The following questionnaire and checklist will help.
London Open Preparation
Check these points about fifteen minutes to half an hour before the London market opens:
MACD indicators on the 4 hour and 1 hour charts - if they are not going in the same direction exercise great caution!
If there is divergence on the 4 hour, 1 hour or 15 minute charts on the MACD indicator, look for other signs that price may go in the direction of the 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 fundamental announcements due?
As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji's or hammers 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?
If, shortly after London opens, you see a number of these signs drawn from the analysis questions given above, take note and decide whether there is a good trading opportunity. Either:
trade
wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
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 formula involved with Forex trading education. Put simply, successful Forex trading is the result of years of hard work, study, practice, and experience often gained through painful trading scenarios.
Finally, the trader learns the emotional and mental disciplines necessary for successful trading - no doubt the most important part 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. - 23222
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
Around London open time develop recognition skills and add them to your Forex trading education so you can capitalize on this productive market session.
The following questionnaire and checklist will help.
London Open Preparation
Check these points about fifteen minutes to half an hour before the London market opens:
MACD indicators on the 4 hour and 1 hour charts - if they are not going in the same direction exercise great caution!
If there is divergence on the 4 hour, 1 hour or 15 minute charts on the MACD indicator, look for other signs that price may go in the direction of the 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 fundamental announcements due?
As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji's or hammers 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?
If, shortly after London opens, you see a number of these signs drawn from the analysis questions given above, take note and decide whether there is a good trading opportunity. Either:
trade
wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
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 formula involved with Forex trading education. Put simply, successful Forex trading is the result of years of hard work, study, practice, and experience often gained through painful trading scenarios.
Finally, the trader learns the emotional and mental disciplines necessary for successful trading - no doubt the most important part 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. - 23222
About the Author:
For a free candle & chart pattern recognition reference tool click here: Candlestick Charts See how to use trendlines to get an optimum trade entry point: Trendline Trader
posted by X - Men @ 2:21 AM
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