Supply demand and absorption forex trading

Trading forex on the daily chart

Why Trading the Daily Chart Will Make You A Better Trader,BACKGROUND OF TRADING OFF THE MT4 DAILY CHART FOREX TRADING STRATEGY

29/7/ · BACKGROUND OF TRADING OFF THE MT4 DAILY CHART FOREX TRADING STRATEGY. We all know that a forex market will trend and consolidate. It will do the same In this guide, you’ll learn 3 ways to trade on the daily chart. Mainly we focus on daily time frame forex trading strategy. Here is the truth, Most forex traders don’t even like to talk about the 16/11/ · Daily Forex Strategy. Trading forex on the daily charts has many advantages. It requires less time analysing charts and filters out a lot of market noise when compared to Also, price actions in daily timeframe have more value than lower timeframes. This is because a Daily candle reflect whole trading activities in a given day or in another word a daily candle 22/10/ · This is not true. Daily candlestick shows us the direction of the market AT LEAST for the next trading day and this is very important for the day traders, also known as intraday ... read more

Candlestick 3 has broken out of the Bollinger Lower Band strongly too, but candlestick 4 is not as strong as I want. So I ignore the signal that candlestick 3 and 4 form. However, candlestick 5 is too strong to be ignored its Bollinger Lower Band breakout, its size and its bullish body. So I go long. The stop loss will be around the candlestick 5 open price and the target will be x3 of the stop loss. While the market is still bullish, candlestick 6 forms a strong breakout.

However, it has to be ignored for two reasons:. First, the signal that candlestick 5 has formed was TOO strong and it could still move the price up. Second, candlestick 6 has to be confirmed by the next candlestick.

Novice traders always ask what time frame is the best to trade. Most platforms support different time frames from 1min to monthly. Even some of them support exotic time frames like 10min or 2hrs. My goal is to convince you to stop using the short time frames like 1min, 5min, and even 15min and 1hr, because it will result in nothing but loss.

It takes 24 hours for each of the candlesticks to form. Therefore, each candlestick is the representative of the past 24 hours movements and events. This is a big advantage because the movements and events of the past 24 hours can have a strong impact on the movements of the next 24 hours at least.

And this is a good opportunity to take positions and make some money. Similarly, a 5min candlestick is the representative of the past 5min movements. And nobody knows what will happen during the next 5min.

The patterns, support and resistance lines and levels are less reliable on the shorter time frames. Therefore, your stop loss will be triggered easier and your success rate will be lower. With the short time frames, you have to deal with more noise and false movements. Few years ago, even one hour time frame was strong and reliable enough to trade, but now it is not reliable anymore, because Forex market has changed a lot and the volume of the transactions is increased dramatically.

When 1hr is not reliable, what do you expect from 5min and 15min charts? When I trade the daily chart, I do not have to sit at the computer several hours per day. Day traders have to sit at the computer and gaze at the price charts several hours every day.

They get tired and frustrated, especially when they cannot locate any trade setup, or when they lose in a trade after several hours of monitoring the charts. Sitting at the computer for several hours per day can cause physical problems too. After a while you will experience neck, shoulders and back pains.

It affects your vision, and it is possible you experience headaches too. Then it will become even harder to trade properly and make money.

I turn on my PC about 20min to half an hour before the daily candlestick close or a while after that. You know that on most platforms the daily candlesticks are closed at 5pm EST. I spend about min to check the daily charts of 19 currency pairs and gold.

As I only look for the strong signals and I ignore the weak ones, I finish my daily job very fast. If I locate any trade setups, I take the position, set the stop loss and target sometimes I set pending orders of course.

My daily Forex trading job is done within min, and sometimes even sooner. This is what I do on the weekends to check the last weekly and daily candlesticks. I check the monthly time frame as well when the new monthly candlestick opens. EURUSD, GBPUSD, USDCHF, USDJPY, GBPJPY, EURJPY, USDCAD, AUDUSD, NZDUSD, EURGBP, GBPAUD, GBPCAD, GBPCHF, EURAUD, EURCAD, CHFJPY, AUDJPY, CADJPY, AUDCAD, Gold.

I ignore the other pairs, because many of them move similar to one or a few of the above pairs, and many of them are not reliable. It will not make more money for you. Some people think that Forex is like the other businesses: If you want to make more money, you have to work harder and more. But this is not true about Forex and online trading.

It can even cause you to lose more. When you are experienced, knowledgeable and wise enough to pick the strongest signals from the daily charts, why should you spend more time at the computer? I think I will forget about the daily time frame and will only trade the weekly and monthly time frames when I get older. But I will never think about using the shorter time frames, even 4hrs. Forex trading is for making money. It is an investment opportunity.

We turn you into a qualified market analyst while we set up our system to generate a strong and reliable source of income for you. Thus, you can 1 make money as a trader and through trading the markets, while 2 you can also make money as a market analyst who gets paid by those who would like to become traders and market analysts too. Our system enables you to make money through the market analysis skills that you will develop when you join us.

It means you can make money as a market analyst and technical analysis mentor, all while you make money through trading currencies, stocks and cryptocurrencies for yourself. Additionally, you can make money through the other opportunities that our system provides.

I don't believe in luck. I believe in sweat. The more you sweat, the luckier you get. great article , how do you deal if you are unable to enter a trade at the opening of your trigger daily candle, thx.

Thanks for your valuable article, So far, I am not good at reading 2 types of daily candles that form a strong setup. Where can I get such a course or training? Thank you too. There are several articles about candlesticks on our site. Hi, What is the maximum raisonable stop loss for a daily trade?

Skip to content Most traders think they should refer to the daily time frame only when they are swing traders they hold their positions for more than a day. This Is How I Trade the Daily Time Frame: Every day when the daily candlestick is closed and the new one is opened, I refer to the daily chart and check the candlesticks. Before you read the rest of this article, submit your email, not to miss the messages that nobody can afford to miss:.

By The LuckScout Team I don't believe in luck. View all of The LuckScout Team 's posts. Notify of. new follow-up comments new replies to my comments. Newest Oldest Most Voted. Inline Feedbacks. The LuckScout Team. Reply to AV 1 year ago. But did you know that trading on the daily chart will allow you to execute higher profitable trades which often leads to consistent profits?

Not only that but also the daily chart helps us to improve areas such as trading psychology, trading discipline and patience. Read this article about How trading Daily Chart Can Help You Improve Your Trading. on that article, we listed 9 ways trading daily chart help us to become better forex traders. Today in this article we are going to talk about 3 profitable daily time frame forex trading strategies. This is true as long as the trend keeps going up or down. But the trend is not going forever, at some point it has to reverse and this is where lots of trend traders got caught up.

The point here is, You need to have a set of rule to both identifying on-going trends and trend reversals to trade while minimizing the trading losses. We use Period EMA to find trend direction — If price trading above the Period EMA, It is a general uptrend and If price trading below the Period EMA, It is a general downtrend.

We use Period EMA and 9-Period EMA to find dynamic support and resistance — During an uptrend, the area between Period EMA and 9-Period EMA work as dynamic support and during a downtrend, the area between two moving average work as a dynamic resistance. We are going to use price actions as our entry trigger and we are going to talk about how to place stop-loss and take profits correctly. Price is making lower lows, moving averages are pointing down and above all, the price is bouncing off from dynamic resistance level twice Have a look at the blue box marked in the chart.

Above factors confirm that we have a healthy downtrend. Now we have to look for a way to go short. But how? We have to wait for a pullback to dynamic resistance, this is where we have an edge in the downtrend, right? Now have a look at the chart above. Where is the price right now?

At the dynamic resistance, right? This is exactly what we need. Our next job is to place the trade, for that we need a confirmation to go short.

We can use price action for this matter. Have you noticed any price action pattern here? If you can spot a bearish engulfing pattern, great. This is our entry trigger. Now all confluences are aligned nicely, Now it is a matter of placing the trade. We can place a sell order here. But where we place stops and targets. According to the above chart, we placed stop-loss a few pips above the lower high, And we used 2R for the target which means our take-profit is twice as the stop-loss.

Beside the stop-loss and take profit, we have to manage the trade, right? This is simple. Learn more on How to Cut Losses in Forex. Have a look at the two examples that we executed in the last month before move into the next trading strategy. Support and resistance are one of the highly rated and most profitable trading tools when it comes to anticipating market movements.

Almost every trading strategies out there use some sort of support and resistance. Another fact about support and resistance is that they tend to works better on higher time frames especially in the daily chart. Which mean price has to be test support or resistance in the near past. Have look at the 4-Hour gold chart below. According to the above chart, you can see that there is a level comes from the daily chart which acts as a resistance in past.

But on the 4-hour we can see that price again bounce from that daily resistance level and this confirms this resistance is valid and can look for trades in future. Just like that before looking for any trades we have to confirm the validity of the support and resistance. So what are the confirmations that we can use to find the price movement around support or resistance? Have a look at the marked bullish engulfing candlestick pattern in the above chart. Why this candle is important for us?

There are two reasons, one is Bullish engulfing pattern indicate buying pressure and the second one is it occurred at daily support level which is a higher probability area to look for trade opportunities. With all these confluences in mind, we place stop-loss few pips below the bullish engulfing pattern and we use 2R for the take profit. Just like that, you can also use the pin bar as your entry technique.

Have a look at the chart below,. Read our Ultimate Guide to the RSI indicator to learn more about the RSI Indicator. Before that keep in mind RSI over-bought and over-sold is not trading signals, But if you can combining RSI over-bought and over-sold with price actions, then you can have a small edge over the market.

Have a look at the chart below, first, you can see that price fell after the RSI overbought signal and the same thing happened again after the RSI over-sold signal — price move higher.

Most traders think they should refer to the daily time frame only when they are swing traders they hold their positions for more than a day. This is not true.

Daily candlestick shows us the direction of the market AT LEAST for the next trading day and this is very important for the day traders, also known as intraday traders. Unlike what most traders think, daily time frame is not a long time frame. They think it is a long time frame because they are used to trade the very short time frames like 15min.

Making some profit every now and then which is what day traders who trade the shorter time frames do, is very different from being a consistently professional trader. Every day when the daily candlestick is closed and the new one is opened, I refer to the daily chart and check the candlesticks. Sometimes I can find a strong trade setup that shows the direction of the market during the next day. I take my position set a pending order sometimes , set the stop loss and target and I come back the next day.

I do not spend more than 30 minutes a day to analyze the market. I check the daily time frame of 19 currency pairs, and usually I am lucky enough to locate some good signals trade setups every week, which is more than enough.

Reading the candlestick signals needs some good knowledge and experience, but if you are not that experienced and knowledgeable yet, you can simplify the work and only focus on some special signals that are the strongest. This is what I do too. I look for the strongest signals and ignore the rest.

That is why my success rate is good. Thus, you can be a day trader, but unlike the other day traders who spend several hours in front of the computer every day looking at the 5min or 15min charts, you can spend only 30 minutes on your day trading journey.

I do the same when the weekly and monthly candlesticks close and the new ones open. This helps me locate the trade setups on the weekly and monthly time frames too. Candlestick and Bollinger Bands are all you need to have on your charts. And sometimes a strong candlestick signal on the daily chart indicates that the market will be bullish or bearish at least for the next a few or few days.

My target order is usually limited to the next day movement. This is my style. I know some traders disagree with me, but this method has been working for me for such a long time. For example, on the below chart, the candlestick 2 tells me that most probably the market will be bearish during the next day too. The market had been bearish for several consecutive days and a downtrend is formed.

Although candlestick 1 has a bullish body, its upper shadow tells me that bears took the control at the end of the day. Therefore, if the market forms a bearish candlestick the next day candlestick 2 , then it confirms that bears will have the control and the downtrend will be continued, or at least the market will be bearish for the next day.

After that, when I see the candlestick 1 and then 2 formed on the chart, I set a sell pending order a few pips below the low price of candlestick 2.

The stop loss will be around the candlestick 2 open price and the target will be the same as the stop loss size. That is all. So my target will be limited to next day movement and nothing more than that. Here is another example on the same screenshot below. Candlestick 1 tests the the Bollinger Middle Band on a bear market.

Its upper shadow tells me that bears are still strong and will not allow bulls to take the control. However, I have to wait the for the next day candlestick to form. If the next candlestick forms with a bearish body, it means I was right and bears still have the control and most probably the next day candlestick will also be bearish. As you see, the next day candlestick 2 closes with a strong bearish body. I set a sell pending order a few pips below the low price of the candlestick 2.

The stop loss will be at the middle of the candlestick 2 body because it is a big candlestick with a big body and the target will be the same as the stop loss size. As you see, although bulls resist for several days, but it finally goes down and hits the target. Please look at the the below screenshot. Candlestick 1 and 2 have formed a strong signal that tells me that the market will be bearish at least for the next a few days. The reason is that candlestick 1 Bollinger Band breakout is strong, and then it is strongly confirmed by candlestick 2.

After such a strong breakout that candlestick 1 formed, candlestick 2 with its strong bearish body tells me that bears will take the price down. So, I set a sell pending order below the low price of candlestick 2.

The stop loss will be at the middle of candlestick 2 body because it is a relatively big bearish candlestick , and the target will be x3 of the stop loss size a 30 pips stop loss and 90 pips target.

Candlestick 3 has broken out of the Bollinger Lower Band strongly too, but candlestick 4 is not as strong as I want. So I ignore the signal that candlestick 3 and 4 form. However, candlestick 5 is too strong to be ignored its Bollinger Lower Band breakout, its size and its bullish body. So I go long. The stop loss will be around the candlestick 5 open price and the target will be x3 of the stop loss. While the market is still bullish, candlestick 6 forms a strong breakout.

However, it has to be ignored for two reasons:. First, the signal that candlestick 5 has formed was TOO strong and it could still move the price up. Second, candlestick 6 has to be confirmed by the next candlestick. Novice traders always ask what time frame is the best to trade.

Most platforms support different time frames from 1min to monthly. Even some of them support exotic time frames like 10min or 2hrs. My goal is to convince you to stop using the short time frames like 1min, 5min, and even 15min and 1hr, because it will result in nothing but loss. It takes 24 hours for each of the candlesticks to form.

Therefore, each candlestick is the representative of the past 24 hours movements and events. This is a big advantage because the movements and events of the past 24 hours can have a strong impact on the movements of the next 24 hours at least. And this is a good opportunity to take positions and make some money.

Similarly, a 5min candlestick is the representative of the past 5min movements. And nobody knows what will happen during the next 5min. The patterns, support and resistance lines and levels are less reliable on the shorter time frames. Therefore, your stop loss will be triggered easier and your success rate will be lower.

With the short time frames, you have to deal with more noise and false movements. Few years ago, even one hour time frame was strong and reliable enough to trade, but now it is not reliable anymore, because Forex market has changed a lot and the volume of the transactions is increased dramatically. When 1hr is not reliable, what do you expect from 5min and 15min charts?

When I trade the daily chart, I do not have to sit at the computer several hours per day. Day traders have to sit at the computer and gaze at the price charts several hours every day. They get tired and frustrated, especially when they cannot locate any trade setup, or when they lose in a trade after several hours of monitoring the charts. Sitting at the computer for several hours per day can cause physical problems too. After a while you will experience neck, shoulders and back pains.

It affects your vision, and it is possible you experience headaches too. Then it will become even harder to trade properly and make money. I turn on my PC about 20min to half an hour before the daily candlestick close or a while after that. You know that on most platforms the daily candlesticks are closed at 5pm EST.

I spend about min to check the daily charts of 19 currency pairs and gold. As I only look for the strong signals and I ignore the weak ones, I finish my daily job very fast. If I locate any trade setups, I take the position, set the stop loss and target sometimes I set pending orders of course.

My daily Forex trading job is done within min, and sometimes even sooner. This is what I do on the weekends to check the last weekly and daily candlesticks. I check the monthly time frame as well when the new monthly candlestick opens. EURUSD, GBPUSD, USDCHF, USDJPY, GBPJPY, EURJPY, USDCAD, AUDUSD, NZDUSD, EURGBP, GBPAUD, GBPCAD, GBPCHF, EURAUD, EURCAD, CHFJPY, AUDJPY, CADJPY, AUDCAD, Gold.

I ignore the other pairs, because many of them move similar to one or a few of the above pairs, and many of them are not reliable. It will not make more money for you. Some people think that Forex is like the other businesses: If you want to make more money, you have to work harder and more. But this is not true about Forex and online trading. It can even cause you to lose more. When you are experienced, knowledgeable and wise enough to pick the strongest signals from the daily charts, why should you spend more time at the computer?

I think I will forget about the daily time frame and will only trade the weekly and monthly time frames when I get older. But I will never think about using the shorter time frames, even 4hrs. Forex trading is for making money. It is an investment opportunity.

We turn you into a qualified market analyst while we set up our system to generate a strong and reliable source of income for you. Thus, you can 1 make money as a trader and through trading the markets, while 2 you can also make money as a market analyst who gets paid by those who would like to become traders and market analysts too.

Our system enables you to make money through the market analysis skills that you will develop when you join us.

How to effectively Trade Daily Timeframe in Forex,RULES OF THE DAILY CHART FOREX TRADING STRATEGY

Also, price actions in daily timeframe have more value than lower timeframes. This is because a Daily candle reflect whole trading activities in a given day or in another word a daily candle 16/11/ · Daily Forex Strategy. Trading forex on the daily charts has many advantages. It requires less time analysing charts and filters out a lot of market noise when compared to 29/7/ · BACKGROUND OF TRADING OFF THE MT4 DAILY CHART FOREX TRADING STRATEGY. We all know that a forex market will trend and consolidate. It will do the same 22/10/ · This is not true. Daily candlestick shows us the direction of the market AT LEAST for the next trading day and this is very important for the day traders, also known as intraday In this guide, you’ll learn 3 ways to trade on the daily chart. Mainly we focus on daily time frame forex trading strategy. Here is the truth, Most forex traders don’t even like to talk about the ... read more

Trade Article Trade Ideas. But… There is another group of trader, who trades in the daily timeframes with their busy lifestyles. This serves as his trade entry timeframe. Aside from the obvious financial benefits of trading the daily timeframe, the psychological benefits should not be under estimated. High trading frequency is the main factor that lots of traders, especially new traders shift their trading activities to the lower timeframes.

This is simple. This is valuable information that will help you stay on the right side of the market. By The LuckScout Team I don't believe in luck. These cookies will be stored in your browser only with your consent. Mainly we focus on daily time frame forex trading strategy.

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