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Gaining an Edge

There are numerous scientific studies alleging that forecasting market movements is practically impossible. In 2013, Eugene Fama, Lars Peter Hansen and Robert Shiller got the Nobel Prize in Economic Sciences for a study that questioned our abilities to accurately forecast short-term asset price changes.  This raises the question of how traders can gain an edge in the market and consistently profit. 

I personally use technical analysis (the study of price action) to identify trading opportunities.  I think it is important to distinguish what we are doing as traders - as a technical analyst however, at no time do I attempt to forecast – I think this should be left to economists

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Common Chart Patterns: A Forex Cheat Sheet

Making money on the forex market—or any other exchange, for that matter—can certainly be tricky. But thanks to a number of chart patterns, you can learn to anticipate price movements and act accordingly. Making money doesn’t have to be impossible.

Unfortunately, with so many different patterns out there, it can be difficult to figure out which ones are best for determining where prices will go in the near future.

To make your job easier, we’ve outlined five of the more helpful continuation and reversal patterns below in a forex cheat sheet. Become familiar with each of them to make better trades.

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End of Day Forex Trading: How to Find Signals and Potential Breakouts

 

In trading, timing is everything. You might be able to anticipate market changes, but if you don’t know when those changes are scheduled to occur and how to time your entry and exit points accordingly, you aren’t bound to reap the reward. The most reliable and profitable forex strategies are those that consider timing as it relates to the trader’s chosen market, strategy, and trading style.

End-of-day trading is a deliberate forex strategy in which traders choose to place trade orders after the New York stock market has closed for the day. This allows them to outline their strategy and create pending orders for the next day while time is effectively paused (i.e., when no trades are occuring).

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Themes to Watch in 2019

Themes to watch in 2019: Mixed Bag in Asia, What Next for the Fed? Deal or No Deal? Critical Times for Britain

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Introduction to the Candlestick Pattern – Marubozu

Technical analysis is the study of actual movements in the price of a financial product.  However in my opinion, technical analysis is less about trading and more about the study of mass psychology.  We study the way people react in certain situations in the market, which is quite prevalent when identifying and trading using chart patterns. 

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3 Risks to Consider Before Trading Currency

The forex market is the largest investment market the world, and there are a number of different ways to trade it—spot transactions, currency swaps, options, foreign exchange swaps, and more. But, as with any kind of trading, there are risks to be wary of when you dip your toes into the game. To help you understand these risks, here are three things to consider before you start forex trading.

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Forex Target Trading: What Is It and How Does it Work?

Target trading is one of the most popular forex trading strategies. If you can identify how the market is trending and anticipate how price will move, you can use that information to preemptively establish profit-taking points, or targets, at which to exit or partially exit your position. A grid trading strategy is a common form of target trading whereby traders preemptively create conditional stop entry orders and set a profit target for each pending order.

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Developing Your Trading Strategy

One of the most common questions I am asked is how you can develop a trading strategy to use in the foreign exchange markets.  Like trading any product, there is a time-tested process to work through to develop a trading strategy or plan that you will be able to implement with confidence.  As simple as it sounds, you need to work out what will and won’t work in the market as you look to develop some trading rules. 

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Forex Trading Basics: Understanding Swap Fees

In Forex, all trades have a timeline of two days. If, at the end of that period, a trader wishes to remain in a trade rather than settle up for the amount they’ve borrowed, they must pay interest to retain those funds and hold their position for another day. The “swap rate” represents the interest rate differential between the two currencies being traded. Because interest rates are influenced by market conditions, swap rates are constantly in flux.

If you know the current swap rate for a currency pair, you can calculate the swap or “rollover” fee you’ll owe or accrue if you decide to hold your position overnight. This knowledge will help you understand the costs of holding your position open and allow you to weigh those costs alongside potential risks and rewards to mitigate risk.

To accurately calculate the swap fee for a currency pair, you need to know the current swap rate for the currency pair in question, your net pip value on that trade, and the number of days you’d like to hold your position. Although it may sound like a lot to navigate, the formula for calculating swap fees is fairly straightforward:

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Valutrades November 2018 Market Recap

Several significant issues have lingered through November including Brexit, in which the Bank of England (BOE) have recently warned the nation of some significant consequences should the exit be disorderly.  Britain risks suffering an even bigger hit to its economy than during the global financial crisis 10 years ago in a worse-case scenario, according to the BOE.  The U.S. Federal Reserve have also recently changed their tune as Fed Chairman Jerome Powell said he considers the central bank's benchmark interest rate to be near a neutral level, an important distinction from remarks he made less than two months ago.  The markets have generally welcomed this change.

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