Heikin-ashi and japanese candlesticks

Heikin-ashi candles are the perfect candles for trend traders.

Not only they smooth out the entire market picture, they are able to keep a trader in alignment with a trend.

Heikin candles have two colors: red and blue. Red - for bearish trends, blue - for bullish.

There is nothing simplier than reading heikin-ashi candles: just look at the color of the candle.

Regular charts:



Heikin-ashi charts:



Also keep an eye on the candle structure: a shaved bottom for bullish candlestick confirms that uptrend is still going. Same as shaved top for bearish candlestick confirms a downtrend continuation.

Trail stops alongside last candlestick body. Change trends when heikin-ashi does and be happy ith trading these amazing candlesticks!

A star or a doji - two great candlesticks in Forex charts

Almost every Forex trader knows what the terms "Star" and "Doji" means in Forex. They characterize special candlestick formations on forex price charts.
If you are hearing about stars and dojies for the first time, check out these resources for the reference:

Forex chart candlesticks
Introduction to candlesticks



Both Dogi and Star candles are the great indicators of trend beginning and ending.
They literally tell that one of the forces on the market (either bulls or bears) is giving up and another is getting stronger.

Many Forex traders like using only chart prices to make decisions about entries and exits. In such trading technique candlestick formations like Stars and Dojies play one of the key roles.

However, trading Forex with Stars and Dojies isn't simply about taking every reverse candlestick - Doji or Star - into consideration. The rules are needed in order to pick the right Star or Doji. What are those rules?

Will be continued next month.
good luck and good profits in Forex!

Are you trading Forex during the right hours?

You may have never payed attention to it before, but many good Forex strategies used by traders are bound to fail if traded during wrong market hours.

That's right. Forex market is not all even throughout the day, even though it can be traded 24 hours a day. There are times when trading volume is high and times when there is very little going on on the market.

Forex market hours are split into 4 major time periods:

London session - 3:00 am to 12:00 noon EST
New York session - 8:00 am to 5:00 pm EST
Australian session - 5:00 pm to 2:00 am EST
Asian session - 7:00 pm to 4:00 am EST

The most active trading hours belong to London and New York sessions.
During these sessions currency pairs trend and move the most allowing Forex traders to benefit from price shifts. This high activity is addressed to the fact that London and New York are the major global trading markets so far with highest number of participants.

Trading during active trading periods provide traders additional edge to the success of their trading methods.
Trading during less active trading sessions may not be suitable for all trading styles and systems traded.

Additional note can be made, that if you have been trading without proper studying of market hours and for some reason your strategy produces poor results, it is a wise idea to try it out again, but this time trading during London and New York trading sessions.

The good and free tool to check on Forex trading hours can be found at http://www.forexmarkethours.com/

See you on the profitable side!

How Forex traders tell when a trend has paused or about to reverse?

Forex traders may identify early warnings of a trend weakening and possibly reversing with a help of number of Forex indicators.

Let's focus on two of them: EMA and Bill Williams Accelerator Oscillator.

Use any of three or four EMAs, for example, 10EMA, 20EMA, 50EMA and 200EMA or 5, 13, 34EMA and 100EMA etc.
When all four EMAs align in a proper order, e.g. for the uptrend we want 10EMA to be above 20 EMA while 20 EMA is above 50 EMA and 50 is above 200EMA. A trend is considered to be weakening or pausing when at least one of the moving averages is no longer staying in its proper place.

Opposite will be true for the downtrend.



For Bill Williams Accelerator Oscillator we look at acceleration of a downtrend marked by a red bars in the indicator window. Once a trend has found a support, it pauses and so we get a signals about currently weakening trend in the form of a green bar on AO.

Best of luck in Forex trading!

What to do if you can't win in Forex?

It is frustrating to read day after day testimonials of users who declare profits in Forex while your account is loosing its weight... What to do if you cannot win in Forex?

I think that we all know how to analyze our mistakes, therefore, there is no reason to speak about it. Let's talk about practical things that may enhance your trading performance and help to get out of a circle of losses in Forex.

First, leave only those indicators and rules you are most confident in, clean all other tools, indicators from your Forex chart, eliminate some "shaky" trading rules. Instead of those try to implement new ones.

Look what's missing, what would help you to achieve better performance? Once you found a target, go online and search for answers. Among first thing I would do is looking for some newly available custom indicators for MT4. Even if you don't trade with MetaTrader, you may register a demo account and run some good custom indicators, that would help you to improve your Forex strategy.

Second, make sure you decrease the lot size you trade with. When a streak of losing trades come it is better to refrain from trading large positions and regain strength by trading smaller once.

Third, for some traders who do not solely rely on indicators and rules, who uses intuition an judgment of common sense, analyze your emotional and physical conditions, it may be the case you are tired. Then a week of resting away from Forex is the best option. Plus after a week has passed with the new market data you may get new ideas as to how to approach new market conditions.

And if nothing helps, start demo trading with a new system, there plenty of ideas on the internet (like a good collection at Trading naked and at Forex strategies revealed) it might turn even more profitable and stable than your previous system.

Trading and winning is what I wish you!

Reading Forex charts: inside bar and engulfing bar

Among variety of Forex chart patterns and bar combinations, let's talk about such chart setup as "inside bar" and "engulfing bar".

Inside bar is a bar that has high, low and close all withing the body size of the previous bar.



Although this type of bar combination can be spotted on any time frame, Forex traders like to see it on at least hourly charts and more preferably on daily or weekly charts.

How to trade inside bar pattern?
Inside bar suggests accumulating power of the market that so far was not able to decide on further direction.
Traders should look for the breakout of the inside bar price range to either of the sides and trade in the direction of that breakout.

Engulfing bar is a bar that totally covers its preceding bar.



This bar can be seen in the beginning of a new trend and suggests about a serious strength of one side of the market that dominated and "created" such bar.

How to trade engulfing bar in Forex?

Once a pattern is spotted, and a candle is closed, take a trade in the direction of the engulfing bar.

Profitable Forex adventure!

How much do you know about real Forex?

Got this challenging question today.

Searched for answers and found, imho, the Darkest Forex website with exact phrase :))



:)
There is so much more stuff to read about Real Forex there. And although it is fun, the guy touches there very important Forex topics.
Actually, he calls himself Lord of Darkness :)))

I'd recommend reading his posts one day, especially to Forex newbies to shake their beliefs a bit and shatter some naive illusions.
Good work your darkest Majesty :))