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Forex channel trading strategy pdf

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Web25/12/ · Position trading is a long term strategy. Unlike scalping and day trading, this trading strategy mainly focuses on fundamentals. It is Email: [email protected] Web– The 3 different types of pricing channels, including candlestick charts and diagrams– Chapter 2 – The exact steps and specific directions for trading a pricing channel– What Web2/7/ · Some of the best forex strategies are: Indicator trading – This is when you use indicators to track the movements of different currencies, so that you can make better WebTrading–A Simple Forex Trading Strategy for Consistent Profits. While there are numerous complex trading strategies, there are also excellent basic trading strategies ... read more

I also take the time to interact with the online community of traders by participating in forums such as that as ForexVibes www. This means that sometimes I will end past midnight, and other times I will be done well before lunch time. This is unlike, say, stocks or futures which traded through the exchanges such the London Stock Exchange or Chicago Mercantile Exchange.

Trading of currencies is done OTC over-the-counter , in the sense that currency buyers and sellers from all over the world make a binding contract with each other after agreeing on a price — and this is not carried out through an exchange.

This aspect of spot forex trading is different from forex futures trading which is carried out through an exchange.

Forex traders carry out their activities by dealing directly with one another or through brokers via telephone and internet connections. In this centrally cleared system, the CME will act as the central counterparty and guarantee the performance of all contracts for both buyers and sellers. Unfortunately, FXMarketSpace is an institutional trading platform and is not open to retail market players.

According to the website www. Therefore, as a central exchange for forex retail players is still not a reality, I shall focus on the OTC structure of the forex market in this chapter.

Players of the forex market range from those who trade billions of dollars a day, to those who trade just tens of thousands of dollars. This club is known as the interbank market. Down the hierarchy are the smaller banks, big multinational companies, hedge funds and other institutional investors or speculators, and retail forex brokers. These large speculators may also conduct currency transactions directly in the interbank market, if they deal in large amounts and have credit standings with the large banks.

Next in line are the independent retail traders who lie at the bottom of the market structure. These individual traders mainly trade through forex brokers as they generally trade in much smaller lot sizes. Central banks of countries are also market players, although they are not always involved in the market. See Figure 2. Figure 2. Hedge funds and companies are not included in this illustration as the retail trader Small Small will usually not deal directly with Banks Banks any of them.

Without a central exchange, currency exchange rates are made, or set, by market makers — they make the bid and the ask prices based on the currency movements that they anticipate will take place. The largest banks are the major market makers, and they handle very large forex transactions — often in the billions of dollars — on behalf of their clients, such as other institutions or companies, and also for themselves. Many banks have traders dedicated to trading speculatively for the bank.

The resulting massive flows of money handled by these large banks are what primarily drive currency prices. This big money-laden network forms the interbank market where large banks deal with one another, and is where most of the trading activity takes place.

The transactions carried out by these major banks amount to the greatest bulk of the total daily forex volume. These big banks include Citigroup, Barclays Capital, UBS and Deutsche Bank. Brokering platforms The banks deal with one another directly, or through electronic brokering platforms like the Electronic Brokering Services EBS or Reuters Dealing Matching. These brokering systems get the best available exchange rates for the various currency pairs, and match buying and selling requests from bank dealers.

Between these two competitors, they connect at least banks together. Smaller banks that trade smaller amounts also get access to these brokering platforms. Large companies Companies and businesses are involved in the forex market because of their need to pay for products and services which are denominated in other currencies. Since these commercial entities deal in smaller quantities, compared to that of large banks, they usually trade through banks instead of directly accessing the interbank market themselves.

Large overall trade flows can have a significant impact on the forex market, as they play a role in the supply and demand of currencies. Sometimes companies may also be involved in currency speculation for the purpose of generating additional revenue. Central banks Central banks hold the key to controlling the supply and demand of national currencies; hence they play a very important role in the forex markets.

Examples of some prominent central banks include the US Federal Reserve Bank the Fed , the European Central Bank ECB , the Bank of England BOE and the Bank of Japan BOJ — with the Fed undoubtedly being the most influential among all the other central banks in the world. Issues that are of most concern to central banks are those relating to: inflation price stability , economic growth and the unemployment rate.

One of the ways that central banks control these factors is through the setting and adjustment of interest rates, which will affect the valuation of many currencies. Sometimes central banks intervene directly in the forex market when they are not satisfied with the current exchange rates of their currencies. That is, they may find that the current exchange rate is either too high or too low for the overall benefit of the economy. The Bank of Japan is well-known for its intervention in the market.

Hence, when the BOJ deems that the Yen is getting much stronger against, say, the US dollar or the Euro, it may step into the open market to deliberately depress its currency by selling Yen against US dollars and Euros. This act of central bank intervention may cause other institutional players to follow suit, and further drive the currency exchange rate towards the rate that is favoured by the intervening central bank.

Most of these institutional speculators have international portfolios that consist of both domestic and international assets like stock or bonds to diversify their holdings.

They tend to be very aggressive participants of the spot forex market as they often facilitate currency transactions when purchasing or selling foreign assets.

For example, an investment manager who is in charge of an international stock portfolio will be required to buy and sell foreign currencies so as to pay for any purchase of overseas stocks. Hedge funds, being largely unregulated, often practise very different styles of wealth generation from investment management companies; they tend to adopt more aggressive forms of trading with the aim of generating a high return on investment.

Sometimes, a portion of their assets under management may be allocated specifically for currency speculations, with the objective of maximising their overall profits. Large hedge funds and investment management companies are capable of moving the forex market in their transactions.

Forex brokers The emergence of sophisticated online forex brokers made forex trading feasible for private individuals. In the past, only wealthy individuals could speculate in the forex market, but now things are very different. Anyone can simply open a trading account with a retail forex broker and trade currencies online with little money upfront, as forex brokers tend to offer highly leveraged margin accounts for individuals.

There are basically two types of forex brokers: 1. market makers: who set the bid and the ask prices themselves, and 2. Electronic Communication Networks ECNs : consolidate various bid and ask prices from market makers and other participants connected to their platform, and display the best available prices. These are explained in some detail below. Market Makers Market-making is a lucrative business for banks and brokers, and forms the backbone of market liquidity. By quoting the bid and the ask prices on the screens of electronic brokering platforms, or through telephone calls, they are essentially providing liquidity and inviting other qualified parties other banks, hedge funds, corporations or retail customers like individual traders to deal with them.

In doing so, market makers must be prepared to buy or sell from other market participants. Some market makers may have established credit links with banks that trade on the interbank market, or they access electronic brokering platforms like EBS or Reuters for pricing.

the price at which the market maker will buy bid price , and the 2. price at which it will sell at ask price from a customer. During periods of high liquidity in which there is a great deal of trading activity, spreads of the actively traded currency pairs are usually kept quite narrow, between pips. When the market is very quiet with little trading action going on for a particular currency pair, for example just prior to the New York close on Fridays or during news releases, dealing spreads tend to widen, sometimes by a huge margin, as a way for market makers to protect themselves when they feel that they may have to carry additional risks.

Market makers usually operate a dealing desk, which refers to the market maker trading with the customer, and the presence of dealing desks means that the market maker may potentially trade against the customer.

They may move their currency quotes pips away from the interbank rates. Independent traders should always be sceptical of claims by some market makers when they say they do not operate a dealing desk. Electronic Communication Networks ECNs ECNs are electronic trading platforms that match buy and sell orders automatically at the specified prices. Traders tend to be more aware of their existence in stocks or futures markets.

An ECN broker gets its currency pricing from several liquidity providers such as banks, market makers or other traders who are connected to the system. When an order is placed, it is routed to the best available bid or ask price in its system. Unlike the case of some market makers, spreads on ECNs are variable rather than fixed. Although ECN-type brokers typically charge a small commission, you can usually get tighter spreads on many currency pairs due to the large liquidity pool available.

Risks of trade manipulation are also minimised when using genuine ECN brokers as compared to brokers that operate dealing desks. This aspect of OTC shifts the odds of success against individual traders, especially if the forex broker acts as a market maker. Since traders have to deal directly with their brokers, the latter will usually hold the opposite side of the transactions. Because of the inherent conflict of interest that exists, this arrangement does not sit well with many individual traders as they fear that the market maker will trade against them, and that is not an uncommon practice in the market making industry.

No information on volume Since buy and sell transactions are not cleared by a central system, there is no way of knowing the total volume of trade. Lack of volume data can pose a challenge to stocks or futures traders who have made the switch to currencies as they may have become used to checking volume. No singular exchange rate at any one time Exchange rates do differ from place to place, screen to screen, depending on which parties are offering what. Cash transactions take place between countless parties at any one time, and there is no exchange which records all these transactions.

Some independent traders are not even aware of this peculiar aspect of OTC dealings. Since there can be a few different prices for a currency pair at any one time, you may not be able to see what is the best available price if you trade through only one market maker.

Generally, though, the rates provided by market makers to retail traders are quite close to the pricing quoted in the interbank market. No standard data Exchange rates differ from one market maker to another because there is no consensus specified by a centralised market. Different market makers have different rates at the same time although usually not differing by more than a few pips.

A trader would have to accept what is being quoted by his broker unless he compares prices with other brokers. Price charts from different price feed vendors will also look slightly different as they each have their own data source.

Although, in general, the currency prices are quite similar. The forex trading day Also, being a hour market, boundaries of a trading day are blurred. Traders from around the world are in various time zones. Traders from, say, Singapore would display a different timing from their US counterparts — who tend to display EST Eastern Standard Timing on their price charts.

While the trading arena has had a boost from the CME-Reuters joint venture of a central forex exchange, it remains to be seen if that can benefit independent traders. Trade manipulation by some market-making brokers is something that is difficult for traders to prove, and something that is easy for the culprits to dismiss.

However, despite the limitations that come with the OTC territory, spot forex trading can be extremely financially rewarding for those who are aware of the limitations and know how to deal with them. And trading forex is not one of the easiest ways — despite what many new traders believe. Many traders fail, and they empty their trading accounts before they learn how to exploit the forex market to their advantage. Although there are also traders who are successful in forex trading, their numbers are small compared to the majority of losers.

Many times, traders are not aware that they have the power and might to shift the odds to their favour, that they can dramatically increase their chances of success if they want to.

The main reason why many traders get defeated by the market can be attributed to their lack of knowledge. In this 21st century, where the buzzword is knowledge, it is not just a matter of working hard, but also a matter of working smart.

Knowledge is the key that can open many doors — if you have an intimate knowledge of how something works, you can then come up with ways to exploit what you know to your advantage. This applies to forex trading as well. You need to know how to identify high probability trade setups and how to manage your money wisely. For every transaction in the forex market, there are winners and losers.

Your goal is to make more overall profits than losses over a period of time, and to emerge an overall winner. My approach to consistent trading success lies in three main pillars, or the 3Ms: Mind, Money and Method.

It is often said that we are our own worst enemy. Human beings are emotional creatures, and most of our decisions are guided more by emotions than logical thinking. Our mind is capable of playing tricks on us; we can get seduced into unfavourable situations by our emotions. Emotions can work for us or against us.

Sometimes they can save us from landing in a pile of sticky mess, but sometimes they can land us in it. We can also turn the tables around by playing tricks on our mind, making it believe whatever we want it to believe. Do you have the mental strength? Whether you are new to trading currencies or a forex trader who has some experience, here are some questions to ask yourself: Do you really have a strong desire to succeed in forex trading?

Sure, every one wants to succeed in something, but do you have the desire to want to succeed in forex trading? First of all, this field is not for every one, for you must have the passion for it. If you just want to try your luck, or dabble, in trading, you will just end up among the majority who lose their money. You must have the deep desire to want to accomplish your goals, because without this desire, your thoughts will not materialise into action, and it is action that could transform your goals to reality.

To be a successful trader, you must be highly self-motivated, have a concrete plan of action, and not be afraid of failure. Are you prepared to devote a lot of time and effort into picking up trading skills and knowledge? To be really good at anything, you need skills and knowledge in that field.

A huge amount of time, effort and money is required for a trader to attain consistent success in forex trading. Despite the availability of forex trading-related resources on the internet, and in the bookstores, traders can find it quite daunting to learn about trading on their own as they do not know what there is to be known.

I recommend that you check out those which are offered by skilled and practising instructors. Note: Be wary of signing up for courses or seminars that are full of hype, for they can be very misleading. Avoid those that give you the impression that you can attain consistent profits after two days of intensive learning, or those that require you to purchase expensive software.

While there are some shortcuts to gaining knowledge via courses or seminars, there is no substitute for honing your trading skills in the market. Are you willing to accept losses as part of trading? Every one makes mistakes, and mistakes are inevitable.

Got a trading loss? Then whip out your trading log to record what your mistakes are and what you have learnt from that losing trade. Always have something positive to take away from your losses, and treat it as a learning experience. Know that there will be other trades coming your way.

Are you willing to take sole responsibility for your trading decisions? You read some market analysis, and then trade according to what the analyst is saying. That trade turns out to be a loser, and you turn around to blame it on that market report. It is dangerous to blame losses on other people, the forex market, or the stars, for you are the only person responsible for pulling the trigger.

And if you blame others you will never be able to find out how you can improve. Fear and greed Fear and greed are the two dominant emotions that affect not just the state of our mind, but also the currency market. In fact, the fluctuations of these two emotions are the main drivers of the currency market. There are, of course, other emotions that exist in the market such as disappointment, regret and so on, but fear and greed are the principal forces that tilt the scales of supply and demand of currencies.

When traders feel overly optimistic about a country or its currency, they become consumed by the great hope that the currency would appreciate in value against another currency. They are then guided by this hope and greed to buy the currency pair now so that they could hopefully sell it at a higher price in the future. Greed then grows into euphoria, as traders continue to buy and buy, thus taking currency prices to newer highs. When people are buying a currency with great hope, they are also selling the other currency in the pair with great fear.

On the other hand, when currency prices go down, fear and greed are also the main drivers of the move. All in all, fear and greed are behind the steering wheel of the currency market. So, while you must learn to recognise these emotions in the market, the problem comes when you allow them to distort your logic when it comes to making trading decisions, as most of these decisions will turn out bad, and are likely to cause you to regret your actions later.

Since there is no way of banishing these emotions for good, the best thing to do is to control these emotions, instead of letting them control the way you think and act. Face and control your fears Since greed can be categorised as a kind of fear, which is the fear of missing out, I will discuss the primary types of fears relating to trading, and how they can be overcome.

The first step to preventing fears from ruining your trading performance is to recognise the various forms of fear that is connected to trading. And once you recognise the type of fear you are experiencing, the easier it is for you to handle that emotional obstacle so that you can trade better.

That is the key to emotion-free trading. It is not about pretending that those fears do not exist, but how you handle them that matters. Here are some common trading-related fears.

Fear of missing out Why do so many people rush to departmental store sales, or rushed to buy technology stocks during the dot-com boom? Any kind of buying mania stems from a very strong emotion that is commonly invoked in people, and that is the fear of missing out. In trading, this fear manifests itself especially during a sharp rally or decline of a currency pair.

Your heart begins to pound really fast, and you have a million thoughts zipping through your brain, with most of the thoughts urging you to buy now, now, now. I am losing out! Traders suffering from this type of fear are usually the ones who get onto a trend too late.

Be disciplined and hold off that mouse whenever you sense that this type of fear is creeping up on you. Think instead of all those traders who are pouring dumb money into the market, and be glad that you know better than them not to join in the craze. Fear of losses Trading is a game — there will be winners, and there will be losers.

Sometimes you win some, sometimes you lose some. Losses are bound to happen, no matter how accurate a trading system may be. The fear of losing is most prominent in new traders as they do not yet have adequate trading skills and knowledge to help assess and evaluate trading opportunities with a high level of confidence.

This can lead to trading paralysis, whereby traders become afraid of pulling the trigger when it comes to entering or exiting trades as they fear losing money or a big portion of their trading capital. However, if you have a reasonable stop-loss order in place, that is in accordance to your money management rules, you should have no reason of being fearful of damaging the trading account based on just one trade. That is what stop-loss orders are for — to guard against huge losses. When you do encounter hesitancy in pulling the trigger, evaluate if you have valid reasons for doing so or if you are simply held back by fear.

Traders just have to get used to the reality that losses are inevitable. The trick is to ensure that your losses are kept small so that you do not harm both your trading account and your state of mind. A trader does not have to be right. It does not matter at all whether he or she is right or wrong; what counts is whether he or she is profitable in the long run. Traders should not be hung up on the outcome of single trades, or even a few trades, as trading performance has to be assessed over a period of time.

What matters is that you end up profitable over a period of time. Once you place less emphasis on being correct on a current trade, your fear of making wrong decisions should abate, thus enabling you to make better trading decisions without feeling burdened by the overwhelming pressure to be correct in that trade. Remember that there will be times of losses and times of profits, which is why it is so important to enter only trades that have a high probability of success.

Focus on the big picture Do not get caught up in feeling invincible or pessimistic after a win or a loss. As trading is a very highly charged and emotional activity, it is very easy for traders to oscillate between emotional highs and lows.

The outcome of just one trade should not affect your overall performance, unless you have violated proper risk management guidelines by betting the farm on a single trade or by over-leveraging. A trade is just one of many trades. When you are wrong on one trade or several trades, try not to beat yourself up or feel regret. Instead, analyze to see where and how you could have done better in those trades or what mistakes you may have made, and record what you have learnt from them.

If there was really nothing that could have been preventable, just accept that the market is unpredictable. The outcome of one or a few winning or losing trades should not be magnified. Other trades will surely come. I strongly believe that once a trader has honed his or her trading skills, the ultimate factor that will affect his or her overall profitability is money management skills.

Money management is all about managing the possible risks, and it is the defining factor that separates winners and losers in forex trading. Novice traders think of how much they can harvest from the market; experienced traders think of how much they can lose to the market. Many traders are so eager to trade to make big money that they completely overlook money management. Poor money management also explains why so many traders get wiped out by the market.

Money management is about fully optimising your trading capital. It allows you to be proactive in managing risks, and to cope with trading losses — which are part and parcel of the game. It is an essential tool to ensure that you will have more than enough to last another day in the trading game. No matter how good a trading system may be, there will be times when you will experience a series of losses.

Success comes to those who have set down rules for money management, and have the discipline to follow them through their trading. Preserve your capital The shining light that attracts all traders to the forex market is the prospect of being able to grow their money by tapping into the online trading platform as their own in-house money tree.

In almost any field, it is true that most people are drawn to short-term benefits, but are myopic when it comes to long-term planning. Trading is no exception. When risk capital is put aside for trading, you are hoping that this amount of money could be transformed into a much bigger amount; otherwise, what would be the point of risking it?

But if this capital runs out, what can you bank on to make your desired profits? After all, money begets money. To drive home the importance of capital preservation, I will discuss the concept of drawdown, and how that is relevant to money management. In other words, it is the amount of money that you lose — it is usually expressed as a percentage of your total trading equity at any given time.

Drawdown is not an indication of your overall trading performance, as it is calculated when you have a losing trade against your new equity high or your original equity, depending on which is higher. Recovering from drawdown As drawdown gets bigger and bigger, it becomes increasingly difficult to recover the equity. Many people are not aware that in order to recoup the percentage of equity that they lose, they will need to gain a bigger percentage just to break even.

The answer is no. It will require an Let me show you with numbers. OK, that is not scary yet, but if you start losing more and more of your capital bigger and bigger drawdowns , the faster you will go down the rabbit hole. While many traders hope for that One Big Win that will magically transform them into millionaires overnight, they are more likely to be confronted with the One Big Loss that will threaten their survival in the forex market if they do not exercise careful money management.

If a trader has a big loss, he or she will have to spend more time to get back to where he or she was before, instead of using the time to make profits. Traders who burn out quickly in the market are those who do not show respect for risk. On the other hand, traders who have flourished are those who fully understand the importance of stringent money management and incorporate that into their trading approach.

There is no way around to recouping slowly, unless you want to drive yourself to total destruction by risking more and more of your equity to try to make back your losses. Holding on to a losing trade for too long is the biggest cause of a big drawdown. Be well-capitalised Most new traders run out of money even before they see any profits in their trading account. Indeed, those who are new to trading most likely do not have a good understanding of the risks and dangers that are lurking in the market, and few even know what drawdown means or have even heard of this word.

Many of them do know that trading can be very risky if they do not know what they are doing or how things work in the currency market and, to them, one of the obvious but incorrect ways to limit this risk is by allocating just a small amount of money to their trading account.

There are also many new traders who begin their trading business with little initial capital as they simply do not have enough money. Whatever their reasons may be, being under-capitalised will be more than just a mistake; it is often the prelude to trading failure. Forex traders who want to set themselves up for success must be well-capitalised. Never mind that some retail brokers are offering a minimum account deposit of just a few hundred dollars — a paltry amount that almost every one can afford.

Sufficient initial capital must be available to cushion the impact of a string of consecutive losses, so that you do not wipe out your trading account. A series of losses is really not that uncommon in trading, and all traders must be financially prepared for it.

Those with insufficient trading capital tend to set really tight stops, which will naturally then lead to a higher probability of being stopped out. They also tend to have a good chunk of their account eaten away by unreasonably large losses in relation to their trading account, if they do not set tight stops. So it seems that whichever way they turn, they are setting themselves up for failure, unless they are willing to trade smaller lot sizes.

Looking outside of trading, many other businesses fail because the owners often do not have enough capital to tide them over the initial starting phase. For example, a new restaurant owner must set aside enough money to pay the rent of the restaurant for at least a few months to a few years, assuming that the restaurant would not make any net profits in that period of time.

If the owner only has enough to pay for two months rent from his or her own pocket, and the restaurant is still not making enough to cover the rent and other expenses in the third month, how do you think the business is going to sustain itself? The entire business could fail, not because of the business model, but because of the lack of sufficient capital to keep the business running while the customer base builds up.

Trading, as I have mentioned before, must be treated just like any other business, not a frivolous casual pursuit. The point is this: by starting off sufficiently capitalised, you are more likely to adhere to your money management rules and, by doing so, you are really giving yourself a good fighting chance in the market. Losses are really just part of the trading game. If trading losses are kept manageable and reasonable, they should not dent your trading account too much, provided that you are well-capitalised.

Knowing when to get out of a losing position in the currency market is a very important tool of risk management. Stop-loss orders allow traders to set an exit point for a losing trade, and are the best weapon against emotional trading. While I recommend that traders place a stop-loss order at the time of placing their entry order, mental stops may also be used — but preferably by traders who are more disciplined.

From experience, it is much wiser to have a wider but reasonable stop than to have an unreasonably tight stop. Generally, a stop-loss order should not be shifted in the losing direction while a position is opened.

A good trader should know beforehand when to cut his or her losses, and also when to get out of the market with profits. It is indeed the elusive factor that courts the relentless determination of its seekers. Want to know where it lies? It only exists in the creative part of the mind — together with fairies and gnomes. There is no perfect formula or strategy that can achieve that unrealistic goal because people who are involved in the financial markets evolve with changing market circumstances, even though certain old habits die hard.

Despite the non- existence of the magic formula, there are certainly high probability ways of trading the forex market. While the bulk of this book is focused on the Method part, you need to combine Method with both Money and Mind in order to attain success in the trading business.

The old question: technicals or fundamentals? There are generally three broad categories of forex traders pertaining to what they base their trading decisions on: 1. the technical trader, 2. the fundamental trader, 3. the trader who combines both technicals and fundamentals. Each type of trader has a distinctively different way of interpreting the currency market based on his or her own opinions. Technical trading A technical trader believes that historical data has a big role in the forecasting of future price action, and is thus devoted to currency price chart analysis, making use of various charting tools such as support and resistance levels, trendlines and a myriad of chart indicators to understand past price behaviour so as to predict what the market will do next.

Most forex traders employ some kind of technical analysis to help them make trading decisions. Technical traders assume that everything that is to be known about the market has already been factored into the current price. Fundamental traders believe that the exchange rate of currencies are largely driven by economic and geopolitical conditions, aside from central bank interventions, and will keep track of economic data such as trade balances, inflation, Gross Domestic Product GDP , unemployment rates, interest rates and so on.

They are also concerned about what policymakers have to say regarding the monetary policy of the country, and will keep on top of these when speeches are scheduled.

Combing technicals and fundamentals Since there are advantages of analyzing the forex market from these two different fields, it would be too restrictive to just side with one area and ignore the other. The most effective traders tend to make trading decisions based on a combination of both technical and fundamental factors in order to get a feel of the overall market sentiment, and then decide to either trade that sentiment or to trade against it taking a contrarian approach.

Thanks for the comment Joy, you are entered in the competition. Thanks for continuing to share these useful strategies, I am interested in any indicator that is not commonly available and allows me as trader to get a slightly different perspective on market activity, than the majority of traders using commonly available approaches. A channel trading indicator variation as described sounds like a great tool to have, thanks David.

This indicator is truly one-of-a-kind. Its been setting up very powerful breakout channels. This is a trade one of our team members just took using this powerful indicator png Nailed it! Looks like another possible entry here as well on this EURUSD H1 Time Frame. Thank you for this trading strategy--extremely well explained.

i wonder if you would mention how you stalk a possible channel trade, please?? when you find a promising channel-- perhaps it is a 1 hour chart-- do you view it every hour? this is where i dont do well is stalking the setups and it is one of the reasons why i am not a successful trader I believe that if it made a number of successful trades in a row, i might be more attentive-- however the setup can go on for days and i get distracted and never see the entry png This is a H1 and a M30 TIme chart.

Once you see that the CTI triggered a breakout out, you simply analyze the trade and make a trading decision based on what the indicator showed you. Right here there is no breakout triggered but you could use another strategy to trade that channel and find a good possible entry. Whats great about this indicator we are finding out as we go is that you can trade inside and outside the channel. So there is basically always a possible trade happening. The indicator would make short work of trying to identify these channels.

Would look forward to that! Sure thing! Most Traders are not graphic designers or artists so why should we have to constantly be drawing these channels 🙂. It would be great to have the CTI Trading Tool indicator that would trade the Rabbit Trail Strategy! What interest do you have in an indicator that would help you trade the Rabbit Trail Strategy consistently?

The CTI Indicator that we developed and giving one of these away to a lucky trader In this comment section will do that for you! Comment away, we would love to hear from you! Hey Girish! Thanks for the question. This strategy will work in all markets on any time frame.

We recommend on lower time frames lowering your target area to pips instead of With that small tweak the results are great for those scalpers out there who want to use this strategy. Channel trading is super simple with this indicator! In Fact, here is a nice current EURUSD Channel drawn by the CTI. Pretty Cool Right? Our focus will be on Forex currency pairs, but price channels can be also found on Equities, Futures, Commodities and other trading instruments. Having said […].

please check out our previous comment for clarification. If you need any more help with this strategy you can always reach us at info tradingstrategyguides. com Thanks! Thanks for the strategy! Just for clarity do I make the entry on the 15min chart or on 1 hour chart where I identified the breakout.

Can the strategy be utilised by swing traders too?? Yes this strategy uses the 15 minute chart to identify the break and go if you want to call it that. So once you see a pull back candle that closed on a 15 minute chart, you wait for two min.

candles to close then you make your entry. So the example I used you had to wait for two bullish green candles to close on a 15 minute chart in order to make the entry. Hope this helps! Wow guys everytime i see the name J Crawford or Trading Strategy i know im in for a trading tips treat!! You guys are awesome.. Ive learnt how to use the Ichimoku and some good scalping strategies eg LazyRiver.. Soon i will be equipped enough to venture into trading!

Thanks a lot and please keep up the good work.. Great to hear! We love hearing your guys feedback. Keep studying and use that demo account to your advantage! Have a great day! it looks very nice. Did you try a backtest or reel trades during a time long enough like trades for instance? If you have done that, what are the results: number of win trades: how many pips? number of losses and how many pips? Thank you again Roland.

Awesome question! We would love for you to go ahead and try it yourself and post your results on here after you have back tested trades or so. It would be great to see a dedicated trader take the time to see if they are willing to use a strategy before they go live. We look forward hearing from you and can't wait to see your results if you are willing to do that. Very well explain in simple words and charts, However Entry not very clearly understood, further Risk Reward seems not matching.

Your entry is to be placed after a pull back on a 15 minute chart. The stop is placed below the last support or resistance depending if it is a buy or sell in the channel. The goal is 50 pips so risk reward will vary depending on where your stop is placed in the channel.

This step-by-step guide will show you an easy way to trade with the MACD indicator. Get the free guide by entering your email now! Please log in again. The login page will open in a new tab.

After logging in you can close it and return to this page. Rabbit Trail Channel Trading Strategy by TradingStrategyGuides Last updated Nov 1, All Strategies , Indicator Strategies , Most Popular 95 comments.

F This Channel Trading Strategy can be a huge difference-maker in your trading arsenal. Our Most Advanced Channel Trading Indicator!

Click here to learn more! What is Channel Trading and Why Is It Important for This Strategy? Kind of like skid marks on a road It goes back and forth but never exits the area. There Are Three Different Types of Channels: Ascending Channel Descending Channel Horizontal Channel There needs to be at least two support and resistance levels to validate a channel!

The support and resistance points are marked in the pictures above. You can see in the three examples above that they all have at least 2 levels of each. Rule 1: This Channel Trading Strategy Requires You To Draw a channel on a 4 hour or 1-hour chart.

Not too bad. So basically all you are doing here is drawing parallel lines. Rule 2 Identify If there is a Breakout of a channel on a 1-hour chart. This breakout happened on the top of the channel. So that means you will BUY. If the breakout happens on the bottom of the channel then you will SELL.

Not so fast.. Rule 3 Wait for a Pull Back on a Minute Chart. Why wait? Because the market is a money-grabbing machine, and they want your hard-earned cash! Look at the example below for proof of this. That is why it is so important to Wait for it to pull back. So back to our original example, you see below the pullback we are talking about. Our Most Advanced Channel Trading Indicator we call the CTI Indicator. Available on the Meta Trader 4, Meta Trader 5, Ninja Trader 7, and Ninja Trader 8 Platform!

Rule 4 After Pull Back, Make Entry. We are getting so close to getting on our rabbit trail to make some serious pips! If it is a BUY trade we want to see TWO bullish up candles after the pullback. If it is a SELL trade we want to see TWO bearish down candles after the pullback. Below is where we would enter.

Enter after the two bullish minute candlesticks close. You may be thinking oh no! The trade went the wrong way, get out now! Rule 5 Stop Loss Placement This is probably one of the most important rules of the strategy.

In a Buy The stop loss will be placed in the channel below the last support point. In a SELL The stop loss will be placed in the channel above the last resistance point. In our example, you can see where the stop loss was placed. Rule 6 Ride The Rabbit Trail to 50 pips using this Channel Trading Strategy! The last thing you need to do is know when to exit. This strategy goes for a 50 pip target. The rabbit trail could take 2 hours, or it could take as long as two days.

Stay in the trade and remember your rules. You are going for a 50 pip breakout trade! So to recap, here is what needs to happen in order for you to enter a trade: Rule 1: - Draw a channel on a 1 hour chart. Rule 2 - Identify If there is a Breakout on 4 hour or 1 hour chart. Rule 3 - Wait for a Pull Back on a 15 minute Chart. Rule 4 - After Pull Back, Make Entry. Rule 5 - Find a Stop Loss Placement. Rule 6 - Ride The Rabbit Trail to 50 pips! com To Learn Another strategy, check out the trend following strategy article here.

Thank you for reading! In terms of getting set up as an online forex trader, the steps remain constant regardless of which broker you decide to join. Below we list some of the steps that you will need to take. In order to open an account, you will need to enter some personal information. Standard details requested by the broker will be things like your name, residential address, and contact details. Some brokers will also require your tax status and will ask you to provide more financial details such as employment status, net worth and any regular income.

In this instance, you will usually need to answer some multiple-choice questions based on your experience. This is usually a fairly simple process. Known as KYC in the industry Know Your Customer , this simply means that the forex broker is going to need you to prove who you are.

Some brokers will verify this using scanned copies of documentation. Now you need to select your payment method of choice usually from a drop-down list. Bear in mind that how long this takes to go into your trading account will largely depend on the payment method — so always check this before parting with your cash.

Some brokers even support e-wallets like PayPal and Skrill. After reading our forex trading PDF you should now be feeling confident enough to begin trading. However, we do recommend that you always try out a free forex trading demo first. This will allow you to test out your newly formed trading strategies before risking your own capital.

In the next section of our forex trading PDF, we explore some of the more important technical indicators and market insights used by seasoned traders. First invented by Richard Donchian, the donchian channels can be adapted as you like, in terms of parameters. Should you choose to view a day breakdown, for example, the indicator will be created by taking the lowest low, and the highest high of that period so in this example 30 periods.

When observing the moving average on a donchian channel you can look at averages stretching from 25 days to the last days. The direction which is permitted is determined by the direction of the short-term moving average. With this in mind, you should think about opening one of the following two positions:. You will need to sell your pair in order to exit your trade if you open a long position and visa-versa.

This is another commonly used forex indicator. The simple moving average aka SMA operates at a slower rate than the present market price known as a lagging indicator. Furthermore, it uses a lot of historical price data. In fact, more so than most other strategies. A good indication that the latest price is higher than the older price is when the long-term moving average is below the short-term moving average.

This could be considered a buy signal due to an upward trend in the market. In the opposite scenario when the long-term moving average is higher than the short-term moving average, this of course points towards a sell signal due to a downward trend. Moving averages are usually used as evidence of an overall trend, rather than purely forex trading signals.

Of course, this is a great way to make your breakout signals much more productive. If you are alerted to a sell signal, this indicates that the short-term moving average is below that of the long-term moving average, so you might want to place a sell order. However, if you are given a signal to buy, this usually means that the short-term moving average is higher than that of the long-term moving average.

Using breaks as trading signals, the breakout is considered a long-term strategy. The breakout itself occurs when the market goes further than these consolidation limits — whether that be lower or higher. As such, a breakout must take place whenever a new trend occurs. By looking at breaks, you will have a good indication of whether or not a new trend has begun.

In this case, you might want to use a stop-loss order to give you a better chance of avoiding a substantial loss. As glamorous as a career in forex trading might sound, there are a number of risks that you need to take into account. In the below sections of our forex trading PDF, we explore these possible risks in more detail.

The transaction risk is in relation to the exchange rate and any time zone differences. This means there is a chance that at some point between the beginning and end of a contract that the exchange rates could be subject to change.

The risk of this happening elevates with the more time that passes between entering a contract and settling the same contract. This generally leads to investors withdrawing investments, and as a result, your return will be lower. The good news is that when a currency rate is on the rise, chances are that the respective currency will be stronger.

When this does happen, your returns could be higher. This is because seasoned investors like to gain exposure to stronger currencies. The higher your leverage is, the higher your losses or benefits will be. Of course, this means leverage can affect your trading in a positive or negative way — depending on which way it goes.

The final part of our forex trading PDF is to explore which brokers are popular with both newbie and seasoned traders. Each of the forex trading platforms listed below has been pre-vetted, meaning that you can be confident they tick most boxed. This means that each platform is regulated, offers heaps of forex pairs, has low commissions and fees, and supports several payment methods. AvaTrade is an established broker that offers thousands of financial instruments.

On top of stocks, indices, commodities, and cryptocurrencies all via CFDs , you can also trade heaps of forex pairs. There are no trading commissions to pay, and spreads are very competitive. You can either trade via the AvaTrade web-platform, or via popular third-party provider MT4.

The platform is heavily regulated, with several licenses under its belt. com is an FCA, CySEC, ASIC, and NBRB-regulated online broker that offers heaps of financial instruments. All in the form of CFDs - this covers stocks, indices and commodities.

You will not pay a single penny in commission, and spreads are super-tight. Leverage facilities are also on offer - fully in-line with ESMA limits. Once again, this stands at on majors and on minors and exotics. If you are based outside of Europe or you are deemed to be a professional client, you will get even higher limits.

Getting money into Capital. Having made it this far through our forex trading PDF, you should by now have an understanding of how technical analysis works, and have a good grasp of the macroeconomic fundamentals which guide currency values.

Armed with all of the useful information included in this guide, you should be ready to get out there and start trading forex. Hopefully, making a profit and learning more along the way. If you are a trader with somewhat limited funds, you might find that swing trading suits you best. If you have a larger trading fund available to you, you might have a more profitable experience with fundamental based trading. Either way, w e do recommend trying out a free demo account where possible before trading with your hard-earned money.

As well as reading helpful guides like ours, actually learning by doing will also provide you with a better sense of how it all works and how you might like to trade yourself. What does forex mean? Forex as a term refers to 'foreign exchange'. You will make money in two different scenarios.

by TradingStrategyGuides Last updated Nov 1, All Strategies , Indicator Strategies , Most Popular 95 comments. This Channel Trading Strategy can be a huge difference-maker in your trading arsenal. I will also show you a forex channel trading system, trend channel trading strategy, fx analysis, and much more in this article. Also, read about the Trail stop-loss in Forex.

This strategy is all about taking advantage of the price movement that is moving away from normal price action. We want to escape this channel and enter on our rabbit trail to pip glory! Here is another strategy called The PPG Forex Trading Strategy. A channel is simply a price movement that uses support and resistance in the past to validate what it will do in the future.

This type of movement creates a price channel on the charts. When constructing these channels, ALWAYS remember that both lines need to be parallel to each other. Do not force trend lines to look like a channel.

Helpful information : If you are completely new to this type of trading dive into some charts and do some channel work.

Simply go back in time on the charts and draw yourself some channels. If they match what you see above, perfect! Keep doing them! Once you did about of these it should be fresh on your mind and you will be ready to master a trading strategy that mainly focuses on these channels. The first thing you need to do to get this strategy started off is you need to find a channel on a four hour or one hour chart. Remember there must be two resistance and support points to validate a channel.

This strategy can use many currency pairs. Make sure you search through all of them. Do not get caught up in only trading one currency pair. Get in the charts and see for yourself! There are channels everywhere. This strategy will work with any currency pair. The opportunities are endless So below is a prime example of a horizontal channel. This is AUDNZD chart taken on a minute time frame. I added the color where the channel is highlighted.

Just as long as both of your lines are parallel to each other. The way you find the trade is to find a breakout of the channel. In a perfect world, the support and resistance levels will hold on forever. Below the breakout candle is marked. This was taken on a one hour chart. In this strategy, we will use the one hour chart to find a breakout. Here is an example of a master candle setup.

So if you would have got in this trade right when it broke out of the channel you would soon have got stopped out. This is where many people struggle. They see that it broke out so they want to click BUY or SELL right now!! Our lines are drawn, we identified the breakout and waited for the pullback. It is now time to make our trade. The criteria to make an entry after a pullback on a minute chart to enter a trade is that there must be two minute candles that support our trade.

In our example we are using we would need to see two green bullish candles after a pullback to enter a trade. We are not worried about that because our strategy told us that the breakout occurred and we are moving up!

You always need to place a stop loss somewhere for a reason. If you are throwing in stop losses 5 to 10 pips from your entry order just because someone told you to do it, then you are without a doubt treading some dangerous waters. That way if it does come back in the Channel it will hit the support level and end up going back up in a bullish movement. Hope you find great success with this strategy. If you have any feedback about this strategy please leave us a comment or you can reach us at info tradingstrategyguides.

To Learn Another strategy, check out the trend following strategy article here. Please leave a comment below if you have any questions about Rabbit Trail Channel Strategy! Like this Strategy? Grab the Free PDF Strategy Report that includes other helpful information like more details, more chart images, and many other examples of this strategy in action!

Please Share this Rabbit Trail Channel Trading Strategy Below and keep it for your own personal use! Thanks Traders! We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more. Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow.

This channel strategy makes sense and easy to implement. Hopefully the CTI Trading indicator will be a great compliment. Thank you for sharing! Don't know of any other trading education business that constantly gives away so much for free and I particularly like the simplicity used to explain every strategy accompanied by the pics. I hope the same can be said of the CTI.

Can't buy anything now but looking forward to read the reviews. I had been a member of Trading Strategy Guides for some time now and having been trading for quite some time I can filter out which or who is talking garbage out there, as we all know in the trading industry not just forex there is a lot of scammers and dishonesty and who knows what else; having said that I honestly and truly believe that the Trading Strategy Team is one of the few "LEGIT" out there, I had read all their articles, read the strategies that they teach and even bought some of their systems or indicators like the EFC which works well for me indeed.

For all those traders out there especially the newbies who desire information you have got to know the Trading Strategy Team and what they teach; read their stuff and try their indicators etc; it will save you Time, Money and Effort bouncing around looking for strategies that work and save yourself the headache and frustration especially.

So once again save yourself from "Trading Destruction", become a member try their stuff or whatever you choose to do, it will honestly be one of the "Greatest Trade" you'll ever make.

I just wanted to thank you for sharing your knowledge for free. Time is the most valuable thing in the world and you guys are spending it for us to help us with our trading journey. So, no amount of thank yous can replace your time and it is the least I could do. So many comments just because most of you want to get a system for free.

Greedy people,greedy as fk Hi Jay, Thanks for your comment as well. So guess what, you are also entered in! Have a great day and enjoy your weekend. I would definitely love to have this indicator. I have using the rabbit system for a little while and it seems to be solid. This indicator would definitely help as working full time and trying to trade is always a handful. Hello Guys. Thanks for all the effort you are putting into the sending of the newsletters and thank you for all the support.

I got many useful material from you. Of course I would love to have the CTI indicator and the system. Best regards, Gihon. We will continue to give you guys free helpful information and strategies because every trader is different after all. Thanks for the comment! It will be great to get this free as I have been losing allmy investmentseverytime I invest to trade.

The channel trading strategy is great, it helps my trading given its simplicity. Although I have never used a proprietory indicator before, i believe i will be lack to have and use CTI for long time, LONG WINS, LONG GOOD LIFE.

Yes, 50 pips is a great target on higher time frames that the strategy teaches you. Thanks for the comment. this strategy is very easy with good profit, just stick to this clear algorithm and use this amazing indicator. Thanks for the comment Datka!

Sure is a great indicator. We cannot wait to see what some of you think It has huge potential! Any indicator that serves as eyes and rules-follower across multiple pairs is gold in the bank, confidence in the future, and maybe even vacation of my dreams.

Thanks for creating such a tool. No Problem Mary, we hope that we can get you there because we think everyone deserves a chance to go on a vacation of their dreams! The great thing about CTI indicator is even a newbie can use it like a pro. CTI indicator is great success for channel trading. Yes, this certainly is a step over any other channel indicators that we have found on the market.

Forex for Beginners: How to Make Money in Forex Trading (Currency Trading Strategies,Forex Channel Trading PDF Book Details

WebTrading–A Simple Forex Trading Strategy for Consistent Profits. While there are numerous complex trading strategies, there are also excellent basic trading strategies Web25/12/ · Position trading is a long term strategy. Unlike scalping and day trading, this trading strategy mainly focuses on fundamentals. It is Email: [email protected] Web– The 3 different types of pricing channels, including candlestick charts and diagrams– Chapter 2 – The exact steps and specific directions for trading a pricing channel– What Web2/7/ · Some of the best forex strategies are: Indicator trading – This is when you use indicators to track the movements of different currencies, so that you can make better ... read more

Download Free PDF. because each provides tons of free education materials, videos and best of all a demo account that allows you to practice Forex trading for free without the need to deposit any money. It will be great to get this free as I have been losing allmy investmentseverytime I invest to trade. Traders, however, tend to look for high-probability trade setups using technical analysis as their favourite tool, and many of them also incorporate market sentiment into their trading decisions. Position trading is a long term strategy. To 'gamble' is to take a high risk with limited chance of achieving your expected pay out.

Some currencies have higher interest rates than others, and these are usually the currencies that attract the most attention from savvy international investors who are always looking across the global landscape in the continual search for a better interest rate yield on fixed-income investments. Since there is no way of banishing these emotions for good, the best thing to do is to control these emotions, instead of letting them control forex channel trading strategy pdf way you think and act. While many traders hope for that One Big Win that will magically transform them into millionaires overnight, they are more likely to be confronted with the One Big Loss that will threaten their survival in the forex market if they do not exercise careful money management. The relative significance of news will vary from time to time. Knowing what the market thinks and how it thinks is crucial to trading success because, ultimately, the trader is dealing with other traders out there, and needs to know what they are thinking, forex channel trading strategy pdf. One of the favorites among technical traders is trading price channels.

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