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Proficient Level

Proficient Level - FX Trading School

This Section dives into the more advanced concepts in forex.

You will find these in your day to day trading.


PROFICIENT LEVEL UNITS - Ordered by Serial Number
"Whether it is trading or playing a game of chess or just planning your life, there has to be a plan in the first place. A plan is like a general guideline that is drawn upon to help you achieve your objective. In the same context, a trading plan is a guide that will help you to stay focused to achieve your objective. Of course, having just a trading plan is not sufficient. Traders need to follow their trading plan as well. As you can start to realize, a trading plan is something that is essential to your long term success. The pros of following a trading plan far outweighs anything else. You may be great at reading charts or understanding the fundamental aspects of trading. But all of this is pointless if you do not have or follow a trading plan. This article gives you the basic idea of what a trading plan is how you can build your…
"Just as there are different ways to bell a cat, the same goes with forex trading as well. Depending on a number of factors, forex trading is broadly classified into four main trading styles. Traders often make the mistake of thinking if one trading style is better than the other. The fact however is that a trading style simply reflects one’s personality. The risks of losing money is just the same, whether you are scalping or swing trading. At the same time, the potential to make profits is also equally the same. The way you achieve your trading objective of course differs in the style of trading that you choose. Finding a trading style is all about testing them out to see which methods works best for you. The trading strategy also determines your style of trading to a certain extent. In this article, get the basics of the different styles of trading most commonly used in the forex markets."…
"Forex scalping is way to trade the markets by taking advantage of the volatility in the markets. With forex scalping profits and losses are realized quickly. Traders of course need to pay attention their charts. Do not expect to become successful with forex scalping immediately. You will probably need a lot of experience and chart time if you want to scalp the forex markets manually. To be successful with forex scalping, you will need to be sharp and be positioned on the right side of the market. While the potential to make quick profits is high, the potential to lose money is also high. Forex scalpers also need to focus on things that other trading styles don’t have to bother about. If you are wondering how forex scalping works, then this article is for you. Learn about the basics of forex scalping and the things that you need to bear in mind if you want to use this style of…
"Among the different styles of trading, day trading is probably something that many will recognize. As the name suggests, day trading is all about trading during the normal business hours within your geographical location. With day trading, profits and losses can quickly rack up. Therefore, you need to be very skilled in managing your risk and get enough practice trading the markets. Unlike scalping, day trading can be a bit slow, but still it is action packed. Not many can afford to day trade due to their regular full time jobs. But for those who are able to day trader, they will notice that it is a lot more difficult than day trading is made out to be. Not every trader can manage the risks and the stresses that comes with day trading. In this article, we give you the insights into how to day trade the forex markets and also point out the things that you should bear in…
"Swing trading is the art of trading in the long term. As the name suggests, this style of trading focuses on the swing movements in the price. Long term trends are formed as price tends to retrace and bounce back and forth. Most of the swing trading strategies are based on capturing the underlying trends. But you can also find swing trading strategies that a bit shorter in nature and focus on the corrections or the retracements in the price. Swing trading is not suited for everyone because it is somewhat slower compared to the fast paced scalping or day trading. At the same time, swing trading can help you to become more focused and a disciplined trader and keeps you out from taking on risks that you can avoid. The potential to make a healthy profit is also quite high with swing trading. Learn about what swing trading is and how you can be successful with swing trading the…
"Just like stock markets have the buy and hold strategy, the same is applicable for the forex markets as well. Known as position trading, this is a style of trading where traders hold their positions for longer periods of time. Similar to stock investing, in forex, traders can either go long (or even go short) and hold on to that position that can span a few months to even a year. There are of course some inherent risks and advantages with position trading. For one, position trading is not suited for all forex traders. Even those who have some experience do not position trade due to the long term risks that are associated. But on the other hand, the profits one can make with position trading can be huge. As you might have already noticed, to be a good position trader, you need to have a lot of confidence in yourself and also be very patient to let the trade…
"For many traders, trading is all about buying and selling when their trading system tells them to. But did you know that the markets do not always remain in the same environment? You might have heard about the fact that the markets trend only 20% of the time. The remainder of the time, the markets tend to move in a sideways range. Applying a trading system that is built for trend based trading and using it in a sideways market can lead to big losses. This is because many traders do not realize that changing environments of the markets. From a sudden shift in the trend to a market shape and a strong sideways range, the trading environment can change quickly. A successful trader is one who is able to understand these changing trading environments and knows when to trade and when to stay out of the markets. In this article, we look at how traders should pay attention to…
"A ranging market is a term given to a market condition where price typically does nothing, but drift. This phase is also known as the accumulation phase. In this phase, price tends to build up momentum. In other terms it is also known as a period where institutional players are buying and selling and building up positions in the markets. Typically, after a sideways range you can expect to see a breakout in the markets. The direction of the breakout can be different. Sometimes, the breakout occurs in the direction of the previous trend, or at times, the breakout can occur in the opposite direction. No matter what, sideways markets are often seen as a period where traders can quickly trade or traders prefer to wait on the sidelines until a trend emerges. In this article, we looking what are sideways markets and how they work. We also give you tips on using technical indicators to identify when the markets…
"The markets, as you might know move in a zig zag fashion. It is very rare to see price move in a parabolic fashion. This zig zag movement of price is something called retracements in the markets. Price tends to retrace as it corrects itself over a period of time, while maintaining the prevailing trend. As a result, retracement strategies are quite commonly used in trading. But besides trend retracements, there is something else called trend reversals. Unlike a retracement, where the previous trend direction is maintained, with trend reversals, the trend direction changes completely. What this means is that while traders expect price to move in the direction of the previous trend, price ends up reversing direction completely. This can lead to a significant shift in the trading bias and potentially have a few losing trades as the stops are triggered. So what is trend retracement and what is trend reversal? We cover these two aspects of the markets…
"Divergence is probably one of the most sought after method of trading. It is a phenomenon and a widely used method by traders to spot potential retracements or reversals in the trends. Divergence is most adept when used in the context of the trend and support and resistance based methods. The concept of divergences is very old and was initially mentioned by Charles Dow of the famous Dow Theory. But the interesting part is that divergences can be spotted in any type of market, including the forex markets. Now a days, divergences are traded based on analyzing price and the oscillator. Trading with divergence requires a lot of practice and also the ability to familiarize oneself to the patterns that emerge. In this article, we give you the lowdown on what are divergences and how they are formed. You will also be able to identify the different types of divergences that are formed in the markets." Divergence, as the name…
"Divergences are leading indicators which can signal a potential correction in price. It is due to this feature that divergence based trading methods are so popular. Another fact is that divergences are formed in the context of a trend, making it popular among trend traders as well. But divergences, simple as they sound are not always that easy to trade. You will make quite a few mistakes initially. The biggest hurdle is in training your eye to spot the divergences that are formed. Even after mastering this, you need a lot of practice time to trade effectively with divergences. Remember that divergence based trading is not a mechanical trading system. There is a bit of discretion involved. This is where the above five rules apply. You can easily lose money trading divergences, just as easily how you can make money with this method. In this article, we introduce you to the concept of divergence and some traps to avoid." In…
"Trending markets are one of the most cited market phases among trader. Regardless of which markets you look at, trending markets are most often talked about. A trending market occurs when the market positioning leads to either a demand in the prices, thus leading to higher prices or there is very less in the markets leading to a supply in the prices which leads to prices falling over a prolonged period of time. Trends are most commonly occurring in commodity markets, but you can also find trends in the forex markets. The concepts of trending markets was first postulated by Charles Dow who observed some recurring patterns in the markets. In this article, we take a look at what are trending markets and what are the different types of trends that are formed. Because trend based trading is one of the most commonly used type of trading, it is important for the trader to understand how trending markets work." Trending…
"Fibonacci trading methods belong a type of technical analysis approach that makes use of Fibonacci numbers. These numbers are based on the discovery by Leonardo de Pisa who is attributed to finding the golden ratio. The golden ratio is something that exists not just in manmade architecture but also in nature. The nautilus shell is often used as an example of the golden ratio. In the financial markets including forex, the Fibonacci ratio is also used. Traders use specific Fibonacci numbers as potential support and resistance levels. Fibonacci retracements and extensions are two commonly used terms you will come across. These are nothing but potential levels where price can retrace or levels where price can continue to trend to. While there is some mystical approach to using Fibonacci numbers, the fact that they work is because a lot of traders use and constantly monitor the Fibonacci retracement numbers. Thus it becomes a sort of a self-fulfilling prophecy. Read more about…
"The Fibonacci based retracement method is one of the most common ways for trend traders to trade a trend. Using the retracement levels based off the Fibonacci numbers, traders are able to pick the turning points in the price. This gives them the optimal price point from which they can enter into a trend. While it sounds simple, to perfect the art of picking turning points in price, requires a lot of practice. In this article we show you how you can use the Fibonacci retracement tools in order to find the turning points in the trend. You will have to make use of two other technical indicators in order to build this. The Fibonacci retracement method can be in itself a complete trading system. But before that, we also give you an introduction on how to configure your Fibonacci retracement level. Find out how you can use the Fibonacci retracement tool to trade the trends more effectively." Fibonacci retracements…
"Moving averages are the basic technical indicators built upon mathematical values. These are one of the oldest technical indicators based on which, one can build up either a complex or a simple trading system. This includes automated trading systems as well. As the name suggests, a moving average simply shows the average of the price to which it is applied. The name moving comes because these average prices are constantly plotted on the charts as and when they occur. There are different types of moving averages that can be used. In this article, we take a look at what are moving averages and how they work. You will also learn about the different moving average types and how they differ including how using the lookback period can affect the value of the moving average. As a trader, it is quite likely that you will use moving average indicator at some point in your trading. Therefore, this article gives you the…
"Moving averages are one of the oldest and commonly used technical indicators. This indicator is used as a trend determination indicator. The moving average allows traders to understand the price, based off technical analysis which uses indicators. There are a number of ways to gauge the trend in the markets. Therefore, you will find traders making use of different methods by applying the moving averages to the price. In this article, you will learn three ways on how to determine the trend in the markets using the moving average indicators. The methods outlined in this article will enable traders to either build up on their technical signals or build a completely new trading system by itself. In the previous section we covered the different types of moving averages. Learn how you can make use of these different moving averages to understand whether price of a security is in an uptrend or in a downtrend." Moving averages are one of the…
"In the world of trading, Holy Grail is a term that is often used. A holy grail is a trading system or a technical indicator that can generate profits. But in reality there is no such trading system that can be profitable 100% of the time. Traders tend to often wonder or continue to seek the best technical indicator in trading. The truth is that such an indicator or a trading system seldom exists. To be profitable with forex, traders should firstly understand that losses are something that cannot be avoided. This is true for even the best and the most experienced traders of all times. Instead of seeking for the best technical indicator, traders should firstly understand how the different technical indicators work and what information they convey. In this article, we look in depth into how technical indicators work and why there is no such thing as a best technical indicator." As traders, at some point or the…
"Volatility is one of the key aspects when it comes to assessing the price of a security from a technical perspective. When volatility is high, the price tends to deviate quite a bit from its average level. This fluctuation can be in either direction. Volatility offers trades the opportunity to make profits but they are also risky at the same time. It is important that traders should understand how volatility works and how they can use this information to their advantage. In this article we look at some of the ways traders can measure volatility and use it for their trading purposes. We also give you a brief introduction into what volatility is all about and what it means for traders. Volatility is something that traders should look into especially when they are looking at building a technical trading system. Besides trend, momentum, volatility is also one of the factors that is used when applying the concepts of technical analysis."…

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