Rate Hike Unlikely on Slowing US Economy | Trading Forex
According to the Commerce Department, retail sales barely rose in September, edging up only 0.1 percent last month largely due to cheaper gasoline which pushed gas station receipts down 3.2 percent. Producer prices reported their biggest decline in eight months.
The Commerce Department report showed that retail sales excluding automobiles, gasoline, building materials and food services slipped 0.1 percent last month after a downwardly revised 0.2 percent gain in August.
Reports show that the economy has been losing momentum as a result of a dollar that has strengthened against other major currencies, sluggish global growth and lower oil prices that are impeding capital spending in the energy sector. All these factors have contributed to a halt in job growth in the past two months.
No Rate Hike Foreseen
According to Paul Ashworth, chief U.S. economist at Capital Economics in Toronto, "The softness of September's figures supports our view that the Fed probably isn't going to hike interest rates until early next year."The Commerce Department report also showed that business inventories remained unchanged again in August, triggering JPMorgan to cut its third-quarter GDP estimate by half a percentage point to an annual rate of 1 percent.
The economy grew only 3.9 percent in the second quarter while discretionary spending, which could provide some cushioning against weakening global growth, remained somewhat healthy as consumers bought automobiles and furniture and spent more on hobbies, clothing and dining out.
How to Trade Forex with Fire Lines | Trading Forex
Trading is, without a doubt, one of the most alluring and exciting professions an individual could ever embark upon. It is also, arguably, one of the most dangerous. A career as a trader can be over in a heartbeat if the trader has not been properly educated to the market’s fickle ways. It is the potential of unlimited riches and income that seduce so many, yet the odds of success are heavily stacked against them. What is it that makes the difference? Why do so few succeed, where most others fail? The answer can be summed up in four words: discipline, education, hard work. It is the purpose of this article to equip you, the budding trader, with some of the education necessary to help you put the odds of succeeding in your favor. As for the discipline and hard work part, that is up to you. I would be willing to guess that success in trading is probably close to 10% knowledge and 90% discipline/hard work. Perhaps this is why the "mortality" rate of would-be-traders is so high. Not everyone is suited to short-term trading. Many brilliant people have been shot down in flames while trading. My theory is that they try to out think the market, out maneuver it. They also try to re-invent tried-and-true trade plans and end up making things more complicated than they need to be. Both are usually very bad ideas, which for the most part, end up failing, and worse, lightening your wallet, sometimes by quite a lot! I mention this only to make a point. That being true, the trading method you are about to learn about here in these pages, has been developed, traded, optimized and adapted in the real world of trading. This program is not some theoretical algorithm that some mathematician somewhere has dreamt up. No, this plan has earned its stripes the hard way. Through blood, sweat, and tears, through failures and success. It is the backbone of how I personally trade.
Getting Ready to Trade
It would probably be wise at this point to have a little discussion on a few important and key elements to our trade plan before we jump into the trading rules and setups themselves. These would be; our primary tool - the chart, which markets to trade and why, the individual - that being you, and lastly, funding and risk.The Chart - Part 1
The chart that we tend to favor for this style of trading is what's known as a candlestick chart. Because of how it is physically constructed, it is very easy to read and interpret in the chaos of a trading frenzy. We'll take a closer look at it shortly.Which Market
Now comes the important decision as to what, or, which of the many markets to trade. Not all markets are suitable to the average trader to trade, and not all are created equal. When it comes to short term trading, there are three market traits that the individual must pay very close attention to and look out for before he / she begins trading it.They are as follows:
Liquidity - Any market under consideration for trading must be liquid. That meaning, look for markets that are highly active with many various participants and creating a large amount of trading volume. High volume on its own, does not guarantee liquidity, it is the volume spread out, or distributed over a vast number of traders, each with different agendas, that allows for the almost immediate execution of buy and sell orders.
Smoothness - What we as short term traders are looking for in a market is nice orderly movement of price. We stay clear of erratic, jumpy markets at all costs. Consistency, smoothness and "predictability" of price behavior are what you should be looking for. Markets with a history of wide gaps in prices, large and meaningless price swings, or otherwise just chop, with prices moving back and forth, going nowhere, should be avoided like the plaque!
Range - Lastly, the market must have enough room, or range to make trading it worthwhile. Look for markets that have at least a 750.00 dollar trading range top to bottom, on a consistent basis. With this size range, there should be adequate opportunities and potential to profit and cover the associated costs of trading.
You
As briefly touched upon during the introduction, many clever people are just not suited to trading. Each individual must make an honest evaluation of him / herself before putting hard earned money, and precious time on the line. It is just a fact that a lot of people just don't have the mindset or the emotional makeup for trading. For some, the ups and downs of trading swings are just too much to deal with. It is just a personality trait, simple as that. Also, a trader must be prepared for long, lonely hours sitting in front of, and staring at a computer screen. If you like or need to be in the presence of others while working, trading may not be for you. Take a good hard look at yourself, is trading really for me?Funding and Risk
Like any other business, you need capital to start with. How much capital you have to work with will dictate what markets you can trade. The more volatile a market, the more risk you will need to assume to trade it. It is therefore imperative to be properly funded with a strict money/risk management plan in place. If you don’t, do not trade until you do!The Chart - Part 2
Ok, let us delve a little deeper into the chart itself. The chart is simply a graphical and dynamic representation of the supply, demand and price characteristics of the market at any given point in time. It can also convey to us, the "mood" or the psychology of that particular market - again, at any given point in time or price level. Price, direction, and trend are what we need to know in order to place our orders intelligently and give us the highest probability to profit from a given trade. This is what the charts help us to do. The chart itself is made up of individual "candles" or price bars. Each of these candles show to us the price movement over the given candles duration.For most of this essay, we will be using 15-minute candle stick charts, thus, each candle will represent 15 minutes of price action. Let us now look and see how the candle itself is constructed.
Example 1
Let’s take a look at the Bullish Candle (below) first.The candle is made up of 3 parts, the Body, the Wick, and the Tail. The distance between the top of the wick and the bottom of the tail is the entire range of price that occurred in the market during that 15-minute period. The bottom of the body was the price of the first trade made, and top of the body was the last trade made, for that 15-minute interval, hence the term open and close respectively. With a bullish candle, since prices closed higher than where they opened, then obviously, prices had to have been rising. Conversely, the Bearish Candle, “see below”, has its opening price higher than its closing price, therefore indicating prices fell during that period.
Depending on which charting software you use, bullish candles are usually either clear or green in color, while bearish candles will be filled, or red in color. In fact, nowadays, you can make the candles any color you wish.
There is a third, and very rare candle that we look for, and that is the "Doji" candle. This candle opens and closes at the same price (or within a tick or 2 of each other). This is usually neutral as far as the market is concerned, prices are content where they are with one exception. If the Doji candle occurs as a “swing” high or a “swing” low point on the chart, they more often than not signal a market reversal is about to occur. Prices have a high probability of turning around and moving in the opposite direction. Keep your eyes peeled for them, especially in the vicinity of one of our Fire Lines!
Fire Lines
Fire Lines are our statistical proprietary indicator that we use to produce price levels or price points, where we expect to see a lot of significant intraday trading activity, as well as to determine the likely trend of the price action for that particular day. Fire Lines typically identify areas where prices will be supported in a down trend, or resisted in an uptrend. It is at these levels that we seek to trade at. It is here, that we can enter the market with the least amount of risk and the greatest amount of potential.And now for a few definitions:
Inflection Point (I.P.): This is our strongest level and the point at which, if crossed, we expect the trend to change. As a rule of thumb, if prices are above the IP, the market is deemed to be bullish, if prices are below the IP, the market is considered bearish.
Upper Value Range (U.V.R.): The highest price level we would expect to see the market trade at on a given, non-trending day. Very bullish if prices are at or above this level - a great place to initiate a long position from.
Lower Value Range (L.V.R.): The lowest price level we would expect to see the market trade at on a given, non-trending day. Very bearish if prices are at or below this level - a great place to initiate a short position from.
Targets and Objectives: The prices or levels we would expect the market to reach should the current trend continue. At these levels we can look for a trade, however most of the time we are already in one by the time these areas are reached! As such, we just call them targets, or objectives. They can sometimes also provide re-entry points for those days that are trending strongly, or a place to add size to winning positions.
The “Abattoir”: A French word meaning slaughterhouse. I use it to describe the area between the moving average and a Fire Line. A trader, as a general rule, does not want to initiate a trade in this area as it is prone to giving false signals and whipsaw - like price action. Basically an area of consolidation where no tradable trend is present.
So those, in a nutshell are the Fire Lines.
Simple Moving Average (SMA): Essentially a trend following measurement. An arithmetic mean of the number of periods assigned to it. e.g. A 96 SMA on our chart will sum and average the price data of the last 96 candles and plot it on the chart as a line.
Now for the Meat of It - A Typical Day
The first thing to do is to prepare your chart for the next trading session. I suggest just putting on the UVR, the IP, and the LVR lines only at first so your chart remains uncluttered and you can more clearly see what’s going on as prices begin to move. Of course, make sure your moving average is on the chart as well. The example below is pretty much how I have my chart set up going into the next trading session.Non-Trending and Dangerous
Ok, let us examine the chart above and see what story it is trying to tell us.
Starting from the left hand side, notice how prices rapidly climb higher, go through the UVR (1st black arrow), and then just as quickly retreat. In fact, they fell back below the LVR where that level then became resistance (2 purple arrows). This is exactly the type of price action that gets so many new traders into trouble. When things get volatile, the adrenalin begins to flow and thoughts of fast and easy money fills their heads. For some strange reason, the thoughts of fast and easy losses never get thought about. Perhaps it is our optimistic nature as human beings, however optimism should NEVER be the basis of any one individual trade, be that getting into, or staying in a position. Optimism about ones trading, absolutely, but never when it comes to a trade! Risk management is what you need to focus on a day-to-day basis, and above average, unexplained volatility is usually a warning sign to stay away!
Now for the “Abattoir”
This is really not a big deal as it can be very easily recognized and avoided by following one very simple rule. DO NOT ENTER INTO A TRADE IF THE PRICE IS BETWEEN ANY OF THE FIRE LINES AND THE 96 SMA. Way more often than not, price will just bounce around between the levels, not a place where you want to be vulnerable and at risk. Sooner or later one side or the other will yield, and that’s when you want to play. Let the gamblers fight the battle, we’ll come in after the battle has been won on the side of the victors, and ride on their coat tails! Not glamourous or pretty, but usually highly profitable with little risk.And Finally, the “Range”
This is the defined area between the Upper and Lower Value Range levels. (U.V.R and L.V.R.) Just like the “Abattoir”, this area can be subject to wild price gyrations and very erratic price movement. Typically, not a terrific spot to trade in. Having said that however, every once and awhile you can sometimes get a trade from the Inflection Point to either the U.V.R. or the L.V.R. depending on the trend, and of course depending on the stop size, or risk. But, as a general rule, trading within this range is dangerous and not recommended.One last note on this chart. Notice both the U.V.R. and the L.V.R. get broken and then prices quickly return back inside the range (marked by black arrows). We don’t want to immediately initiate a trade when our levels are broken but instead wait to see if the broken level begins to act as support, as in the case of the U.V.R. breaking or becomes resistance, in the case of the L.V.R. being penetrated. We look for what we like to call, BHG (Break, Hold, and Go) before trading.
Here is an example of how I like to make a trade, in this case, a short in a strong down trend.
First thing to notice are the little green bubbles. See how at those points prices are coming to the Fire Lines and being repelled by them? The subsequent high and low swings now become perfect entry levels for us. As an example, we can see a swing low as marked by the light blue arrow. The following candle attempts to rally but is defeated... the selling pressure is still on. Therefore, we can quite safely place our sell order just below the marked swing low (broken blue line) with an initial objective of the 2nd Target. It is at these swing highs and lows (or very close to) at our Fire Lines that we seek to trade from.
Very often however, you just cannot get onto a trade safely. Notice the black arrow.
It is pointing towards a candle whose range is much larger than that of the other candles around it... a volatile situation likely caused by a news item or economic report. In this case the risks are just far too great relative to the potential rewards to try and trade it. The smart traders will likely retreat.
Let’s look at one more, this time on the buy side.
As you can see, it is pretty much the same idea as we had on the previous chart only this time we are buying at our Fire Lines in a strong uptrend. Line to line, smooth as silk.
Source
How to Trade Forex with Fire Lines | Trading Forex
Trading is, without a doubt, one of the most alluring and exciting professions an individual could ever embark upon. It is also, arguably, one of the most dangerous. A career as a trader can be over in a heartbeat if the trader has not been properly educated to the market’s fickle ways. It is the potential of unlimited riches and income that seduce so many, yet the odds of success are heavily stacked against them. What is it that makes the difference? Why do so few succeed, where most others fail? The answer can be summed up in four words: discipline, education, hard work. It is the purpose of this article to equip you, the budding trader, with some of the education necessary to help you put the odds of succeeding in your favor. As for the discipline and hard work part, that is up to you. I would be willing to guess that success in trading is probably close to 10% knowledge and 90% discipline/hard work. Perhaps this is why the "mortality" rate of would-be-traders is so high. Not everyone is suited to short-term trading. Many brilliant people have been shot down in flames while trading. My theory is that they try to out think the market, out maneuver it. They also try to re-invent tried-and-true trade plans and end up making things more complicated than they need to be. Both are usually very bad ideas, which for the most part, end up failing, and worse, lightening your wallet, sometimes by quite a lot! I mention this only to make a point. That being true, the trading method you are about to learn about here in these pages, has been developed, traded, optimized and adapted in the real world of trading. This program is not some theoretical algorithm that some mathematician somewhere has dreamt up. No, this plan has earned its stripes the hard way. Through blood, sweat, and tears, through failures and success. It is the backbone of how I personally trade.
Getting Ready to Trade
It would probably be wise at this point to have a little discussion on a few important and key elements to our trade plan before we jump into the trading rules and setups themselves. These would be; our primary tool - the chart, which markets to trade and why, the individual - that being you, and lastly, funding and risk.The Chart - Part 1
The chart that we tend to favor for this style of trading is what's known as a candlestick chart. Because of how it is physically constructed, it is very easy to read and interpret in the chaos of a trading frenzy. We'll take a closer look at it shortly.Which Market
Now comes the important decision as to what, or, which of the many markets to trade. Not all markets are suitable to the average trader to trade, and not all are created equal. When it comes to short term trading, there are three market traits that the individual must pay very close attention to and look out for before he / she begins trading it.They are as follows:
Liquidity - Any market under consideration for trading must be liquid. That meaning, look for markets that are highly active with many various participants and creating a large amount of trading volume. High volume on its own, does not guarantee liquidity, it is the volume spread out, or distributed over a vast number of traders, each with different agendas, that allows for the almost immediate execution of buy and sell orders.
Smoothness - What we as short term traders are looking for in a market is nice orderly movement of price. We stay clear of erratic, jumpy markets at all costs. Consistency, smoothness and "predictability" of price behavior are what you should be looking for. Markets with a history of wide gaps in prices, large and meaningless price swings, or otherwise just chop, with prices moving back and forth, going nowhere, should be avoided like the plaque!
Range - Lastly, the market must have enough room, or range to make trading it worthwhile. Look for markets that have at least a 750.00 dollar trading range top to bottom, on a consistent basis. With this size range, there should be adequate opportunities and potential to profit and cover the associated costs of trading.
You
As briefly touched upon during the introduction, many clever people are just not suited to trading. Each individual must make an honest evaluation of him / herself before putting hard earned money, and precious time on the line. It is just a fact that a lot of people just don't have the mindset or the emotional makeup for trading. For some, the ups and downs of trading swings are just too much to deal with. It is just a personality trait, simple as that. Also, a trader must be prepared for long, lonely hours sitting in front of, and staring at a computer screen. If you like or need to be in the presence of others while working, trading may not be for you. Take a good hard look at yourself, is trading really for me?Funding and Risk
Like any other business, you need capital to start with. How much capital you have to work with will dictate what markets you can trade. The more volatile a market, the more risk you will need to assume to trade it. It is therefore imperative to be properly funded with a strict money/risk management plan in place. If you don’t, do not trade until you do!The Chart - Part 2
Ok, let us delve a little deeper into the chart itself. The chart is simply a graphical and dynamic representation of the supply, demand and price characteristics of the market at any given point in time. It can also convey to us, the "mood" or the psychology of that particular market - again, at any given point in time or price level. Price, direction, and trend are what we need to know in order to place our orders intelligently and give us the highest probability to profit from a given trade. This is what the charts help us to do. The chart itself is made up of individual "candles" or price bars. Each of these candles show to us the price movement over the given candles duration.For most of this essay, we will be using 15-minute candle stick charts, thus, each candle will represent 15 minutes of price action. Let us now look and see how the candle itself is constructed.
Example 1
Let’s take a look at the Bullish Candle (below) first.The candle is made up of 3 parts, the Body, the Wick, and the Tail. The distance between the top of the wick and the bottom of the tail is the entire range of price that occurred in the market during that 15-minute period. The bottom of the body was the price of the first trade made, and top of the body was the last trade made, for that 15-minute interval, hence the term open and close respectively. With a bullish candle, since prices closed higher than where they opened, then obviously, prices had to have been rising. Conversely, the Bearish Candle, “see below”, has its opening price higher than its closing price, therefore indicating prices fell during that period.
Depending on which charting software you use, bullish candles are usually either clear or green in color, while bearish candles will be filled, or red in color. In fact, nowadays, you can make the candles any color you wish.
There is a third, and very rare candle that we look for, and that is the "Doji" candle. This candle opens and closes at the same price (or within a tick or 2 of each other). This is usually neutral as far as the market is concerned, prices are content where they are with one exception. If the Doji candle occurs as a “swing” high or a “swing” low point on the chart, they more often than not signal a market reversal is about to occur. Prices have a high probability of turning around and moving in the opposite direction. Keep your eyes peeled for them, especially in the vicinity of one of our Fire Lines!
Fire Lines
Fire Lines are our statistical proprietary indicator that we use to produce price levels or price points, where we expect to see a lot of significant intraday trading activity, as well as to determine the likely trend of the price action for that particular day. Fire Lines typically identify areas where prices will be supported in a down trend, or resisted in an uptrend. It is at these levels that we seek to trade at. It is here, that we can enter the market with the least amount of risk and the greatest amount of potential.And now for a few definitions:
Inflection Point (I.P.): This is our strongest level and the point at which, if crossed, we expect the trend to change. As a rule of thumb, if prices are above the IP, the market is deemed to be bullish, if prices are below the IP, the market is considered bearish.
Upper Value Range (U.V.R.): The highest price level we would expect to see the market trade at on a given, non-trending day. Very bullish if prices are at or above this level - a great place to initiate a long position from.
Lower Value Range (L.V.R.): The lowest price level we would expect to see the market trade at on a given, non-trending day. Very bearish if prices are at or below this level - a great place to initiate a short position from.
Targets and Objectives: The prices or levels we would expect the market to reach should the current trend continue. At these levels we can look for a trade, however most of the time we are already in one by the time these areas are reached! As such, we just call them targets, or objectives. They can sometimes also provide re-entry points for those days that are trending strongly, or a place to add size to winning positions.
The “Abattoir”: A French word meaning slaughterhouse. I use it to describe the area between the moving average and a Fire Line. A trader, as a general rule, does not want to initiate a trade in this area as it is prone to giving false signals and whipsaw - like price action. Basically an area of consolidation where no tradable trend is present.
So those, in a nutshell are the Fire Lines.
Simple Moving Average (SMA): Essentially a trend following measurement. An arithmetic mean of the number of periods assigned to it. e.g. A 96 SMA on our chart will sum and average the price data of the last 96 candles and plot it on the chart as a line.
Now for the Meat of It - A Typical Day
The first thing to do is to prepare your chart for the next trading session. I suggest just putting on the UVR, the IP, and the LVR lines only at first so your chart remains uncluttered and you can more clearly see what’s going on as prices begin to move. Of course, make sure your moving average is on the chart as well. The example below is pretty much how I have my chart set up going into the next trading session.Non-Trending and Dangerous
Ok, let us examine the chart above and see what story it is trying to tell us.
Starting from the left hand side, notice how prices rapidly climb higher, go through the UVR (1st black arrow), and then just as quickly retreat. In fact, they fell back below the LVR where that level then became resistance (2 purple arrows). This is exactly the type of price action that gets so many new traders into trouble. When things get volatile, the adrenalin begins to flow and thoughts of fast and easy money fills their heads. For some strange reason, the thoughts of fast and easy losses never get thought about. Perhaps it is our optimistic nature as human beings, however optimism should NEVER be the basis of any one individual trade, be that getting into, or staying in a position. Optimism about ones trading, absolutely, but never when it comes to a trade! Risk management is what you need to focus on a day-to-day basis, and above average, unexplained volatility is usually a warning sign to stay away!
Now for the “Abattoir”
This is really not a big deal as it can be very easily recognized and avoided by following one very simple rule. DO NOT ENTER INTO A TRADE IF THE PRICE IS BETWEEN ANY OF THE FIRE LINES AND THE 96 SMA. Way more often than not, price will just bounce around between the levels, not a place where you want to be vulnerable and at risk. Sooner or later one side or the other will yield, and that’s when you want to play. Let the gamblers fight the battle, we’ll come in after the battle has been won on the side of the victors, and ride on their coat tails! Not glamourous or pretty, but usually highly profitable with little risk.And Finally, the “Range”
This is the defined area between the Upper and Lower Value Range levels. (U.V.R and L.V.R.) Just like the “Abattoir”, this area can be subject to wild price gyrations and very erratic price movement. Typically, not a terrific spot to trade in. Having said that however, every once and awhile you can sometimes get a trade from the Inflection Point to either the U.V.R. or the L.V.R. depending on the trend, and of course depending on the stop size, or risk. But, as a general rule, trading within this range is dangerous and not recommended.One last note on this chart. Notice both the U.V.R. and the L.V.R. get broken and then prices quickly return back inside the range (marked by black arrows). We don’t want to immediately initiate a trade when our levels are broken but instead wait to see if the broken level begins to act as support, as in the case of the U.V.R. breaking or becomes resistance, in the case of the L.V.R. being penetrated. We look for what we like to call, BHG (Break, Hold, and Go) before trading.
Here is an example of how I like to make a trade, in this case, a short in a strong down trend.
First thing to notice are the little green bubbles. See how at those points prices are coming to the Fire Lines and being repelled by them? The subsequent high and low swings now become perfect entry levels for us. As an example, we can see a swing low as marked by the light blue arrow. The following candle attempts to rally but is defeated... the selling pressure is still on. Therefore, we can quite safely place our sell order just below the marked swing low (broken blue line) with an initial objective of the 2nd Target. It is at these swing highs and lows (or very close to) at our Fire Lines that we seek to trade from.
Very often however, you just cannot get onto a trade safely. Notice the black arrow.
It is pointing towards a candle whose range is much larger than that of the other candles around it... a volatile situation likely caused by a news item or economic report. In this case the risks are just far too great relative to the potential rewards to try and trade it. The smart traders will likely retreat.
Let’s look at one more, this time on the buy side.
As you can see, it is pretty much the same idea as we had on the previous chart only this time we are buying at our Fire Lines in a strong uptrend. Line to line, smooth as silk.
Source
How to Trade Forex with Fire Lines | Trading Forex
Trading is, without a doubt, one of the most alluring and exciting professions an individual could ever embark upon. It is also, arguably, one of the most dangerous. A career as a trader can be over in a heartbeat if the trader has not been properly educated to the market’s fickle ways. It is the potential of unlimited riches and income that seduce so many, yet the odds of success are heavily stacked against them. What is it that makes the difference? Why do so few succeed, where most others fail? The answer can be summed up in four words: discipline, education, hard work. It is the purpose of this article to equip you, the budding trader, with some of the education necessary to help you put the odds of succeeding in your favor. As for the discipline and hard work part, that is up to you. I would be willing to guess that success in trading is probably close to 10% knowledge and 90% discipline/hard work. Perhaps this is why the "mortality" rate of would-be-traders is so high. Not everyone is suited to short-term trading. Many brilliant people have been shot down in flames while trading. My theory is that they try to out think the market, out maneuver it. They also try to re-invent tried-and-true trade plans and end up making things more complicated than they need to be. Both are usually very bad ideas, which for the most part, end up failing, and worse, lightening your wallet, sometimes by quite a lot! I mention this only to make a point. That being true, the trading method you are about to learn about here in these pages, has been developed, traded, optimized and adapted in the real world of trading. This program is not some theoretical algorithm that some mathematician somewhere has dreamt up. No, this plan has earned its stripes the hard way. Through blood, sweat, and tears, through failures and success. It is the backbone of how I personally trade.
Getting Ready to Trade
It would probably be wise at this point to have a little discussion on a few important and key elements to our trade plan before we jump into the trading rules and setups themselves. These would be; our primary tool - the chart, which markets to trade and why, the individual - that being you, and lastly, funding and risk.The Chart - Part 1
The chart that we tend to favor for this style of trading is what's known as a candlestick chart. Because of how it is physically constructed, it is very easy to read and interpret in the chaos of a trading frenzy. We'll take a closer look at it shortly.Which Market
Now comes the important decision as to what, or, which of the many markets to trade. Not all markets are suitable to the average trader to trade, and not all are created equal. When it comes to short term trading, there are three market traits that the individual must pay very close attention to and look out for before he / she begins trading it.They are as follows:
Liquidity - Any market under consideration for trading must be liquid. That meaning, look for markets that are highly active with many various participants and creating a large amount of trading volume. High volume on its own, does not guarantee liquidity, it is the volume spread out, or distributed over a vast number of traders, each with different agendas, that allows for the almost immediate execution of buy and sell orders.
Smoothness - What we as short term traders are looking for in a market is nice orderly movement of price. We stay clear of erratic, jumpy markets at all costs. Consistency, smoothness and "predictability" of price behavior are what you should be looking for. Markets with a history of wide gaps in prices, large and meaningless price swings, or otherwise just chop, with prices moving back and forth, going nowhere, should be avoided like the plaque!
Range - Lastly, the market must have enough room, or range to make trading it worthwhile. Look for markets that have at least a 750.00 dollar trading range top to bottom, on a consistent basis. With this size range, there should be adequate opportunities and potential to profit and cover the associated costs of trading.
You
As briefly touched upon during the introduction, many clever people are just not suited to trading. Each individual must make an honest evaluation of him / herself before putting hard earned money, and precious time on the line. It is just a fact that a lot of people just don't have the mindset or the emotional makeup for trading. For some, the ups and downs of trading swings are just too much to deal with. It is just a personality trait, simple as that. Also, a trader must be prepared for long, lonely hours sitting in front of, and staring at a computer screen. If you like or need to be in the presence of others while working, trading may not be for you. Take a good hard look at yourself, is trading really for me?Funding and Risk
Like any other business, you need capital to start with. How much capital you have to work with will dictate what markets you can trade. The more volatile a market, the more risk you will need to assume to trade it. It is therefore imperative to be properly funded with a strict money/risk management plan in place. If you don’t, do not trade until you do!The Chart - Part 2
Ok, let us delve a little deeper into the chart itself. The chart is simply a graphical and dynamic representation of the supply, demand and price characteristics of the market at any given point in time. It can also convey to us, the "mood" or the psychology of that particular market - again, at any given point in time or price level. Price, direction, and trend are what we need to know in order to place our orders intelligently and give us the highest probability to profit from a given trade. This is what the charts help us to do. The chart itself is made up of individual "candles" or price bars. Each of these candles show to us the price movement over the given candles duration.For most of this essay, we will be using 15-minute candle stick charts, thus, each candle will represent 15 minutes of price action. Let us now look and see how the candle itself is constructed.
Example 1
Let’s take a look at the Bullish Candle (below) first.The candle is made up of 3 parts, the Body, the Wick, and the Tail. The distance between the top of the wick and the bottom of the tail is the entire range of price that occurred in the market during that 15-minute period. The bottom of the body was the price of the first trade made, and top of the body was the last trade made, for that 15-minute interval, hence the term open and close respectively. With a bullish candle, since prices closed higher than where they opened, then obviously, prices had to have been rising. Conversely, the Bearish Candle, “see below”, has its opening price higher than its closing price, therefore indicating prices fell during that period.
Depending on which charting software you use, bullish candles are usually either clear or green in color, while bearish candles will be filled, or red in color. In fact, nowadays, you can make the candles any color you wish.
There is a third, and very rare candle that we look for, and that is the "Doji" candle. This candle opens and closes at the same price (or within a tick or 2 of each other). This is usually neutral as far as the market is concerned, prices are content where they are with one exception. If the Doji candle occurs as a “swing” high or a “swing” low point on the chart, they more often than not signal a market reversal is about to occur. Prices have a high probability of turning around and moving in the opposite direction. Keep your eyes peeled for them, especially in the vicinity of one of our Fire Lines!
Fire Lines
Fire Lines are our statistical proprietary indicator that we use to produce price levels or price points, where we expect to see a lot of significant intraday trading activity, as well as to determine the likely trend of the price action for that particular day. Fire Lines typically identify areas where prices will be supported in a down trend, or resisted in an uptrend. It is at these levels that we seek to trade at. It is here, that we can enter the market with the least amount of risk and the greatest amount of potential.And now for a few definitions:
Inflection Point (I.P.): This is our strongest level and the point at which, if crossed, we expect the trend to change. As a rule of thumb, if prices are above the IP, the market is deemed to be bullish, if prices are below the IP, the market is considered bearish.
Upper Value Range (U.V.R.): The highest price level we would expect to see the market trade at on a given, non-trending day. Very bullish if prices are at or above this level - a great place to initiate a long position from.
Lower Value Range (L.V.R.): The lowest price level we would expect to see the market trade at on a given, non-trending day. Very bearish if prices are at or below this level - a great place to initiate a short position from.
Targets and Objectives: The prices or levels we would expect the market to reach should the current trend continue. At these levels we can look for a trade, however most of the time we are already in one by the time these areas are reached! As such, we just call them targets, or objectives. They can sometimes also provide re-entry points for those days that are trending strongly, or a place to add size to winning positions.
The “Abattoir”: A French word meaning slaughterhouse. I use it to describe the area between the moving average and a Fire Line. A trader, as a general rule, does not want to initiate a trade in this area as it is prone to giving false signals and whipsaw - like price action. Basically an area of consolidation where no tradable trend is present.
So those, in a nutshell are the Fire Lines.
Simple Moving Average (SMA): Essentially a trend following measurement. An arithmetic mean of the number of periods assigned to it. e.g. A 96 SMA on our chart will sum and average the price data of the last 96 candles and plot it on the chart as a line.
Now for the Meat of It - A Typical Day
The first thing to do is to prepare your chart for the next trading session. I suggest just putting on the UVR, the IP, and the LVR lines only at first so your chart remains uncluttered and you can more clearly see what’s going on as prices begin to move. Of course, make sure your moving average is on the chart as well. The example below is pretty much how I have my chart set up going into the next trading session.Non-Trending and Dangerous
Ok, let us examine the chart above and see what story it is trying to tell us.
Starting from the left hand side, notice how prices rapidly climb higher, go through the UVR (1st black arrow), and then just as quickly retreat. In fact, they fell back below the LVR where that level then became resistance (2 purple arrows). This is exactly the type of price action that gets so many new traders into trouble. When things get volatile, the adrenalin begins to flow and thoughts of fast and easy money fills their heads. For some strange reason, the thoughts of fast and easy losses never get thought about. Perhaps it is our optimistic nature as human beings, however optimism should NEVER be the basis of any one individual trade, be that getting into, or staying in a position. Optimism about ones trading, absolutely, but never when it comes to a trade! Risk management is what you need to focus on a day-to-day basis, and above average, unexplained volatility is usually a warning sign to stay away!
Now for the “Abattoir”
This is really not a big deal as it can be very easily recognized and avoided by following one very simple rule. DO NOT ENTER INTO A TRADE IF THE PRICE IS BETWEEN ANY OF THE FIRE LINES AND THE 96 SMA. Way more often than not, price will just bounce around between the levels, not a place where you want to be vulnerable and at risk. Sooner or later one side or the other will yield, and that’s when you want to play. Let the gamblers fight the battle, we’ll come in after the battle has been won on the side of the victors, and ride on their coat tails! Not glamourous or pretty, but usually highly profitable with little risk.And Finally, the “Range”
This is the defined area between the Upper and Lower Value Range levels. (U.V.R and L.V.R.) Just like the “Abattoir”, this area can be subject to wild price gyrations and very erratic price movement. Typically, not a terrific spot to trade in. Having said that however, every once and awhile you can sometimes get a trade from the Inflection Point to either the U.V.R. or the L.V.R. depending on the trend, and of course depending on the stop size, or risk. But, as a general rule, trading within this range is dangerous and not recommended.One last note on this chart. Notice both the U.V.R. and the L.V.R. get broken and then prices quickly return back inside the range (marked by black arrows). We don’t want to immediately initiate a trade when our levels are broken but instead wait to see if the broken level begins to act as support, as in the case of the U.V.R. breaking or becomes resistance, in the case of the L.V.R. being penetrated. We look for what we like to call, BHG (Break, Hold, and Go) before trading.
Here is an example of how I like to make a trade, in this case, a short in a strong down trend.
First thing to notice are the little green bubbles. See how at those points prices are coming to the Fire Lines and being repelled by them? The subsequent high and low swings now become perfect entry levels for us. As an example, we can see a swing low as marked by the light blue arrow. The following candle attempts to rally but is defeated... the selling pressure is still on. Therefore, we can quite safely place our sell order just below the marked swing low (broken blue line) with an initial objective of the 2nd Target. It is at these swing highs and lows (or very close to) at our Fire Lines that we seek to trade from.
Very often however, you just cannot get onto a trade safely. Notice the black arrow.
It is pointing towards a candle whose range is much larger than that of the other candles around it... a volatile situation likely caused by a news item or economic report. In this case the risks are just far too great relative to the potential rewards to try and trade it. The smart traders will likely retreat.
Let’s look at one more, this time on the buy side.
As you can see, it is pretty much the same idea as we had on the previous chart only this time we are buying at our Fire Lines in a strong uptrend. Line to line, smooth as silk.
Source
How to Trade Forex with Fire Lines | Trading Forex
Trading is, without a doubt, one of the most alluring and exciting professions an individual could ever embark upon. It is also, arguably, one of the most dangerous. A career as a trader can be over in a heartbeat if the trader has not been properly educated to the market’s fickle ways. It is the potential of unlimited riches and income that seduce so many, yet the odds of success are heavily stacked against them. What is it that makes the difference? Why do so few succeed, where most others fail? The answer can be summed up in four words: discipline, education, hard work. It is the purpose of this article to equip you, the budding trader, with some of the education necessary to help you put the odds of succeeding in your favor. As for the discipline and hard work part, that is up to you. I would be willing to guess that success in trading is probably close to 10% knowledge and 90% discipline/hard work. Perhaps this is why the "mortality" rate of would-be-traders is so high. Not everyone is suited to short-term trading. Many brilliant people have been shot down in flames while trading. My theory is that they try to out think the market, out maneuver it. They also try to re-invent tried-and-true trade plans and end up making things more complicated than they need to be. Both are usually very bad ideas, which for the most part, end up failing, and worse, lightening your wallet, sometimes by quite a lot! I mention this only to make a point. That being true, the trading method you are about to learn about here in these pages, has been developed, traded, optimized and adapted in the real world of trading. This program is not some theoretical algorithm that some mathematician somewhere has dreamt up. No, this plan has earned its stripes the hard way. Through blood, sweat, and tears, through failures and success. It is the backbone of how I personally trade.
Getting Ready to Trade
It would probably be wise at this point to have a little discussion on a few important and key elements to our trade plan before we jump into the trading rules and setups themselves. These would be; our primary tool - the chart, which markets to trade and why, the individual - that being you, and lastly, funding and risk.The Chart - Part 1
The chart that we tend to favor for this style of trading is what's known as a candlestick chart. Because of how it is physically constructed, it is very easy to read and interpret in the chaos of a trading frenzy. We'll take a closer look at it shortly.Which Market
Now comes the important decision as to what, or, which of the many markets to trade. Not all markets are suitable to the average trader to trade, and not all are created equal. When it comes to short term trading, there are three market traits that the individual must pay very close attention to and look out for before he / she begins trading it.They are as follows:
Liquidity - Any market under consideration for trading must be liquid. That meaning, look for markets that are highly active with many various participants and creating a large amount of trading volume. High volume on its own, does not guarantee liquidity, it is the volume spread out, or distributed over a vast number of traders, each with different agendas, that allows for the almost immediate execution of buy and sell orders.
Smoothness - What we as short term traders are looking for in a market is nice orderly movement of price. We stay clear of erratic, jumpy markets at all costs. Consistency, smoothness and "predictability" of price behavior are what you should be looking for. Markets with a history of wide gaps in prices, large and meaningless price swings, or otherwise just chop, with prices moving back and forth, going nowhere, should be avoided like the plaque!
Range - Lastly, the market must have enough room, or range to make trading it worthwhile. Look for markets that have at least a 750.00 dollar trading range top to bottom, on a consistent basis. With this size range, there should be adequate opportunities and potential to profit and cover the associated costs of trading.
You
As briefly touched upon during the introduction, many clever people are just not suited to trading. Each individual must make an honest evaluation of him / herself before putting hard earned money, and precious time on the line. It is just a fact that a lot of people just don't have the mindset or the emotional makeup for trading. For some, the ups and downs of trading swings are just too much to deal with. It is just a personality trait, simple as that. Also, a trader must be prepared for long, lonely hours sitting in front of, and staring at a computer screen. If you like or need to be in the presence of others while working, trading may not be for you. Take a good hard look at yourself, is trading really for me?Funding and Risk
Like any other business, you need capital to start with. How much capital you have to work with will dictate what markets you can trade. The more volatile a market, the more risk you will need to assume to trade it. It is therefore imperative to be properly funded with a strict money/risk management plan in place. If you don’t, do not trade until you do!The Chart - Part 2
Ok, let us delve a little deeper into the chart itself. The chart is simply a graphical and dynamic representation of the supply, demand and price characteristics of the market at any given point in time. It can also convey to us, the "mood" or the psychology of that particular market - again, at any given point in time or price level. Price, direction, and trend are what we need to know in order to place our orders intelligently and give us the highest probability to profit from a given trade. This is what the charts help us to do. The chart itself is made up of individual "candles" or price bars. Each of these candles show to us the price movement over the given candles duration.For most of this essay, we will be using 15-minute candle stick charts, thus, each candle will represent 15 minutes of price action. Let us now look and see how the candle itself is constructed.
Example 1
Let’s take a look at the Bullish Candle (below) first.The candle is made up of 3 parts, the Body, the Wick, and the Tail. The distance between the top of the wick and the bottom of the tail is the entire range of price that occurred in the market during that 15-minute period. The bottom of the body was the price of the first trade made, and top of the body was the last trade made, for that 15-minute interval, hence the term open and close respectively. With a bullish candle, since prices closed higher than where they opened, then obviously, prices had to have been rising. Conversely, the Bearish Candle, “see below”, has its opening price higher than its closing price, therefore indicating prices fell during that period.
Depending on which charting software you use, bullish candles are usually either clear or green in color, while bearish candles will be filled, or red in color. In fact, nowadays, you can make the candles any color you wish.
There is a third, and very rare candle that we look for, and that is the "Doji" candle. This candle opens and closes at the same price (or within a tick or 2 of each other). This is usually neutral as far as the market is concerned, prices are content where they are with one exception. If the Doji candle occurs as a “swing” high or a “swing” low point on the chart, they more often than not signal a market reversal is about to occur. Prices have a high probability of turning around and moving in the opposite direction. Keep your eyes peeled for them, especially in the vicinity of one of our Fire Lines!
Fire Lines
Fire Lines are our statistical proprietary indicator that we use to produce price levels or price points, where we expect to see a lot of significant intraday trading activity, as well as to determine the likely trend of the price action for that particular day. Fire Lines typically identify areas where prices will be supported in a down trend, or resisted in an uptrend. It is at these levels that we seek to trade at. It is here, that we can enter the market with the least amount of risk and the greatest amount of potential.And now for a few definitions:
Inflection Point (I.P.): This is our strongest level and the point at which, if crossed, we expect the trend to change. As a rule of thumb, if prices are above the IP, the market is deemed to be bullish, if prices are below the IP, the market is considered bearish.
Upper Value Range (U.V.R.): The highest price level we would expect to see the market trade at on a given, non-trending day. Very bullish if prices are at or above this level - a great place to initiate a long position from.
Lower Value Range (L.V.R.): The lowest price level we would expect to see the market trade at on a given, non-trending day. Very bearish if prices are at or below this level - a great place to initiate a short position from.
Targets and Objectives: The prices or levels we would expect the market to reach should the current trend continue. At these levels we can look for a trade, however most of the time we are already in one by the time these areas are reached! As such, we just call them targets, or objectives. They can sometimes also provide re-entry points for those days that are trending strongly, or a place to add size to winning positions.
The “Abattoir”: A French word meaning slaughterhouse. I use it to describe the area between the moving average and a Fire Line. A trader, as a general rule, does not want to initiate a trade in this area as it is prone to giving false signals and whipsaw - like price action. Basically an area of consolidation where no tradable trend is present.
So those, in a nutshell are the Fire Lines.
Simple Moving Average (SMA): Essentially a trend following measurement. An arithmetic mean of the number of periods assigned to it. e.g. A 96 SMA on our chart will sum and average the price data of the last 96 candles and plot it on the chart as a line.
Now for the Meat of It - A Typical Day
The first thing to do is to prepare your chart for the next trading session. I suggest just putting on the UVR, the IP, and the LVR lines only at first so your chart remains uncluttered and you can more clearly see what’s going on as prices begin to move. Of course, make sure your moving average is on the chart as well. The example below is pretty much how I have my chart set up going into the next trading session.Non-Trending and Dangerous
Ok, let us examine the chart above and see what story it is trying to tell us.
Starting from the left hand side, notice how prices rapidly climb higher, go through the UVR (1st black arrow), and then just as quickly retreat. In fact, they fell back below the LVR where that level then became resistance (2 purple arrows). This is exactly the type of price action that gets so many new traders into trouble. When things get volatile, the adrenalin begins to flow and thoughts of fast and easy money fills their heads. For some strange reason, the thoughts of fast and easy losses never get thought about. Perhaps it is our optimistic nature as human beings, however optimism should NEVER be the basis of any one individual trade, be that getting into, or staying in a position. Optimism about ones trading, absolutely, but never when it comes to a trade! Risk management is what you need to focus on a day-to-day basis, and above average, unexplained volatility is usually a warning sign to stay away!
Now for the “Abattoir”
This is really not a big deal as it can be very easily recognized and avoided by following one very simple rule. DO NOT ENTER INTO A TRADE IF THE PRICE IS BETWEEN ANY OF THE FIRE LINES AND THE 96 SMA. Way more often than not, price will just bounce around between the levels, not a place where you want to be vulnerable and at risk. Sooner or later one side or the other will yield, and that’s when you want to play. Let the gamblers fight the battle, we’ll come in after the battle has been won on the side of the victors, and ride on their coat tails! Not glamourous or pretty, but usually highly profitable with little risk.And Finally, the “Range”
This is the defined area between the Upper and Lower Value Range levels. (U.V.R and L.V.R.) Just like the “Abattoir”, this area can be subject to wild price gyrations and very erratic price movement. Typically, not a terrific spot to trade in. Having said that however, every once and awhile you can sometimes get a trade from the Inflection Point to either the U.V.R. or the L.V.R. depending on the trend, and of course depending on the stop size, or risk. But, as a general rule, trading within this range is dangerous and not recommended.One last note on this chart. Notice both the U.V.R. and the L.V.R. get broken and then prices quickly return back inside the range (marked by black arrows). We don’t want to immediately initiate a trade when our levels are broken but instead wait to see if the broken level begins to act as support, as in the case of the U.V.R. breaking or becomes resistance, in the case of the L.V.R. being penetrated. We look for what we like to call, BHG (Break, Hold, and Go) before trading.
Here is an example of how I like to make a trade, in this case, a short in a strong down trend.
First thing to notice are the little green bubbles. See how at those points prices are coming to the Fire Lines and being repelled by them? The subsequent high and low swings now become perfect entry levels for us. As an example, we can see a swing low as marked by the light blue arrow. The following candle attempts to rally but is defeated... the selling pressure is still on. Therefore, we can quite safely place our sell order just below the marked swing low (broken blue line) with an initial objective of the 2nd Target. It is at these swing highs and lows (or very close to) at our Fire Lines that we seek to trade from.
Very often however, you just cannot get onto a trade safely. Notice the black arrow.
It is pointing towards a candle whose range is much larger than that of the other candles around it... a volatile situation likely caused by a news item or economic report. In this case the risks are just far too great relative to the potential rewards to try and trade it. The smart traders will likely retreat.
Let’s look at one more, this time on the buy side.
As you can see, it is pretty much the same idea as we had on the previous chart only this time we are buying at our Fire Lines in a strong uptrend. Line to line, smooth as silk.
Source
How to Trade Forex with Fire Lines | Trading Forex
Trading is, without a doubt, one of the most alluring and exciting professions an individual could ever embark upon. It is also, arguably, one of the most dangerous. A career as a trader can be over in a heartbeat if the trader has not been properly educated to the market’s fickle ways. It is the potential of unlimited riches and income that seduce so many, yet the odds of success are heavily stacked against them. What is it that makes the difference? Why do so few succeed, where most others fail? The answer can be summed up in four words: discipline, education, hard work. It is the purpose of this article to equip you, the budding trader, with some of the education necessary to help you put the odds of succeeding in your favor. As for the discipline and hard work part, that is up to you. I would be willing to guess that success in trading is probably close to 10% knowledge and 90% discipline/hard work. Perhaps this is why the "mortality" rate of would-be-traders is so high. Not everyone is suited to short-term trading. Many brilliant people have been shot down in flames while trading. My theory is that they try to out think the market, out maneuver it. They also try to re-invent tried-and-true trade plans and end up making things more complicated than they need to be. Both are usually very bad ideas, which for the most part, end up failing, and worse, lightening your wallet, sometimes by quite a lot! I mention this only to make a point. That being true, the trading method you are about to learn about here in these pages, has been developed, traded, optimized and adapted in the real world of trading. This program is not some theoretical algorithm that some mathematician somewhere has dreamt up. No, this plan has earned its stripes the hard way. Through blood, sweat, and tears, through failures and success. It is the backbone of how I personally trade.
Getting Ready to Trade
It would probably be wise at this point to have a little discussion on a few important and key elements to our trade plan before we jump into the trading rules and setups themselves. These would be; our primary tool - the chart, which markets to trade and why, the individual - that being you, and lastly, funding and risk.The Chart - Part 1
The chart that we tend to favor for this style of trading is what's known as a candlestick chart. Because of how it is physically constructed, it is very easy to read and interpret in the chaos of a trading frenzy. We'll take a closer look at it shortly.Which Market
Now comes the important decision as to what, or, which of the many markets to trade. Not all markets are suitable to the average trader to trade, and not all are created equal. When it comes to short term trading, there are three market traits that the individual must pay very close attention to and look out for before he / she begins trading it.They are as follows:
Liquidity - Any market under consideration for trading must be liquid. That meaning, look for markets that are highly active with many various participants and creating a large amount of trading volume. High volume on its own, does not guarantee liquidity, it is the volume spread out, or distributed over a vast number of traders, each with different agendas, that allows for the almost immediate execution of buy and sell orders.
Smoothness - What we as short term traders are looking for in a market is nice orderly movement of price. We stay clear of erratic, jumpy markets at all costs. Consistency, smoothness and "predictability" of price behavior are what you should be looking for. Markets with a history of wide gaps in prices, large and meaningless price swings, or otherwise just chop, with prices moving back and forth, going nowhere, should be avoided like the plaque!
Range - Lastly, the market must have enough room, or range to make trading it worthwhile. Look for markets that have at least a 750.00 dollar trading range top to bottom, on a consistent basis. With this size range, there should be adequate opportunities and potential to profit and cover the associated costs of trading.
You
As briefly touched upon during the introduction, many clever people are just not suited to trading. Each individual must make an honest evaluation of him / herself before putting hard earned money, and precious time on the line. It is just a fact that a lot of people just don't have the mindset or the emotional makeup for trading. For some, the ups and downs of trading swings are just too much to deal with. It is just a personality trait, simple as that. Also, a trader must be prepared for long, lonely hours sitting in front of, and staring at a computer screen. If you like or need to be in the presence of others while working, trading may not be for you. Take a good hard look at yourself, is trading really for me?Funding and Risk
Like any other business, you need capital to start with. How much capital you have to work with will dictate what markets you can trade. The more volatile a market, the more risk you will need to assume to trade it. It is therefore imperative to be properly funded with a strict money/risk management plan in place. If you don’t, do not trade until you do!The Chart - Part 2
Ok, let us delve a little deeper into the chart itself. The chart is simply a graphical and dynamic representation of the supply, demand and price characteristics of the market at any given point in time. It can also convey to us, the "mood" or the psychology of that particular market - again, at any given point in time or price level. Price, direction, and trend are what we need to know in order to place our orders intelligently and give us the highest probability to profit from a given trade. This is what the charts help us to do. The chart itself is made up of individual "candles" or price bars. Each of these candles show to us the price movement over the given candles duration.For most of this essay, we will be using 15-minute candle stick charts, thus, each candle will represent 15 minutes of price action. Let us now look and see how the candle itself is constructed.
Example 1
Let’s take a look at the Bullish Candle (below) first.The candle is made up of 3 parts, the Body, the Wick, and the Tail. The distance between the top of the wick and the bottom of the tail is the entire range of price that occurred in the market during that 15-minute period. The bottom of the body was the price of the first trade made, and top of the body was the last trade made, for that 15-minute interval, hence the term open and close respectively. With a bullish candle, since prices closed higher than where they opened, then obviously, prices had to have been rising. Conversely, the Bearish Candle, “see below”, has its opening price higher than its closing price, therefore indicating prices fell during that period.
Depending on which charting software you use, bullish candles are usually either clear or green in color, while bearish candles will be filled, or red in color. In fact, nowadays, you can make the candles any color you wish.
There is a third, and very rare candle that we look for, and that is the "Doji" candle. This candle opens and closes at the same price (or within a tick or 2 of each other). This is usually neutral as far as the market is concerned, prices are content where they are with one exception. If the Doji candle occurs as a “swing” high or a “swing” low point on the chart, they more often than not signal a market reversal is about to occur. Prices have a high probability of turning around and moving in the opposite direction. Keep your eyes peeled for them, especially in the vicinity of one of our Fire Lines!
Fire Lines
Fire Lines are our statistical proprietary indicator that we use to produce price levels or price points, where we expect to see a lot of significant intraday trading activity, as well as to determine the likely trend of the price action for that particular day. Fire Lines typically identify areas where prices will be supported in a down trend, or resisted in an uptrend. It is at these levels that we seek to trade at. It is here, that we can enter the market with the least amount of risk and the greatest amount of potential.And now for a few definitions:
Inflection Point (I.P.): This is our strongest level and the point at which, if crossed, we expect the trend to change. As a rule of thumb, if prices are above the IP, the market is deemed to be bullish, if prices are below the IP, the market is considered bearish.
Upper Value Range (U.V.R.): The highest price level we would expect to see the market trade at on a given, non-trending day. Very bullish if prices are at or above this level - a great place to initiate a long position from.
Lower Value Range (L.V.R.): The lowest price level we would expect to see the market trade at on a given, non-trending day. Very bearish if prices are at or below this level - a great place to initiate a short position from.
Targets and Objectives: The prices or levels we would expect the market to reach should the current trend continue. At these levels we can look for a trade, however most of the time we are already in one by the time these areas are reached! As such, we just call them targets, or objectives. They can sometimes also provide re-entry points for those days that are trending strongly, or a place to add size to winning positions.
The “Abattoir”: A French word meaning slaughterhouse. I use it to describe the area between the moving average and a Fire Line. A trader, as a general rule, does not want to initiate a trade in this area as it is prone to giving false signals and whipsaw - like price action. Basically an area of consolidation where no tradable trend is present.
So those, in a nutshell are the Fire Lines.
Simple Moving Average (SMA): Essentially a trend following measurement. An arithmetic mean of the number of periods assigned to it. e.g. A 96 SMA on our chart will sum and average the price data of the last 96 candles and plot it on the chart as a line.
Now for the Meat of It - A Typical Day
The first thing to do is to prepare your chart for the next trading session. I suggest just putting on the UVR, the IP, and the LVR lines only at first so your chart remains uncluttered and you can more clearly see what’s going on as prices begin to move. Of course, make sure your moving average is on the chart as well. The example below is pretty much how I have my chart set up going into the next trading session.Non-Trending and Dangerous
Ok, let us examine the chart above and see what story it is trying to tell us.
Starting from the left hand side, notice how prices rapidly climb higher, go through the UVR (1st black arrow), and then just as quickly retreat. In fact, they fell back below the LVR where that level then became resistance (2 purple arrows). This is exactly the type of price action that gets so many new traders into trouble. When things get volatile, the adrenalin begins to flow and thoughts of fast and easy money fills their heads. For some strange reason, the thoughts of fast and easy losses never get thought about. Perhaps it is our optimistic nature as human beings, however optimism should NEVER be the basis of any one individual trade, be that getting into, or staying in a position. Optimism about ones trading, absolutely, but never when it comes to a trade! Risk management is what you need to focus on a day-to-day basis, and above average, unexplained volatility is usually a warning sign to stay away!
Now for the “Abattoir”
This is really not a big deal as it can be very easily recognized and avoided by following one very simple rule. DO NOT ENTER INTO A TRADE IF THE PRICE IS BETWEEN ANY OF THE FIRE LINES AND THE 96 SMA. Way more often than not, price will just bounce around between the levels, not a place where you want to be vulnerable and at risk. Sooner or later one side or the other will yield, and that’s when you want to play. Let the gamblers fight the battle, we’ll come in after the battle has been won on the side of the victors, and ride on their coat tails! Not glamourous or pretty, but usually highly profitable with little risk.And Finally, the “Range”
This is the defined area between the Upper and Lower Value Range levels. (U.V.R and L.V.R.) Just like the “Abattoir”, this area can be subject to wild price gyrations and very erratic price movement. Typically, not a terrific spot to trade in. Having said that however, every once and awhile you can sometimes get a trade from the Inflection Point to either the U.V.R. or the L.V.R. depending on the trend, and of course depending on the stop size, or risk. But, as a general rule, trading within this range is dangerous and not recommended.One last note on this chart. Notice both the U.V.R. and the L.V.R. get broken and then prices quickly return back inside the range (marked by black arrows). We don’t want to immediately initiate a trade when our levels are broken but instead wait to see if the broken level begins to act as support, as in the case of the U.V.R. breaking or becomes resistance, in the case of the L.V.R. being penetrated. We look for what we like to call, BHG (Break, Hold, and Go) before trading.
Here is an example of how I like to make a trade, in this case, a short in a strong down trend.
First thing to notice are the little green bubbles. See how at those points prices are coming to the Fire Lines and being repelled by them? The subsequent high and low swings now become perfect entry levels for us. As an example, we can see a swing low as marked by the light blue arrow. The following candle attempts to rally but is defeated... the selling pressure is still on. Therefore, we can quite safely place our sell order just below the marked swing low (broken blue line) with an initial objective of the 2nd Target. It is at these swing highs and lows (or very close to) at our Fire Lines that we seek to trade from.
Very often however, you just cannot get onto a trade safely. Notice the black arrow.
It is pointing towards a candle whose range is much larger than that of the other candles around it... a volatile situation likely caused by a news item or economic report. In this case the risks are just far too great relative to the potential rewards to try and trade it. The smart traders will likely retreat.
Let’s look at one more, this time on the buy side.
As you can see, it is pretty much the same idea as we had on the previous chart only this time we are buying at our Fire Lines in a strong uptrend. Line to line, smooth as silk.
Source
What Is The Difference Between A Demat Account And Buying and selling Account? | Insurance | Mesothelioma | Forex
This is the place you purchase and promote stocks, choices, ETFs and extra. I acknowledge that securities held in my Margin account could also be pledged, re-pledged, hypothecated, or re-hypothecated for any quantity due Stadium Online in my account(s) or for a larger amount. All the information on this website is for academic functions only and is not to be construed as investment or buying and selling advice. For a few of these brokerages, in case you lose money and your account stability drops under this amount, you’ll still be charged further fees for having too low a stability.
Any Commonwealth Bank or CommSec account details supplied by you on the One Off Trade Kind are for identification purposes only, and proceeds will likely be credited in the type of cheque only. Your selections right here will inform your selection of brokerage. Share trading through this web site is a service offered by means of Westpac Securities Restricted ABN 39 087 924 221 AFSL 233723 by Australian Funding Alternate Ltd ABN seventy one 076 515 930 AFSL 241400 (“the Participant”), a participant of the ASX Group and Chi-X Australia.
In relation to investments, a buying and selling account is used as a way for an investor to purchase stocks. Before you acquire any services or products from Westpac Securities Restricted and the Participant, it’s essential to view the most recent Financial Providers Guides (FSG’s) issued by them. Margin buying and selling is extended by Nationwide Financial Companies, Member NYSE, SIPC, a Constancy Investments firm. As well as, I felt the brokerage structure and price of account opening and fees might be increased aspect when compared to different brokers who offer only Trading and Demat Account.
Additional, homeowners, employees, agents or representatives of the Institute of Trading and Portfolio Management aren’t appearing as investment advisors and may not be registered with the U.S. Securities and Alternate Fee or the Financial Trade Regulatory. XTB Restricted is authorised and controlled by the UK Financial Conduct Authority (FRN 522157) with its registered and buying and selling workplace at Level 34, One Canada Sq., Canary Wharf, E14 5AA, London, United Kingdom (company quantity 07227848).
Switching your banking and investment accounts to CIBC is easy and convenient, and comes with plenty of advantages. Improve your buying and selling efficiency or be taught to trade with City Index’s videos and tutorials. Demat account is sort of a bank account by which instead of money, the shares and securities you purchase are saved in dematerialized form. Use a CommSec Share Buying and selling Account to put money into a variety of ASX-listed securities, including Australian shares, using our award-successful trading platform.
Resulting from numerous factors (akin to danger tolerance, margin requirements, trading goals, brief time period vs. long term strategies, technical vs. basic market analysis, and other elements) such buying and selling could end result within the initiation or liquidation of positions which can be different from or contrary to the opinions and recommendations contained therein. The brokerage wants all this information to allow them to contact you to debate changes in your accounts to confirm gross sales or purchases and to let you recognize about a margin name.
This can be achieved by playing with totally different forex demo accounts by varied brokers. Motilal Oswal’s on-line platforms offer the best online trading and tracking experience across all gadgets, which is cellular app, net portal, EXE, smart watch and so forth. Buying and selling accounts are often associated with day trading. This rule requires a $25,000 minimal amount within the account to commerce more than three spherical journeys during a rolling five-day interval. FxPro Group Limited is the holding company of FxPro Financial Providers Ltd, FxPro UK Restricted, FxPro Global Markets MENA Restricted and FxPro Global Markets Ltd.
ActivTrades PLC is regulated by the Dubai Monetary Companies Authority below Agency’s reference No. F003511. Trade Traded Funds are funds that trade on a inventory exchange like bizarre shares. The supplier of the share trading service (weâ€, usâ€, ourâ€) reserves the correct to finish the Introductory Interval early on one business day’s discover within the event that a customer’s buying and selling activities exceed affordable limits as decided by us in our discretion. Consider it as a bank account for your shares as a substitute of money.
For those who hold shares in certificate type, you can simply add these in to your Trading Account so that you can manage all your holdings electronically in one place. Individual brokerages could apply margin restrictions on particular stocks as a result of volatility and brief curiosity. Where you want to promote shares that are held within the name of a belief or company you should have an existing Commonwealth Checking account or bank card in the identical name as the registered title on the shares.
You may access our on-line trading platform on the internet, cellular, desktop or use our call and trade facility, in order that you don’t miss out on any market opportunities. To view the bank account you nominated on your software type, select Portfolio > Profile after you might have logged into your CommSec account. Whole up your risk capital and examine this to the required minimal stability at each brokerage. Until otherwise specified here, the traditional phrases and situations, credit criteria, fees and charges apply to the share trading service provided by Westpac Securities Limited (ABN 39 087 924 221, AFSL 233723) by Australian Investment Trade Ltd (ABN 71 076 515 930, AFSL 241400).
Commerce On Your Phrases | Insurance | Mesothelioma | Forex
This is where you buy and sell stocks, options, ETFs and extra. In relation to investments, a buying and selling account is used as a manner for an investor to purchase shares. Earlier than you acquire any services or products from Westpac Securities Limited and the Participant, you have to view the newest Financial Companies Guides (FSG’s) issued by them. Margin buying and selling is prolonged by Nationwide Financial Services, Member NYSE, SIPC, a Fidelity Investments firm. As well as, I felt the brokerage structure and cost of account opening and costs can be increased facet when compared to different brokers who provide only Buying and selling and Demat Account.
Any Commonwealth Bank or CommSec account details supplied by you on the One Off Commerce Form are for identification functions only, and proceeds can be credited in the type of cheque only. Your decisions here will inform your choice of brokerage. Share buying and selling via this website is a service supplied by way of Westpac Securities Limited ABN 39 087 924 221 AFSL 233723 by Australian Investment Trade Ltd ABN 71 076 515 930 AFSL 241400 (“the Participant”), a participant of the ASX Group and Chi-X Australia.
Your online banking and funding accounts are protected by the CIBC Digital Banking Security Assure. Share Investing Restricted is a subsidiary of Australia and New Zealand Banking Group Restricted ABN eleven 005 357 522 (ANZ) however will not be an authorised deposit-taking institution below the Banking Act. In a single day means you hold the position past 4:00p.m. EST and you’ll be liable for a regulation T margin name and your brokerage would ask you to point out them an additional $25,000 which would be 50% of the $100,000.
Apart from any deposits within the Money Account, the obligations of Share Investing Limited don’t characterize deposits or different liabilities of ANZ. Let’s take another have a look at Intraday Margin which is often referred to as Pattern Day Trader Margin or PDT. Convenience, flexibility and great value aren’t all a CommSec Share Buying and selling Account offers. Now you’ll be able to fix your brokerage with our Flexi margin plan and luxuriate in lower brokerage rates on your investments. When you work for a registered broker supplier they’ll ask whether or not you were a director, a 10% shareholder or policymaking officer of a publicly owned company in addition to which company that might be. If you are a registered consultant of a brokerage agency or a ten% or extra shareholder in a company, then you could have particular disclosure obligations along with the data already provided.
A demo account can’t always reasonably mirror the entire market circumstances that will have an effect on pricing, execution and margin requirements in a reside trading setting. Whatever stocks you buy will probably be held in Demat Account. Read this Article , which may help you perceive more about how the Buying and selling & Demat account works. Account the place you hold your shares in dematerialize kind or in digital type. Day Trading Account is an account for intraday merchants, the place a trader purchase and sell their stocks throughout the similar day.
With a margin account you’re basically borrowing money from someone, like getting buyers into your trades. The SEBI passed a mandate in 1996 that every one your shares needs to be transformed to an digital format. As you undergo the account opening course of, your brokerage agency must know a good deal of personal details about you. When you use all of the horsepower of the $100,000 shopping for power you would have to close at the least a portion of that trade by the top of the day or must provide you with a regulation T margin call.
Notice that every online brokerage account signal-up course of is slightly different. A demat account gives you information about the shares you own together with the amount. Investors who trade by OTA nonetheless need to settle by their very own accounts. On T+1 day, the securities firm ought to complete the transaction allocation operations and can’t preserve the data not yet allocated. Trading international change, spot valuable metals and every other product on the Forex platform involves significant danger of loss and may not be appropriate for all investors.
Up to now, the buyers were given the bodily possession of shares, but now the shares are just credited in the Demat account of the investor. Your shares will probably be bought inside approximately two (2) business days after receipt of your request at the prevailing market price on the time the order is positioned. If client sends buying and selling order after the market closed, the order will show PO (Pending Order) Status because the dealer system has to verify the order details earlier than sending to SET System.
Day trading margin for non-IRA accounts is normally leveraged at four-to-one during market hours. One of the best ways to fund your account is via a bank wire instantly out of your checking or financial savings account into your new brokerage account. I ACKNOWLEDGE THAT MY BROKERAGE DOES NOT PRESENT INVESTMENT, TAX, OR LEGAL RECOMMENDATION OR SUGGESTIONS. The information contained on this web site doesn’t represent the supply of advice or constitute or type a part of any provide, solicitation or invitation to subscribe for or purchase any securities or other financial product nor shall it type a part of it or type the premise of or be relied upon in connection with any contract or dedication in any way.
You ought to be aware of all of the risks associated with international change buying and selling, and seek advice from an impartial financial advisor when you’ve got any doubts. As the identify implies, it is an account that helps you commerce within the stock market. To transfer shares held with the share registry into your CommSec Share Buying and selling Account it’s essential full an Issuer Sponsored Holdings to CHESS Sponsorship Switch Kind. A secure and easy to use on-line trading account with clear, honest and competitive pricing.
If you need the dealer to trade your account for you, you’ll be able to choose this. Demat account is generally for the people who would like to make investments in the market and maintain the shares within the digital type. Spend money on Australian corporations listed on the ASX , with brokerage from as little as $10.002 per trade. This would possibly include, but is not limited to, saving accounts, choices, shares portfolios, equities and funding in funds. Most, nevertheless, supply cash accounts at a participation stage of about $10,000.
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