Forex for a trader
Forex trading charts pdf

Forex trading charts pdfForex Chart Patterns Cheat Sheet. Like we promised, here’s a neat little cheat sheet to help you remember all those forex chart patterns and what they are signaling. We’ve listed the basic forex chart patterns, when they are formed, what type of signal they give, and what the next likely price move may be. Check it out! You never know when you’re gonna need to cheat, hah! Bookmark this thing yo! And as you probably noticed, we didn’t include the triangle formations (symmetrical, ascending, and descending) in this cheat sheet. Confusing I know, but that’s where practice and experience comes in! Like we mentioned, it’s tough to tell where the forex market will breakout or reverse. So what’s important is that you prepare well and have your entryexit orders ready so that you can be part of the action either way! Forex Trading Tutorial for Beginners. Make Forex Trading Simple. Make Forex Trading Simple. Forex trading Basics for Beginners: Market Participants, Advantages of Forex Market Currency Trading Features: Online forex trading techniques A Sample of Real Trade Analysis Methods Forex Guide: Top 5 Tips to Guide You. Thank you! Enjoy the process of learning with us! The file was sent to your e-mail address. Thank you! Enjoy the process of learning with us! The file was sent to your e-mail address. What is traded in Forex market?

The answer is simple: currencies of various countries. All participants of the market buy one currency and pay another one for it. Each Forex trade is performed by different financial instruments, like currencies, metals, etc. Foreign Exchange market is boundless, with the daily turnover reaching trillions of dollars; transactions are made via Internet within seconds. Major currencies are quoted against the U. S. dollar (USD). The first currency of the pair is called base currency and the second one - quoted. Currency pairs that do not include USD are called cross-rates. Forex Market opens wide opportunities for newcomers to learn, communicate, and improve trading skills via the Internet. This Forex tutorial is intended for providing thorough information about Forex trading and making it easy for the beginners to get involved. Any activity in the financial market, such as trading Forex or analyzing the market requires knowledge and strong base. Anyone who leaves this in the hands of luck or chance, ends up with nothing, because trading online is not about luck, but it is about predicting the market and making right decisions at exact moments. Experienced traders use various methods to make predictions, such as technical indicators and other useful tools. Nevertheless, it is quite difficult for a beginner, because there is a lack of practice.

That is why we bring to their attention various materials about the market, trading Forex , technical indicators and so on so as they are able to use them in their future activities. One of such books is “Make Forex trading simple” which is designed especially for those who have no understanding what the market is about and how to use it for speculations. Here they can find out who are the market participants, when and where everything takes place, check out the main trading instruments and see some trading example for visual memory. Additionally, it includes a section about technical and fundamental analysis, which is an essential trading part and is definitely needed for a good trading strategy. Tutorials on Chart Patterns. What do the chart patterns stand for? How much are they helpful for you? What are the basics you should know? How to use them? How to implement the best method to calculate the price targets? Continuation Chart Patterns. Trend continuation patterns are formed during the pause in the current market trends and mainly mark the movement continuation. These patterns indicate that the price action displayed is a pause in the prevailing trend. They help traders to differentiate pause in the price movement from its complete reversal and show that upon breaking out of the pattern the price trend will continue in the same direction. Reversal Chart Patterns. Trend reversal patterns are essential indicators of the trend ending and the start of a new movement. They are formed after the price level has reached its maximum value in the current trend.

The main feature of trend reversal patterns is that they provide information both on the possible change in the trend and the probable value of price movement. Learn Trading with IFC Markets. 4 simple steps to learn trading. Forex & CFD Trading Tutorials Library. Video Tutorials for Beginners and for working with Trading Platforms (MT4, MT5, NTTX) Trading Terminology: Glossary of Forex and CFD Terms. Want to Earn on Foreign Exchange? Get Free Educational Materials. Online Training Course. Which regulation to choose? IFCMARKETS. CORP. (BVI FSC) All profiles registered under IFCMARKETS.

CORP. are subjected to the law of British Virgin Islands and British Virgin Islands Financial Services Commission regulatory standards. IFCMARKETS. CORP. accepts residents of nearly all countries for registering IFCMARKETS. CORP. offers lots of depositing and withdrawal methods, including Bank Wire, Banking Cards (Visa, Mastercard, ChinaUnionPay, JCB), Neteller, Skrill, WebMoney and others IFCMARKETS. CORP. holds AIG Europe Limited professional Idemnity insurance Learn more. IFCM CYPRUS LIMITED (CySEC) All profiles registered under IFCM CYPRUS LIMITED are subjected to the law of the Republic of Cyprus and Cyprus Securities and Exchange Commission regulatory standards IFCM CYPRUS LIMITED accepts only European Union residents for registering IFCM CYPRUS LIMITED offers only Bank Wire for depositing and withdrawal IFCM CYPRUS LIMITED is a member of Investor Compensation Fund which guarantees the compensation up to 20.000 EUR for each client in case IFCM CYPRUS LIMITED is unable to fulfil its obligations Learn more. License, Authorization and Regulation: IFCMARKETS. CORP.

is incorporated in the British Virgin Islands under registration number 669838 and is licensed by the British Virgin Islands Financial Services Commission (BVI FSC) to carry out investment business, Certificate No. SIBAL141073. IFCM CYPRUS LIMITED is a CIF (Cyprus Investment Firm) registered under the number HE 276909. IFCM CYPRUS LIMITED is licensed by CySEC (Cyprus Securities and Exchange Commission) under the license number 14711. IFCM CYPRUS LIMITED is also a member of the ICF (Investor Compensation Fund) for Clients of CIFs (Cyprus Investment Firms). Risk Warning Notice: Your capital is at risk. Leveraged products may not be suitable for everyone. IFC Markets does not provide services for United States and Japan residents. Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure Notice for IFCMARKETS. CORP. US Search Mobile Web. Welcome to the Yahoo Search forum!

We’d love to hear your ideas on how to improve Yahoo Search . The Yahoo product feedback forum now requires a valid Yahoo ID and password to participate. You are now required to sign-in using your Yahoo email account in order to provide us with feedback and to submit votes and comments to existing ideas. If you do not have a Yahoo ID or the password to your Yahoo ID, please sign-up for a new account. If you have a valid Yahoo ID and password, follow these steps if you would like to remove your posts, comments, votes, andor profile from the Yahoo product feedback forum. Forex Swing Trading: The Ultimate Guide + PDF Cheat Sheet. Finding the right Forex strategy is tough. Where do you start? How do you know when you’ve found the right one? Considering the thousands of trading strategies in the world, the answers to these questions are difficult to pin down. It only gets worse when you add the endless number of technical indicators.

But it doesn’t have to be that way. Why not start with identifying a suitable trading style, such as Forex swing trading? Compared to the seemingly endless numbers of strategies, there are far fewer trading styles. While the exact figure is debatable, I would argue that there are less than ten popular styles in existence. Once you’ve identified a trading style that fits your personality, it becomes much easier to find a suitable strategy within that style . Exclusive Bonus: Download the Forex Swing Trading PDF Cheat Sheet that will show you the exact 6-step process I use when trading the Forex market. If you have identified swing trading as a candidate—or just want to know more about it—then this post is for you. By the time you finish, you will know exactly what swing trading is and whether it’s right for you . I will also share a simple 6-step process that will have you profiting from market swings in no time. Read on to learn how to make swing trading work for you. Trading Styles vs. Strategies. Before we move on, it’s important to know the difference between styles and strategies. As I mentioned above, there are far fewer trading styles than there are strategies . Here are a few of the most popular styles: Swing trading Day trading Scalping (often a subset of day trading) Position trading High-frequency trading. Within each of these, there are hundreds if not thousands of strategies. In other words, there are many different ways to day trade just as there are many ways to swing trade. It’s up to each trader to make the style his or her own. For instance, one day trader may use the 3 and 8 exponential moving averages combined with slow stochastics.

Another trader of the same style may use a 5 and 10 simple moving average with a relative strength index. Both are considered day traders, but their strategies are different. The same goes for swing trading. The endless number of indicators and methods means that no two traders are exactly alike. That’s especially true once you add human psychology as a variable. In summary, trading styles define broad groups of market participants, while strategies are specific to each trader . What is Forex Swing Trading? As the name implies, swing trading is an attempt to profit from the swings in the market. These swings are made up of two parts — the body and the swing point . As traders, it’s our job to time our entries in a way that catches the majority of each swing body .

While catching a swing point can be incredibly lucrative, it isn’t absolutely necessary. In fact, attempting to catch the extreme tops and bottoms of swings can lead to an increase in losses . The best way to approach these trades is to stay patient and wait for a price action buy or sell signal . I’ll get into those various strategies shortly. For now, just know that the swing body is the most lucrative part of any market move. Later in this lesson, I will also show you a way to use those swing points to evaluate momentum. Day Trading vs. Swing Trading. On the opposite end of the spectrum from swing trading we have day trading. These two couldn’t be further apart. As you now know, the goal with swing trading is to catch the larger swings in the market. Naturally, this requires a holding period that spans a few days to a few weeks. Day trading, on the other hand, uses very short holding periods; sometimes just a few seconds. There are other styles of trading, but these are two of the most popular.

I’ll get into some of the pros and cons of both, but first let’s take a look a simple 6-step process for swing trading. Step 1: Move to the Daily Time Frame. I spend most of my time on the daily charts. They offer a bigger picture of what’s happening with the price action and provide more reliable signals . However, not all daily time frames are created equal. I use a specific type of chart that uses a New York close. Each 24-hour session closes at 5 pm EST, which is considered the Forex market’s unofficial closing time. It is possible to use the 4-hour charts for swing trading, but I’ve found that the daily works best. My suggestion is to start with the daily time frame . Once you become profitable at swing trading with the daily, feel free to move to the 4-hour time frame. As a general rule, price action signals become more reliable as you move from the lower time frames to higher ones . Step 2: Draw Key Support and Resistance Levels. Apart from Step 1, this is the most important piece of the entire process. Think of drawing key support and resistance levels as building the foundation for your house.

It’s impossible to identify favorable swing trades without them. Before I show you some examples using swing trades, let’s define the two types of levels. Horizontal support and resistance. These are the most basic levels you want on your charts. They provide a great foundation for trading swings in the market and offer some of the best target areas. If you want to know how to draw support and resistance levels, see this post. Not all technical traders use trend lines. If I’m being honest, I have no idea why someone would ignore them, especially a swing trader. They not only offer you a way to identify entries with the trend , but they can also be used to spot reversals before they happen . Be sure to review the lesson I wrote on trend strength (see link above). It will explain everything you need to know to use trend lines in this manner.

Step 3: Evaluate Momentum. At this point, you should be on the daily time frame and have all relevant support and resistance areas marked . Remember how I mentioned using swing points to evaluate momentum earlier in the post? Well, this is where those swing highs and lows come in handy. There are three types of market momentum or lack thereof. Uptrend: Higher highs and higher lows Downtrend: Lower highs and lower lows Range: Sideways movement. A market that’s in an uptrend is carving higher highs and higher lows . Notice how each swing point is higher than the last. You want to be a buyer during bullish momentum such as this. On the opposite end of the spectrum we have a downtrend. In this case, the market is carving lower highs and lower lows . You want to be a seller here.

We’ll get into the various price action signals in the next step. Last but not least is a ranging market. As the name implies, this occurs when a market moves sideways within a range . Although the chart above has no bullish or bearish momentum, it can still generate lucrative swing trades. In fact, ranges such as the one above can often produce some of the best trades . This is mostly due to the way that support and resistance levels stand out from the surrounding price action. Just look at the two pin bars in the chart below. Step 4: Watch for Price Action Signals. Let’s review where you should be at this point. Steps 1 and 2 showed you how to identify key support and resistance levels using the daily time frame. Then in Step 3, you learned to evaluate the market’s momentum. This tells you whether the market is in an uptrend, a downtrend or range-bound. If the market is in an uptrend, you want to begin watching for buy signals from key support.

My two favorite candlestick patterns are the pin bar and engulfing bar. You can learn more about both of these signals in this post. Here is a great example of a bullish pin bar that occurred at key support during an uptrend. The goal is to use this pin bar signal to buy the market. By doing this, we can profit as the market swings upward and continues the current rally . On the flip side, if the market is in a downtrend, you want to watch for sell signals from resistance. Again, we use a signal like the pin bar to identify the swing high, also called the swing point. You might not catch the entire swing, and that’s okay. The idea is to catch as much of it as possible, but waiting for confirming price action is crucial . When looking for setups, be sure to scan your charts. Don’t make the mistake of searching for setups. Those two actions may sound similar but they are far from it. Scanning for setups is more of a qualitative process. In other words, you’re scanning for the very best setups and if you don’t find anything, that’s okay. Most traders feel like they need to find a setup each time they sit down in front of their computer. This is called searching for setups.

So remember to scan for swing trade opportunities ; never go searching for them. Step 5: Identify Exit Points. There are two rules when it comes to identifying exit points. The first rule is to define a profit target and a stop loss level . Many traders make the mistake of only identifying a target and forget about their stop loss. Don’t make that mistake. In order to calculate your risk as explained in the next step, you must have a stop loss level defined. The second rule is to identify both of these levels before risking capital . This is the only time you have a completely neutral bias. As soon as you have money at risk, that neutral stance goes out the window. It then becomes far too easy to place your exit points at levels that benefit your trade, rather than basing them on what the market is telling you. So what’s the best way to identify your exit points? Simple. Just use the support and resistance levels you identified in Step 2. Remember that bullish pin bar on the GBPUSD? (See Step 4 if you need a refresher.) Here is a simple way to determine a profit target.

In this case, the GBPUSD rallied past our target, and that’s okay. Remember that the goal is to catch the majority of the swing . We don’t need to catch the entire move to make a profit. We can do the same thing with the AUDNZD bearish pin bar from Step 4. Remember, those horizontal areas and trend lines are your foundation . Once they are on your chart, use them to your advantage. That involves watching for entries as well as determining exit points. Step 6: Calculate and Manage Risk. Once you have identified your exit points for the trade, it’s time for some risk management. Before I discuss how to identify stop loss levels and profit targets, I want to share two important concepts. The first is R-multiples. This is a way to calculate your risk using a single number. For instance, a setup with a 100 pip stop loss and a 300 pip target is 3R. Similarly, if your risk is $100 and you stand to make $500, the risk to reward ratio is 5R. The second concept I want to discuss is asymmetry . A favorable risk to reward ratio is one where the payoff is at least twice the potential loss.

Written as an R-multiple, that would be 2R or greater. You can learn about both of these concepts in greater detail in this post. When calculating the risk of any trade, the first thing you want to do is determine where you should place the stop loss. For a pin bar, the best location is above or below the tail. The same goes for a bullish or bearish engulfing pattern. A stop loss that’s approximately 10 to 20 pips above or below the candlestick being traded is a good place to start. Now that you have the stop loss placement identified, it’s time to determine the profit target. This is where those key levels come into play once more. Remember that when swing trading the goal is to catch the swings that occur between support and resistance levels. So if the market is trending higher and a bullish pin bar forms at support, ask yourself the following question. Where is the next key resistance level? The answer will not only tell you where to place your target, but will also determine whether a favorable risk to reward ratio is possible. If it is, then you may have a valid buying opportunity in front of you. If not, you may want to stay on the sideline.

Is Swing Trading Right for You? There is no right or wrong answer here. After more than a decade of trading, I found swing trades to be the most profitable. Keep in mind that I’ve tried just about every trading style and strategy under the sun. Before 2010 I experimented with everything from one-minute scalping strategies to trading Monday gaps. However, just because swing trading Forex has worked for me doesn’t mean it won’t work for you . Finding a profitable style has more to do with your personality and preferences than you may know. In fact, if your chosen style doesn’t fit your personality, you are bound to struggle. The key points below will help you decide if swing trading is right for you. You might want to be a Forex swing trader if: – You don’t mind holding trades for several days. Most Forex swing trades last anywhere from a few days to a few weeks. This means holding positions overnight and sometimes over the weekend. There are, of course, a few ways to manage the risks that accompany a longer holding period. One way is to simply close your position before the weekend if you know there is a chance for volatility such as a government election. – You want more freedom with your time. Swing trading Forex is what allowed me to start Daily Price Action in 2014. Without using this style of trading, there is no way I’d have the time to maintain this website. On average, I spend no more than 30 or 40 minutes reviewing my charts each day. Spending more time than this is unnecessary and would expose me to the risk of overtrading. – You don’t mind taking fewer trades but making more on each one. Because swing trading Forex works best on the higher time frames, opportunities are limited.

You may only get five to ten setups each month. However, the return from each one can be much greater than those who day trade. For instance, my minimum risk to reward ratio is 3R. That means for every 1% of my account balance at risk, I stand to make a 3% profit. – You’re looking for a slower paced style of trading. When it comes to trading Forex, slow isn’t a bad thing. In fact, a slower paced style like swing trading gives you more time to make decisions which leads to less stress and anxiety. So, if you’re looking for a more relaxed way to trade the market, swing trading might be the answer. – You have a full-time job or school. I wasn’t always a stay at home trader. Having the ability to trade Forex around my work schedule was a huge advantage. Had I needed to sit in front of my charts all day to watch every tick, it wouldn’t have been possible. This is the kind of freedom swing trading can offer. You might NOT want to be a Forex swing trader if: – You’re looking for an action-packed style of trading. There is nothing fast or action-packed about swing trading.

It’s a style where the slower-paced, more disciplined traders win. I will go as far as to say that if your holding period is more than a few days and your trading isn’t boring, you’re doing something wrong. – You don’t mind making a small amount on each position. As a swing trader, your average profit for a successful trade might be 2% or greater. Most day traders, on the other hand, make a much smaller amount per profitable trade. They make up for it in volume, but the return per execution is relatively small. – You can’t stand the idea of holding positions overnight. Most swings last anywhere from a few days to a few weeks. As such, swing traders will find that holding positions overnight is a common occurrence. If you can’t sleep knowing you have capital at risk or unrealized profit at stake, then swing trading might not be for you. – You need to know if you’re right or wrong immediately. I have held several positions for over a month. Some have even lasted for two or three months, particularly when I’ve traded a reversal on the weekly time frame. Longer-term trades such as this require patience.

It may take several days, weeks, and sometimes months before you know if your analysis was correct. That said, trailing your stop loss to lock in some profit along the way does help to relieve most of that pressure. – You get anxious when trades go against you. In most cases, the market won’t take off in your intended direction right away. Drawdown is something all traders have to deal with regardless of how they approach the markets. However, drawdown can last longer for a swing trader. It doesn’t mean you stand to lose more money, but positions can remain negative much longer than if you were day trading. Forex swing trading is one of the most popular trading styles around, and for good reason. It allows for a less stressful trading environment while still producing incredible returns. It’s also great if you have a day job or school to attend.

Having accurate levels is perhaps the most important factor. If you can’t rely on the support and resistance levels on your chart, you won’t be able to trade with confidence. In my experience, the daily time frame provides the best signals . Just make sure you use New York close charts where each session ends at 5 pm EST. Check with your broker to be sure. The best way to remove emotions from trading and ensure a rational approach to the markets is to identify exit points in advance . If you wait until you have an open position, it’s too late. Above all, stay patient . Remember that it only takes one good swing trade each month to make considerable returns. Are you ready to start swing trading the Forex market? If so, you definitely want to download the free Forex swing trading PDF that I just created. It contains the 6-step process I use. And if you’re unsure whether this style of trading is right for you, it will help with that too. Click the link below and enter your email to get instant access to the cheat sheet. Great inside, i m practising this strategy lately. It’s a great way to trade just about any market.

Let me know if you have questions. What a great information, it’s a real catedra. Congratulations. Pleased you enjoyed it, Alfonso. Cheers. Great post as usual Justin. Impressive trading style explained wonderfully.. Glad to hear that. Thanks for commenting. Excellent work. Thank you providing free info. Anytime, Bedin. Feel free to reach out if you have questions. Swing trading for life!

I don’t want stress I get enough of that at work.! Totally with you on that one, Roy! Hi Roy, it is by far the best approach for a less stressful trading experience. Just my opinion, of course. Good way of teaching. I would like to make an investment with you if you would like to do it for both of our benefits ensuring slow and steady profits. Pleased you liked it. Another helpful article and more confirmation that I am in the right place with Daily Price Action. Swing trading very much fits around my lifestyle, although this week was the first week I had held a trade for more than a day, which had me checking my charts more often than is healthy! I much prefer the pace of swing trading the daily charts and the time you get to analyse trades before pulling the trigger. I still can’t believe how much decent free content you publish, way more than your average expensive course. Cheers for the help and I’ll see you in the forum. Great to hear, Dan. The extra time to evaluate setups along with market conditions is one of my favorite aspects of swing trading. Thanks for sharing. Cheers.

You’re very welcome. Hi Justin, you are there at it again, what a wonderful expository post. I will start the practice right away because it suits my personality. Thanks for the kind words, Euphemia. Glad you enjoyed it. Thank you Justin for your wonderful clear and concise presentation on swing trading. I am an ex trader that needed to get back in the ‘swing” of things and felt it was very difficult to get into since I left. Not only did I think it was an easy read: clear, concise, simple, no fluff… , but it also gave me confidence in re-understanding the forex market and having a straight line to trying swing trading again possibly along with pre-Elliott Wave theory I learned from an old mentor I had. 5 star rating. Many many thanks with best regards. You’re welcome, Daniel. Feel free to reach out with any questions as you transition back to the trading lifestyle.

Clear and concise delivery on how to trade using Price Action. Thank you Justin. All the best. Thanks, David. Always happy to help. How do i upload a picture here mr……. Swing-trading with options is more lucrative, but you can’t stay on too long. 1-4 days tops. Less if the option has just a week left. Get a slightly out of the money strike.

Divergence gets you in before the move usually and lack of time gets you out fast. That’s how 500 bucks becomes 3K in 48 hours. If you’re risking more bucks then buy options with 4-6 weeks and play the same divergence game. Exit in a week or two if you’re deep in the money. That’s how 5K turns into 40K in a week. Put at 30 to 50 % your risk capital. That’s one inspiring and educational topic ever read ??. Thanks Justin. You’re welcome.

Glad to hear that. Thanks Justin for information. You just make trading simpler for me. I value your input. Keep well! You’re welcome. I always try to keep things simple. It’s good to hear that it’s working. Cheers. Great refresher lesson Justin, thanks. You’re welcome, Vincenzo.

Thank you for all your patient teachings. When it comes to drawing support & resistance levels, how can one utilise the Fibonacci tool? Won’t the Fibonacci levels always be the same as the support & resistance levels? Danita, the post below will help. Cheers. awsome post your hellp as a technical expert is valuable to us. if i want to hold position for more than 6 months is it good to use monthly time frame. The holding period won’t necessarily dictate the time frame you use. It comes down to how you define your targets and whether the strategy you’re using works best on the daily, weekly or monthly charts. Thanks Justin for this free forex education i am better now and i can see the progress, All i need is to join the community. It’s my pleasure. Let me know if you have any questions. Thanks for stopping by. I used to think swing trading and day trading is one and the same thing, now I know on which side I belong, thanks Jb. Good article Thanks for sharing great information of Forex Swing Trading. Hi Justin I have been missing out on profits with my trades by not identifying a target.

I have gone trough your Forex Swing Trading lessons which has cleared my mind but what I would like to know is whether I should move my stop to the resistance or support area when the price has moved beyond Kind Regards Andre. I like a bit of both swing & action trading can you give more info on 4H swing trading. Since I have been using price action ( which you showed me) my trading has become more stable less losses. Thanks Justin. You’re welcome. I don’t do too much on the 4-hour charts these days. Ah, nice article. It improves my confidence in daily price action trading which consist swing trading. Thanks again Sir. WoW..This is great and awesome work Justin..Patience pays and i believe this trading style fits me perfectly, plus the best things in life are free and you’re not charging anything at all..Thank you very much for this..

I’ve been demo-ing and looks great, i just “set it and forget it” its been a week now and i am about $250 in profit on the EURNZD short trade i took on the daily, i mean i couldn’t make that much before through day trading unless i risk by taking multiple multiple orders on one trade but swing trading only one order risking 3% got me up that much and trailed my stop loss and locked in at least $100..February 2018 am officially adopting this trading style and its highly profitable.. Thanks once again Justin. Greetings guys. I’ve been trading for the past 2 years. its really been a bumpy road since i went the self taught route. i really would love to receive any form of help from someone who has found success in this market. Be it advice, books to read or anything that can help me move forward. Hi Mr Bennett, I’m new. When you say l go to daily frame, all l know there is that the action is shown by one candle or a bar. Please help. You are a great teach, God bless you with more knowledge, looking forward to join the forum. Justin, you always explain these forex concepts with great clarity. Thanks for sharing your knowledge! Thanks. As a swing trader can Fibonacci be used to identify the reversals?

If yes how do you know when to use Fibonacci and how it works? Justin valuable information, I’m in the process of training and it’s been almost three years of learning and I’ve spent a few months just dedicated to swing operations and my trading has improved ostensibly, not only for the psychological part but for the different way of seeing the market. I work a very small real account but I hope to increase it in the future. I have a question in my operation I only look at the daily charts as a reference, I rely on 4H graphics, do you think I’m doing well? or should I get used to handling D. Thank you for the valuable information you share, see you. I apologize for the English but I use google translator. Thanks. This was quite informative. You should write a book with all this info. if you check the whole site. coach has a wealth of information in how to become a profitable trader.

Thanks i needed a boost i was lacking a little of these. hi justin. I am interested in the Forex swing trading course and i deposited your account for $ 7.but I still did not receive the course. please check it. thank you so much for this priceless information. i just came into learning how to trade forex last week. i will very much appreciate your support any time. God bless. Great post my boss hope one day I will be under your mentorship. Hi Thanks for the content. I just wanted to ask, in your opinion, is it wise to focus on a few pairs or should i scan as many pairs as possible for set ups? Yes I also love that question. Hi there.. i would like to be a swing trader. Thank you sir. I like holding trade for some time and with this content, I no it will help me become a better trader and swing trader. Mr. Bennett i there a way to upload a picture here please…….

there’s some chart that i tried to plot s&r, i want you to see if am right or wrong…. Very proud to be part of this noble lessons. Please may i ask if it will be good using the zigzag indicator on meta trader platform to get the swing high and low. thanks. Trade broken to the understanding of a novice. Swing trade will be my course. I really love this Justin. Disclaimer: Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Daily Price Action, its employees, directors or fellow members. Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose.

This website is neither a solicitation nor an offer to BuySell futures, spot forex, cfd's, options or other financial products. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. High Risk Warning: Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. Copyright 2018 by Daily Price Action, LLC. Please log in again. The login page will open in a new window.

After logging in you can close it and return to this page. The Only 3 Forex Chart Patterns You Need to Know (and Why I Trade Them) There are a million ways to make money in the Forex market. The key to success in this business is not finding one that works, it’s finding one that works for you . While I started out in 2007 trading nothing but pin bars and inside bars, my “style” today is quite different. Put simply, the way I trade today is much more robust than it was in 2007. Today, I still trade pin bars and inside bars, however over the years I have expanded my trading plan to also include a few choice technical patterns. Why trade these Forex chart patterns in addition to candlestick formations? Think of it like this. Before a developer begins building a mall, big-name shopping stores are signed on in order to provide the best experience possible to shoppers. These are called “anchor stores”.

In a similar manner, the three chart patterns below can become the “anchors” to your trading plan. These are the formations that you can rely on to generate profits on a consistent basis. Exclusive Bonus: Download the Forex chart patterns PDF that will show you exactly how I trade the 3 chart patterns below. Of course they are not the only price structures out there, however, they are the ones that I have come to enjoy trading the most over the years. So without further ado, let’s get started! The Head and Shoulders (and Inverse) This is not only my favorite reversal pattern, but it is also my favorite pattern, period. That includes its inverse, which has similar mannerisms. For those who have followed me for a while now, you may recall that my favorite pattern to trade used to be the wedge. However, the last year of trading has produced a new winner in my book. The head and shoulders is the least common of the three formations we will discuss today. While there may be similar price structures that occur more frequently, a valid and therefore tradable head and shoulders reversal doesn’t come around very often. Put simply, it works.

But more than that, it can be quite easy to spot and extremely profitable when you know what to look for and how to trade it. The pattern can offer a precise entry given the fact that the neckline is generally based on several highs or lows. This fact alone takes a lot of the guesswork out of determining when the pattern has confirmed. Another huge benefit, like the other two technical formations below, is that we have a measured objective from which to identify a possible target. Staying out of Trouble. This is something that you may not know (unless of course you’re one of my members). In order to be considered valid, the two shoulders of the pattern must overlap at some point. Situations where the shoulders don’t overlap are most common when the pattern unfolds at a steep angle. While a break of the trend line (if one exists) may trigger a change in trend, it does not fit the criteria to be called, or traded as, a head and shoulders pattern. Notice how no part of the first shoulder in the illustration above overlaps the second shoulder. This disqualifies the price structure from being traded as a head and shoulders pattern. Another common mistake among Forex traders is to use a measured objective as a “one-stop shop”. In other words, they simply measure out the distance in pips and then set a pending order to book profits at that level. While that may occasionally work out in your favor, a much better approach is to determine whether or not that objective lines up with a pre-existing key level.

If it does, perfect, however a more common scenario is one where the market will come in contact with a key level prior to reaching the objective. If this is the case, you’re far better off taking profit at the key level rather than hoping for an extended move to the objective. Remember that technical analysis is not a perfect science and there are no guarantees, so there’s no sense to risk losing an unrealized gain of 500 pips in order to make an extra 50 pips in profit. Last but not least, the head and shoulders is best traded on the 4-hour chart or higher. However, I have found that the best price structures tend to form on the daily time frame. A formation on the 1-hour chart or lower should always be ignored, regardless of how well-defined the structure may be. As the name implies, the wedge is a technical pattern in which price moves into a narrowing formation, also called a triangle. Unlike the head and shoulders we just discussed, the wedge is most often viewed as a continuation pattern. This means that once broken, price tends to move in the direction of the preceding trend. That said, it’s important not to get caught up in trying to predict a future direction while the pattern is still intact. Only once support or resistance is broken should you begin to identify possible targets. The wedge was one of the first Forex chart patterns I began trading shortly after I entered the market in 2007. By 2010, I had not only become proficient in trading them, but I had also developed the intuition necessary to identify the most profitable formations – something that can only be had after years of practice.

The really great wedge patterns don’t come around all that often. By “really great”, I’m referring to the ones that form on the daily chart. While you can trade these on the 4-hour time frame, in my experience the most lucrative trade setups form on the daily time frame. Wedges tend to play out relatively quickly compared to something like the head and shoulders pattern. However, they also allow for an advantageous risk to reward ratio, especially the larger structures that form on the daily chart. This combination allows you to secure a nice profit in a relatively short period of time. So although they don’t come around all that often, wedges should certainly be something that you watch for during extended periods of consolidation. Staying out of Trouble. There are three common mistakes I see traders making when it comes to trading the wedge. The first and perhaps most prevalent is trying to force support and resistance levels to fit. In fact, this is a common issue I see across all of trading, not just wedges. As I always say, if a level is not extremely obvious, it should be ignored. The three points in the illustration above are clearly not inline with the upper and lower levels of consolidation, which invalidates the formation in terms of “tradability”.

The second mistake I see among traders is attempting to trade a wedge on a lower time frame. While these formations may occur more often, they won’t be nearly as reliable or effective as the price structures that form on the daily time frame. Last but not least is the issue of timing. As you may well know, timing is a key factor if you wish to succeed in the world of Forex. And when it comes to wedge patterns, timing is everything. More often than not, when this pattern breaks, the market will retest the broken level as new support or resistance. This retest offers the perfect opportunity for an entry, however it does take patience to achieve. Be careful of entering on the first closed candle outside of the pattern as you will likely get a retrace of some sort. This will not only give you a more favorable entry, but it will also help you avoid making an emotional decision about exiting the position in the event you entered prematurely. The Bull and Bear Flag. The bull or bear flag is another name for a channel. However, by adding “bull” or “bear” to the designation, we’re giving it a directional bias.

So as you might expect, it is most often traded as a continuation pattern. Like the head and shoulders, flags often form after an extended move up or down and represent a period of consolidation. It’s essentially an indecision point in the market, where the bulls and bears are battling to see who will win control. I feel confident in saying that you could literally trade nothing but bull and bear flags and make very good money in the Forex market. This, of course, assumes that you have become a proficient price action trader. Why do I think so? There are a few reasons, but mostly due to the fact that these formations occur quite often. This is true even if you are trading the higher time frames. Of course when I say “quite often”, I’m referring to a few times per month, at most. That said, you only need one profitable trade each month to make good money as a Forex trader. If that one good trade comes in the form of a bullish or bearish flag pattern, it is likely to have an extremely favorable risk to reward ratio attached to it. This is another reason why I love having this price structure included in my trading plan. The measured objective in this case often allows for several hundred pips on most currency pairs. Combine that with a precise entry and a well-placed stop loss that is 50 to 100 pips away, and you have a recipe for a profit potential of 3R or better just about every time. Staying out of Trouble.

Like the other patterns above, there are a few things you should watch out for when trading this formation. The first is perhaps the most obvious – never cut off the highs or lows in order to make the channel fit. If it isn’t obvious before you even draw the channel tool on your chart, it isn’t likely something you’ll want to trade. The illustration below shows price action that you would want to ignore completely. Notice how the two points above don’t match up with support and resistance. Calculating the measured objective also tends to give traders fits. Just remember that the measurement should include the consolidating price action. The correct measurement in the illustration above covers the entire “flag pole”, not just the price action leading up to the consolidation. Using chart patterns to trade the Forex market isn’t for everyone. However, if you enjoy using raw price action to identify opportunities, the three formations above would make a great addition to your trading plan. You don’t have to know and trade every price structure available in order to make consistent gains as a Forex trader. Doing so will only slow the learning process and also send you chasing trades in every which direction. Becoming a successful trader is about finding an approach to the markets that fits your style, defining your trading plan and then refining those rules as you gain experience. So if you enjoy trading technical patterns, as I do, be sure to give some consideration to the three we just covered; they truly are all you need to become consistently profitable. Are you ready to start using the chart patterns above? If so, you definitely want to download the free Forex chart patterns PDF that I just created.

It contains all three price structures you studied above and includes the characteristics I look for as well as entry rules and stop loss strategies. Click the link below and enter your email to get instant access to the cheat sheet. I’m a fan of these patterns too, thanks to your teaching. These three patterns are easy to spot, simple to trade and highly effective. Kiwi, absolutely! They really are the only three patterns you need to become profitable. Hi Justin, thank you for your great and consistent work. Can this flag be valid? Doesn’t look to be, just confirming. Having read a previous post re: this pair and the h&s pattern that now seems to be realized, this q aims to define the invalidation point of the certain - appears to be - bullish flag. I wouldn’t call that a flag.

The touches off of support and resistance aren’t very well defined. Awesome post Justin. What I like about these patterns is that once they form on the charts they are for the most part consistent and predictable. You’re not going to win 100% of the time with them, but as I said they are consistent and do perform well. My favorite one is the pennant. I love the way it bounces or rockets in its intended direction. It is a pattern that I myself is comfortable with and even teach it to my clients. Stick with what works for you and you’ll get consistent results. I hope you all have a magnificent day on PURPOSE!

Tareeq, you got it! There is no approach to trading that will work 100% of the time. It’s about finding something that fits your style, developing an edge that stacks the odds in your favor and always maintaining a favorable risk to reward ratio. It doesn’t happen overnight but it does work given the right amount of time, effort and patience. Real world trading looks very different to nicely drawn illustrations. Maybe if you offered trade examples from actual trading within a third-party verified account you could be taken seriously. The thing is this: my five year old niece does drawings similar to those in this article. But she’s no trader. I would’ve expected something different from a guy who calls himself a professional trader and who has ads in Forbes and Washington Post (that’s how I landed here). Hi JLTrader, perhaps you should have a look around the site before making such a drastic judgement call. The reason I used these drawings in this lesson is simply because it’s easier to explain the patterns. If you want “real-world trading” examples, have a look at the following links: These are but a few of the real-world examples I publish every week. Have a good one. They work. Over 80% success on trades taken on these patterns.

When people are buying signals they are buying tips on these patterns. It’s a shame considering that a five year old can trade these patterns and make money especially on longer (4H and greater-especially 1D time frames). Justin, I am regular reader of your blog, I want to know that the patterns you explained is only for forex or can be applied in any instrument like commodities or stocks. Anil, these patterns can be effective in any market so long as there is sufficient liquidity. Good job ! Thanks for the lesson. I’ll surely try them out. You’re welcome, Hendrix. Let me know if you have any questions. I’m interested of this pattern of trading and I’m trying it, thank you for this nice and clear explanation. Thank you for this nice and clear explanation. Hi, Justin, Thank You for all done.

It’s realy help me learn price action. Great work. Thank you very much….you make it easier for us. If the price action doesn’t retest the broken level, at how many pips would one consider the break not a fake? Great price pattern . Thanks for the lesson. Great price pattern. Thanks for the lesson. wow! good explanation. In your article, you said both Wedge and Flag are most viewed as “Continuation” pattern. For what I have known, continuation or not should take the combination of 1)The trend type before the Wedge or Flag and 2) The formation type of Wedge or Flag into consideration. Say for example, if the previous trend is “up” and the flag is “ascending”, this flag pattern is most viewed as a “Reversal” pattern. Same applied to Wedge. If you agree with that , I will be very happy to see you updated this great article to make it more complete.

Anyway, this is a great pattern article for beginners. Keep you good work! Thanks very much…I can’t waiting to get fantastic skills please help me to know forex trick..From East Africa (Tanzania) Disclaimer: Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Daily Price Action, its employees, directors or fellow members. Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to BuySell futures, spot forex, cfd's, options or other financial products. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. High Risk Warning: Forex, Futures, and Options trading has large potential rewards, but also large potential risks.

The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. Copyright 2018 by Daily Price Action, LLC. Please log in again. The login page will open in a new window. After logging in you can close it and return to this page.



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