Most strategies or techniques in technical analysis involve the use of indicators.

But more often than not, most traders use indicators for all kinds of situations which tend to render them quite ineffective.

Just as a carpenter’s toolbox has different instruments which are used for different purposes, each indicator in the tool box of a trader has to be used for a particular situation.

In our Live Trading Room we teach, among many other things, a series of lessons we call “Know your Indicators”, which introduce specific indicators, and go over the characteristics and drawbacks of the same.

First and foremost, there is one point that a trader needs to keep in mind - all indicators are lagging, and it is ultimately price which is the only leading indicator.

Indicators should be used just as they are described – as “indications” for price movements and not as confirmations. While this does not diminish the importance of the indicators, one must remember that a change in price will cause a change in the indicator - not the other way round.

Indicators, nevertheless, play an important part in the building of strategies and techniques - but only if one applies them correctly.

The DMI/ADX is one of the most effective and yet underused indicators. If used with the correct parameters, it can be a very effective trading system on its own. (more…)

Hey Traders,

This is the third episode of our Secrets of MetaTrader video series. Today’s lesson is dedicated to installing indicators on your MetaTrader 4 platform, without having to dig around on your “C” drive looking for the right folder.

We’ve had A LOT of requests for something like this, so I hope you all find this extremely helpful and effective! If you ever need to install indicators manually, this is the recommended way.

Let me know if you have any questions or comments, and enjoy the video!

Hey Traders,

Welcome to another episode of Secrets of MetaTrader. Its been a while since we posted another update, but it was surely worth the wait.
Our second lesson discusses duplicating objects on your charts - something many traders can find very useful when plotting channels, Andrews Pitchforks, etc.

Another topic in today’s video is stacking indicators - placing one indicator on top of another in a separate indicator window. This is a very versatile feature that many traders ignore because they don’t know about it.

Let me know if you have any questions or comments, and enjoy the video!

In the forex markets, it’s worth knowing the characteristics of the currency pairs, since each of them exhibit distinct identities.

Most of the currencies exhibit similar movement patterns, which can help a trader confirm price movements.

One such close relation can be found between the EUR/USD & USD/CHF.

The price movements of these two currency pairs are absolute mirror images.

In short, they have an inverse relationship: If EUR/USD is rallying, then USD/CHF should have downward movement, and vice-versa. (more…)

Confirming the long term trend of a particular instrument with another correlating factor only increases the probability of a profitable trade.

We are attempting a predictive write up here, since there are similar patterns developing in EUR/USD and Spot Gold.

As of today, the overall situation seems to be favoring the Us Dollar, as the technicals are indicating some respite from its recent downfalls.
This may not necessarily be a reversal, but we can certainly expect a retracement of the US Dollar to the upside.

Let’s first have a look at the close relation between the movements of EUR/USD and Spot Gold.

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Many scoff at the idea of “Forex for a Living”.

The disbelief in this idea is further encouraged by tales of trauma received by many an unfortunate trader. We have all heard the horror stories, the tragic accounts of so-called “newbies”, and are tempted to dismiss the idea of trading for a living right off.

On the other hand, we have success stories.

Traders come forward to say - “Yes, it’s very possible! Look at me, I live off my trading.” Some people who read or hear such talk say, “I think he’s a dirty liar!”. They think, “If he has money, its because he was rich before – it wasn’t trading that made him so!”, or “I don’t know how much he lost before he made a profit.”

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The Pivot Point System is a technique developed by floor traders, to help ascertain where the price is relative to previous market action. It can be classified as a technical indicator derived by calculating the numerical average of the high, low and closing prices, of any currency / index / stock etc.

A look at market movement tells us that price always fluctuates between a level of support and a level of resistance. Properly identifying key support and resistance levels can improve the ability to enter, exit, and manage your trades.

The pivot point is a level at which the sentiment of the market changes. It can tell us where the sentiment of traders and investors changes, from bull to bear or vice versa.

The main advantage of this technique is that it is price-based as opposed to indicator-based. By the time most indicators generate a signal, the move is already well under way. By following this system, one can get into a trade before the indicator-following traders, and be well into the trend when a signal is just being generated on a stochastic or other oscillator.

In its basic interpretation, we can say that if the market breaks the Pivot level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand if the market breaks this level down, then the sentiment is bearish, and is expected to continue its way down.

Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible. (more…)

Here at FX Instructor we like try to try new things on for size now and then. In our Live Trading Room, I’ve seen countless times how people spend months, even years trading without knowing various shortcuts and tricks that could save them time and free their attention to focus on what really matters - trading!

So, this inspired me to start a new video series, “Secrets of MetaTrader”, which I hope will open the eyes of many traders out there who are still not getting the most out of the MetaTrader 4 platform. Eventually I hope to expand the series to other platforms as well.

Our first lesson deals with putting price levels next to the Fibonacci Retracement lines - one of the most commonly ignored features that MetaTrader provides.

Let me know if you have any questions or comments, and enjoy the video!

Our third FX Instructor video demonstrates the use of our FXI Divergence Detector indicator during a Live Trading Room session. The indicator is designed to visually indicate divergence and hidden divergence.

Be sure to subscribe to our YouTube channel to be notified of any future releases!

Stay tuned for future video releases by FX Instructor!

I’ve recently posted a new article on the Trade2Win.com website, recommend you stop by and check it out. I believe it can be very informative for forex traders. Article exerpt:

If there is one thing that a trader would want to know for certain, it would be to catch the bottom or top of a trend.

But simple as it sounds, it is easier said than done.

Knowing that a certain price wave is completed, or is just a retracement in the larger trend, becomes more of an art than a science.

In such situations, using multiple sources of confirmation helps to avoid the potential false signals, and preserve our capital for only those situations that provide us with the most favorable risk to reward scenarios. Keeping that in mind, we will use two very different indicators – the ADX (Average Directional Movement Index) and the PSAR (Parabolic Stop & Reverse) - to form a system which should help us to trade as close to the top / bottom as possible.

The rest of the article can be reached by clicking here.