| Forex or currency day trading has only been | | | | or on an angle (a trend line) will indicate one of the |
| accessible to trade for retail traders like you and me | | | | three price movement directions. |
| over the last twelve years - it is still in it's infancy. | | | | Support and Resistance |
| Just imagine if you can take advantage of day | | | | Any currency day trading technical analyst must |
| trading now - just imagine how developed this area | | | | understand and implement this. Support and |
| will be in a few years time! Discover how to profit | | | | resistance are the levels of safety from previous |
| from this market now and benefit from | | | | levels (the security net areas spoken about earlier). |
| developments in the coming years. Exciting times are | | | | Both can be defined as the areas where price will |
| ahead! | | | | move to and then stall. In a rising market price will |
| The Forex market is in constant motion - it only | | | | rise to resistance levels, stall and a possible |
| closes during the weekend. Consequently there are | | | | retracement will occur. In a falling market, prices |
| many different strategies you can develop which can | | | | gravitate to support levels where the possibility of a |
| fit into your existing lifestyle. Currency day trading is | | | | trend reversal is greater. |
| one of those strategies. Typically a trader will open | | | | The most powerful trades are those where price has |
| and close a trade or position during the course of the | | | | stalled at a support or resistance level and then |
| same day. | | | | 'break out' giving the trader a move of considerable |
| OK so you how can you profit from 'reading' a bunch | | | | pip value. With currency day trading, some chart |
| of charts then? To some this can sound technical but | | | | set-ups used on their own can give false indications, |
| honestly, the simpler you make your trading, the | | | | which is why a trader should use other charting tools |
| easier it will be AND the more profitable you will be! | | | | to identify this move better. |
| The trader observes the price and time movement | | | | So what other tools do you need? Well it's helpful to |
| on a chart. These include bars, lines, point and figure, | | | | have confirmation from other types of indicators but |
| and Japanese candle sticks - the most favored | | | | taking note the best strategies are the least |
| method. Candlestick charts originated from Japan in | | | | complex. |
| the rice trade during the 1700s. The method is still | | | | Bollinger Bands and Relative Strength Index (RSI) |
| used today, together with further influence from | | | | Both of these will be helpful to you and your trading |
| ancient Japanese ways and traditions. This chart type | | | | strategy. Bollinger Bands are good for determining |
| will be used in currency day trading as well as | | | | price volatility or relatively how much change has |
| currency intra-day trading, scalping methods and | | | | occurred in price movement. An indicator like the |
| other forms of trading. | | | | Relative Strength Indicator gives you exactly that - |
| We can clearly see this evolving in front of us due to | | | | the relative strength of price movement. When |
| live data feed charts and identifying some basic chart | | | | currency day trading, it's good to note the set up |
| patterns. The goal is to trade with minimum risk for | | | | you will want is to make sure these indicators show |
| consistent and profitable gains - easy to say but a | | | | the values of the extreme levels of the scale. For a |
| little harder to do! Consider adding the following to | | | | stronger indication the RSI should be either at the |
| your currency charts when day trading. | | | | very top of the scale, or the bottom. If the RSI line |
| Channel or Trend Lines | | | | is hovering somewhere in the middle, the strength of |
| Here's something to make it a little easier. Price | | | | the indicator and therefore price movement is not |
| movement works in only three directions. Price will | | | | great. |
| move up, down or sideways. You have to decide | | | | This method picks out the most telling indicators and |
| which of the three ways your chosen currency is | | | | chart movements. Keep your currency day trading as |
| moving. You do this by drawing lines on your chart | | | | simple as you can - not forgetting the importance of |
| from the high points of each candlestick which has | | | | a stop loss and money/trade management strategy. |
| formed over your chosen time period. This will be | | | | Plan your trades and then execute and trade your |
| either the close or the very tip of the shadow | | | | plan. Keep reading for more articles on this subject or |
| formation of the candlestick. Three or more touches | | | | visit the link below to read more now! To Your |
| in a straight line which can be horizontal (in a channel) | | | | Success! |