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!