Forex Pivot Point

Pivot point is a very popular method in Forex for determining buy-sell signals. Pivot points are widely used by traders to mark reversal points (where the price goes in the opposite direction).

At the pivot point the chart is divided into several sections. The middle point is the pivot point (PP). Market bullish if the price is above the pivot point (upward movement of the market) and market bearish if the price is below the pivot point (downward market movement). R1, R2 and R3 are above the resistance level and pivot point (PP). S1, S2 and S3 are below the support level and pivot point (PP).

 

Here,

    PP = Pivot point
    S = Support
    R = Resistance

 
How pivot points are calculated:

In case of pivot point:

    High = Yesterday's price went to the highest price
    Low = Yesterday's price went to the lowest price
    Close = Yesterday the market closed at that price

Calculation:

R3 = High + 2 x (PP – Low)
R2 = PP + (High – Low) = PP + (R1 – S1)
R1 = (PP x 2) – Low
PP = (High + Low + Close) / 3
S1 = (PP x 2) – High
S2 = PP – (High – Low) = PP – (R1 – S1)
S3 = Low – 2 x (High – PP)

   

Forex Chennels

If we take the trend line theory one step further and draw another line parallel to the uptrend or downtrend line, a channel will be created.

Channels are another tool of technical analysis that helps us to determine the best price to buy or sell.

To draw an upward channel, draw a line parallel to the uptrend line and connect it to the recent bottom points. This line should be drawn while drawing the trend line.

To draw a downward channel, you need to draw a line parallel to the downtrend line and connect it to the recent top points. This line should be drawn while drawing the trend line.

When the price hits the bottom trend line, you can buy. And if the price hits the trend line above, you can sell.

Channel 3 types:

   → Upward channels (higher highs and higher lows)
   → Lower channels (lower highers and lower lows)
   → Parallel or sideway channel (ranging)

 

 


Forex Trend Lines

One of the most common and popular tools in technical analysis is the trend line. The trend line is easily understood. If the trend line is drawn correctly, it gives better results than any other method. But most traders are not able to draw the trend line correctly and forcing the trend line to be drawn does not make it effective.

To draw a trend line, you have to draw a line with the trend line tool from Meta Trader's tools.

The low points have to be connected through a trend line and the high points have to be connected through a trend line.

If a candle crosses the trend line and goes up or down, then the trend line is broken.

Follow the chart below:


There are 3 types of trends

    Up Trend (higher lows)
    Down Trend (lower high)
    Sideway/No Trend (ranging)

In uptrend, the market is upward. So you can buy. In downtrend, the market is down. So you can sell. In a sideway trend, the market tends to move in a certain range. So it is better not to trade in sideway trend.

   

 

Forex Support and Resistance

If you understand support and resistance, you can understand how the Forex market works.
This method will help you to open the trade at the right time and get you out of the trade at the right time.


Support and resistance levels can be found in different ways.

Once the market support level breaks, the price usually falls further and the next resistance level acts as support.


Again, when the market resistance level breaks, the price usually rises further and the next support level acts as resistance.
So if you break the support you should sell and if you break the resistance you should buy.

 

 
 


Forex News Impact

Many Forex news, job reports, speeches are published every day. These affect the market. So many people trade by targeting these news. But should we trade all the news? Not all news has the same effect. Let's see what kind of news comes.

Everyone mainly follows Forex Factory and Myfxbook for forex news. Because they publish the best news and publish first. You will see one of the above 4 signs next to each news there. So, as soon as you see the sign, you can understand the effect of that news and you can trade accordingly. High Impact News implies that it can have a huge impact on the market. The impact of medium impact news is relatively small. The impact of low impact news is minimal. The white sign indicates that the news is not economic news, such as Bank Holiday. Since Red High Impact and Orange Medium Impact news have a big impact on the market, you can trade them or find out what kind of impact they can have on the market.

   

How to Understand the News?

We can help you to understand some basic things.
First we will look at the formula.

Halifax HPI m / m The formula for this news is:
Actual> Forecast = Good for currency

Now we will know what is Actual, Forecast and Previous?


See in this screenshot Previous 0.2%. This means that earlier when the news was published, the actual result was 0.2%.
Forecast means that the idea is that the result of the news can come to 0.5%. And Actual is the result that will come this time.
The result that will come in Actual this time, will be considered as Previous in the next news.

Now we come back to our formula. Here it is said, Actual> Forecast = Good for currency.
This is GBP news. Therefore, if the result of this year's Actual is higher than Forecast (0.5%), it is good for GBP.
And if Actual's results are bad from Forecast, it's bad for GBP.

Here comes Actual -1.2%. Therefore Actual <Forecast. So Bad for currency (GBP).
So, this formula will work here,

Actual> Forecast = Good for currency
Actual <Forecast = Bad for currency

Here, the bad news for GBP is the GBP's bad for currency. So it will have an effect on GBP pairs. For example, GBPUSD may fall, EURGBP may rise, and so on. But not always the effect of the news, but often the opposite effect.

   

 

Forex News Trading

Forex releases some important news almost every day. Upcoming news is available in the Economic Calendar section of various brokers. Before the news is released, various organizations survey and create a forecast value of how the news can come. These companies have big business news agencies like bloomberg, cnbc. Coming worse than this forecast value means that the economy of that country is doing worse, and doing better than that value means that the economy of that country is doing better. As soon as the news comes, the price will go up a lot. According to the fundamental theory, the news of which country's economy is doing well will actually increase the currency of that country and then the news that the economy of that country is doing bad will actually be reversed.

News trading is a blessing for those who do scalping because 30-50 pips can move within 5-10 minutes of news release. It all depends on how important the news is.

In the attachment file, see how much pip movement can take place in which news of which country and how much news figure can be traded.

Tradable Figure is how much change from the forecast of the actual figure to the actual figure is actually worth trading. Remember that the above tradable figure is an absolutely moderate figure. This means that if the actual value changes a little, the price will definitely move. But in reality, little change is needed to trade. A little less change but no problem. For example, us Nonfarm payroll is a very sensitive news. It has a tradable figure in 70K difference. But the price will move a lot even if it is less than 70K difference.

Movement range is how many pips can be moved. In fact, the price will increase and in fact the price will decrease.

Different brokers increase the spread during news releases because there is more volatility in the market at that moment. So if your account is not fixed spread, don't be surprised if you see more spread. Requests may occur if your broker is a market maker. Again sometimes the platform can hang. Even if the trade is open again, it cannot show. In that case, if you open the trade again, you will see 2 trades later. Again, the state of electricity in Bangladesh, after opening the trade in the news release, if the electricity goes off, think about what to do. This is because the actual value that comes after the news release is sometimes corrected which is called Revise. As such the jobless claims of the US are real lots. Lots of jobless claims mean a lot of job crises in America. This means that the American economy is in a bad state. You bought EUR / USD. The later revised figure is actually not that bad. Then the market will turn U immediately. At that time you have to be in front of the screen to avoid any unexpected accident. So be careful in news trading.

Before trading in news trading real account, you will trade the demo and you will see how well you can handle the market volatility. 

 


Forex Sentiment Analysis

Every trader has his own opinion or explanation as to why the market is moving in this way. What I, you or Pips hunter market feels about and is not positioned accordingly, helps to create new market sentiment later on. All traders are reflected in the trade market.

So if you alone feel nothing about a trade that the market will go that way, you can never move the market in your favor. Even if you are convinced that the dollar will rise, but if everyone is in a bearish (sell) mood, there is nothing you can do.

It's up to you how you understand market sentiment, whether it's bullish or bearish. This will be discussed later. It is up to you to decide whether to incorporate market sentiment into your trading strategy.

If you want to ignore market sentiment, you can. But it will only bring you lose.

 

 


Forex Technical Analysis

 In technical analysis, traders trade based on price movement.

The key is that a trader can see the past price movement, understand the current price movement and gain an idea of ​​what the future price will look like.

Your chart will have all the previous price movement charts. So you can see what happened before if you want. You must have heard, "History is reflected again and again"?

Such is the technical analysis. What happened in the past, we can hope that will happen in the future. If a price level has previously acted as support or resistance, traders will have an eye on that and they will trade based on that.

Through technical analysis we try to match the same pattern that happened before. And since it happened before, we hope that the same thing may happen again.
 

When someone says the word technical analysis, the first thing that comes to mind is the chart. Charts are used in technical analysis because historical data is most easily presented through charts.

You can look at the previous data in the chart to understand the trends and patterns which can give you some good trading opportunities. Price pattern, indicator signal can help you get a good idea about the market.

The technical analysis depends on how you do the analysis.

Johnny and Ronnie might analyze by looking at the same charts and indicators, but they may not get the same trade idea, they may get different trade ideas.

The fact is that you need to know the basic concept of technical analysis. We need to know about Fibonacci, Bollinger Bands, Pivot Point, Moving Average etc.

 

 


Forex Fundamental Analysis

 Fundamental analysis is the analysis that is done based on economic, social or political etc.

In fundamental analysis you need to notice which country's economy is doing well and which country's economy is going bad. How and why various events, including the rise in unemployment, play a role in the country's economy, all these issues you need to pay attention to in fundamental analysis.

If a country's current or future economic situation is good, then that country's currency will be stronger. The better a country's economy, the more foreign investors will be interested in investing in that country. So they have to buy the currency of that country and the value of that country's currency will increase further. If Bangladesh's economic situation had been better, more foreign investors would have been interested in investing in the country and expanding their business. As a result, the value of Bangladeshi money won out a lot. The same is true of other currencies.



One thing is fundamental analysis

  →   The economic condition of the country is good = the value of the currency is high
  →   The economic condition of the country is bad = the value of the currency is low

Let's say the UK. S. The dollar is getting stronger because the US economy is doing better than before. Then they may need to raise interest rates to control inflation.

Higher interest rates make dollar-dependent economic assets more attractive. So if someone wants to buy or invest those assets, they have to buy their dollars first. And as a result, the value of the dollar will increase.

Later in other articles of fundamental analysis you will find out about different news, their effects and how to understand and trade them.

 

 


Forex Market Analysis

 You need to analyze whether the price will increase or decrease. Through analysis you can get the right idea to trade. There are basically 3 types of analysis

   → Fundamental Analysis
   → Technical Analysis
   → Sentimental Analysis

What kind of analysis can you ask? But 3 types of analysis are important.

It's a lot like a 3-foot tool. If one of its legs breaks, the tool will break and you will fall to the ground. In the case of Forex too, if one of your analyzes is weak, it could be the cause of your massive loss. So all kinds of analysis is important.

 

 



Calculation of Profits and Losses in Currency Trades

In the Forex market you will buy or sell.

It is very easy to open a trade. The process of opening a trade is simple and if you have experience trading in the stock market, you will understand it sooner.

Suppose you bought 10,000 euros at EUR / USD at an exchange rate of 1.1600 for $ 11,600. After two weeks, the EUR / USD exchange rate rose to 1.2500. Then if you sell it for $ 12,500, you will make a profit of $ 600.

 The exchange rate is the ratio of the price of one currency to another. For example, the exchange rate of USD / CHF indicates how much U.S. $ 1 Swiss franc can be bought for 1 dollar, or 1 U.S. S. How many Swiss francs do you need to buy dollars?

How to read forex quotations

In each trade you buy one currency at a time and sell another. So the price of currency pair in the forex market is expressed through quotations.

The foreign exchange rate of GBP / USD is as follows:


The currency before slash (/) is called base currency and the currency after slash (/) is called quote currency.

Here GBP is the base currency and USD is the quote currency.

When buying, the exchange rate indicates how many units of Quote currency you need to pay to buy 1 unit of base currency. For example: 1.5125 USD for buying 1 British pounds. You have to pay dollars.

When selling, the exchange rate indicates how many units of Quote currency can be obtained by selling 1 unit of base currency. For example, if you sell 1 British pound, you get 1.5125 U.S. dollars.


Base currency is the main basis of buy and sell. If you buy EUR / USD, you are buying base currency EUR and selling Quote currency USD at the same time. Simply put, buy EUR, sell USD.

You will buy the currency pair if you believe that the base currency will be stronger than the Quote currency. You will sell it if you think the base currency will be weaker than the Quote currency.

Long / Short:

First you have to decide whether you will buy or sell.

If you want to buy (buy base currency and sell Quote currency), it means you want the price of base currency to go up and you will sell it at a higher price. In the language of traders it is called long (long) or taking long position. Remember, long = buy.

If you want to sell (sell base currency and buy Quote currency), it means you want the price of base currency to go down and you will buy it at a lower price. In the language of traders it is called short or taking short position. Remember, short = sell.

2 prices are shown in the Forex quotation. Bid and Ask. In almost all cases, the bid price is lower than the ask price.

A bid is a price at which the broker wants to buy the base currency instead of the Quote currency. That is, the bid is the best price to sell.

Ask is the price at which the broker wants to sell the base currency instead of the Quote currency. That is, Ask is the best price to buy.

The difference between bid and ask is known as spread.

The bid price above the EUR / USD quotation is 1.3629 and the ask price is 1.3630

That is, the spread here is 1 pips.

If you click cell, you will sell at 1.3456. And if you click buy, you will buy at 1.3458.

 

 

Forex Currency Pairs

Forex trading is the buying and selling of one currency at a time. Currency is traded through any broker or dealer and in pairs.


For example: Euro and EU. S. Dollar pair EUR / USD or British Pound and Japanese Yen pair GBP / JPY.

When you do Forex trading, you need to buy / sell through Pair.

Suppose, at the two ends of this rope are the economic conditions of the two countries. Exchange rates fluctuate based on when a currency is strong.
Major Currency Pairs:

The following currency pairs are considered as major currency pairs. These currency pairs are USD pairs and are traded instantly. These major pairs have the highest liquidity and are the most traded in the world.


 

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