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Trading in the [[Forex]] market can be a complicated and difficult task if you don't know where to start or what type of information to consume. There is an enormous amount of information available on the internet and even more people that want you to spend your hard-earned money on their courses, systems, signals, algos or any other number of trading related schemes. What we have done in this Wiki is break down the essential skills and information you will need to build a solid foundation as a [[Forex]] trader. | [[Trading]] in the [[Forex]] market can be a complicated and difficult task if you don't know where to start or what type of information to consume. There is an enormous amount of information available on the internet and even more people that want you to spend your hard-earned money on their courses, [[Technical Trading Strategies | systems]], [[Signals | signals]], [[Algorithmic Trading | algos]] or any other number of [[trading]] related schemes. What we have done in this Wiki is break down the essential skills and information you will need to build a solid foundation as a [[Forex]] [[Trader Types | trader]]. | ||
We have gone to great lengths to put this information together | We have gone to great lengths to put this information together which was developed and written by actual full-time [[Forex]] [[Trader Types | traders]] with decades of experience. It is our hope that, with this information, we can bridge the gap between the big banks and [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail traders]] to help put more money in the pockets of [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail Forex traders]] and less in the coffers of the big banks. | ||
In this Wiki, we will look at the '''6 Essential Elements of Professional Forex Trading''', why they are so important to your success, and how to approach learning them. We will also dive into [[Developing your Trading Process | developing your trading processes]] using [[Trading Tools | tools]] and [[Trading Routine | routines]]. And finally, we will finish this extensive guide with [[Fundamental and Sentiment Trading Strategies | trading strategies]] and [[Trading Rules to Live By | rules to live by]] that have actually been shown to generate profits in the [[Forex]] market by real [[Trader Types | traders]]. | |||
Just a reminder: This Wiki is intended for educational purposes only and is not intended as financial advice. Consult your financial advisor should you have questions about your finances. | Just a reminder: This Wiki is intended for educational purposes only and is not intended as financial advice. Consult your financial advisor should you have questions about your finances. | ||
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='''The 6 Essential Elements of Forex Trading'''= | ='''The 6 Essential Elements of Forex Trading'''= | ||
In this Wiki, we will look at the 6 essential elements of professional [[Forex]] trading, why they are so important to your success, and how you should approach learning them. Understanding these 6 key elements will help form the structure of your learning and understanding of how the Forex market works and why price moves the way they do. Trading is a business just like any other with many moving parts and lots of things you need to know. We have done our best and are constantly updating this Wiki and the other Wikis it links to in order to give you the best information available to help you make more pips. | In this Wiki, we will look at the 6 essential elements of [[Institutional_and_Retail_Traders#What_is_an_Institutional_Trader? | professional]] [[Forex]] [[trading]], why they are so important to your success, and how you should approach learning them. Understanding these 6 key elements will help form the structure of your learning and understanding of how the Forex market works and why price moves the way they do. [[Trading]] is a business just like any other with many moving parts and lots of things you need to know. We have done our best and are constantly updating this Wiki and the other Wikis it links to in order to give you the best information available to help you make more [[Futures_Market#Ticks_and_Pips | pips]]. | ||
The 6 Essential Elements of Forex Trading are: | The 6 Essential Elements of Forex Trading are: | ||
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You can click on any of those links above now to take you to the Wikis on those subjects or you can keep reading the brief descriptions below for a bit more information. | You can click on any of those links above now to take you to the Wikis on those subjects or you can keep reading the brief descriptions below for a bit more information. | ||
After you have a solid understanding of these 6 concepts the next thing you need to do is define your trading strategies based on what makes the most sense to you and your situation. | After you have a solid understanding of these 6 concepts the next thing you need to do is define your [[Fundamental and Sentiment Trading Strategies | trading strategies]] based on what makes the most sense to you and your situation. | ||
This Wiki is an aggregate of several other Wikis. At any time you can click on the links to the other Wikis where you will be brought to the main Wiki for that subject. In those Wikis, you will find great amounts of information that are designed to help you understand each subject like a professional. There is a heavy emphasis on trading in line with the larger players in the market that are the ones that are responsible for moving the [[Forex]] market. | This Wiki is an aggregate of several other Wikis. At any time you can click on the links to the other Wikis where you will be brought to the main Wiki for that subject. In those Wikis, you will find great amounts of information that are designed to help you understand each subject like a [[Institutional_and_Retail_Traders#What_is_an_Institutional_Trader? | professional]]. There is a heavy emphasis on [[trading]] in line with the larger players in the market that are the ones that are responsible for moving the [[Forex]] market. | ||
=='''[[Fundamental Analysis]]'''== | =='''[[Fundamental Analysis]]'''== | ||
[[Fundamental Analysis]] is simply the process of identifying and understanding the "factual reasons" why the market is moving in the direction that it is currently moving within the overall trend over the long term. This is in contrast to identifying that a trend or price move has already happened which is the job of [[Technical Analysis]]. [[Technical Analysis]] is backward-looking at past prices while [[Fundamental Analysis]] is forward-looking and allows you to use current information to try and predict where prices might go in the near future. | [[Fundamental Analysis]] is simply the [[Developing your Trading Process | process]] of identifying and understanding the "factual reasons" why the market is moving in the direction that it is currently moving within the overall [[Trends | trend]] over the long term. This is in contrast to identifying that a [[Trends | trend]] or [[Price Action Analysis | price move]] has already happened which is the job of [[Technical Analysis]]. [[Technical Analysis]] is backward-looking at past [[Price Action Analysis | prices]] while [[Fundamental Analysis]] is forward-looking and allows you to use current information to try and predict where [[Price Action Analysis | prices]] might go in the near [[Futures Market | future]]. | ||
[[Fundamental Analysis]] is an extremely underserved subject when it comes to retail traders and how they obtain their trading knowledge. Whereas [[Technical Analysis]] uses ''past prices'' and indicators based on ''past prices'', [[Fundamental Analysis]] uses ''past market information'' to try and predict the future direction of prices. This ''past market information'' is what the big banks and hedge funds use to make their trading decisions and these are the people that have the money to move prices so it makes sense for us retail traders to understand how they are looking at the markets. | [[Fundamental Analysis]] is an extremely underserved subject when it comes to [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail traders]] and how they obtain their [[trading]] knowledge. Whereas [[Technical Analysis]] uses ''[[Price Action Analysis | past prices]]'' and indicators based on ''[[Price Action Analysis | past prices]]'', [[Fundamental Analysis]] uses ''past market information'' to try and predict the [[Futures Market | future]] direction of [[Price Action Analysis | prices]]. This ''past market information'' is what the big banks and hedge funds use to make their [[Pre-Trade Considerations | trading decisions]] and these are the people that have the money to move [[Price Action Analysis | prices]] so it makes sense for us [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail traders]] to understand how they are looking at the markets. | ||
In this Wiki, we will explore all the various aspects of [[Fundamental Analysis]] including: | In this Wiki, we will explore all the various aspects of [[Fundamental Analysis]] including: | ||
* [ | * [[Fundamental_Analysis#Introduction | What Fundamental Analysis is]] | ||
* [ | * [[Fundamental_Analysis#Objections_to_Fundamental_Analysis | Objection to Fundamentals]] | ||
* [ | * [[Fundamental_Analysis#Institutional_and_Retail_Traders | The differences between institutional and retail traders]] | ||
* [ | * [[Fundamental_Analysis#Sentiment_Analysis | Sentiment Analysis]] | ||
* [ | * [[Fundamental_Analysis#Central_Banks | Central Banks]] | ||
* [ | * [[Fundamental_Analysis#Economic_Data_Releases | Economic Data Releases]] | ||
* [ | * [[Fundamental_Analysis#Fundamental_Supply_and_Demand | Fundamental Supply and Demand]] | ||
* [ | * [[Fundamental_Analysis#Intermaket_Analysis | Intermarket Analysis]] | ||
* [ | * [[Fundamental_Analysis#Economic_Cycles | Economic Cycles]] | ||
* And so much more... | * And so much more... | ||
You can access the main Wiki for [[Fundamental Analysis]] [ | You can access the main Wiki for [[Fundamental Analysis]] [[Fundamental_Analysis | HERE]]. | ||
=='''[[Sentiment Analysis]]'''== | =='''[[Sentiment Analysis]]'''== | ||
[ | [[Sentiment_Analysis | Sentiment]] can be best explained by describing it as the Mood of the market right now in the current [[Forex Trading Sessions | trading session]]. Just like the moods of individuals sentiment can change quickly and for a variety of reasons. This Mood can last seconds, minutes, hours, days and even weeks but is often thought of as shorter in duration than something like the fundamental [[Trends | trend]] that can be determined using [[Fundamental Analysis]]. | ||
In this Wiki, we will explore what sentiment is and the various forms and behaviours that sentiment can manifest itself in Forex and other financial markets including: | In this Wiki, we will explore what sentiment is and the various forms and behaviours that sentiment can manifest itself in Forex and other financial markets including: | ||
* [ | * [[Sentiment_Analysis#Risk_On_and_Risk_Off | Risk on Risk Off]] | ||
* [ | * [[Sentiment_Analysis#Safe_Haven_Flows | Safe Haven Flows]] | ||
* [ | * [[Sentiment_Analysis#High_Frequency_Traders | High Frequency Traders]] | ||
* [ | * [[Sentiment_Analysis#Buy_the_Rumour_Sell_the_Fact | Buy the Rumour Sell the Fact]] | ||
* [ | * [[Sentiment_Analysis#Volatility | Volatility]] | ||
* [ | * [[Sentiment_Analysis#Profit_Taking | Profit Taking]] | ||
* [ | * [[Sentiment_Analysis#Stop_Hunting_and_Price_Squeezing | Stop Hunting and Price Squeezing]] | ||
* [ | * [[Sentiment_Analysis#Central_Bank_Policy_Divergence | Central Bank Policy Divergence]] | ||
* And so much more... | * And so much more... | ||
You can access the main Wiki for [[Sentiment Analysis]] [ | You can access the main Wiki for [[Sentiment Analysis]] [[Sentiment_Analysis |HERE]]. | ||
=='''[[Risk Management]]'''== | =='''[[Risk Management]]'''== | ||
[[Risk Management]] happens when a trader takes active steps to minimize the potential of losing more money on a trade than they originally intended. It is a method unique to each individual trader that is meant to preserve capital so that they do not lose too much money. If a trader is lacking sound [[Risk Management]] skills then all the other elements of [[Forex]] trading will fail. Without managing risks professionally the risk of blowing out your account becomes way too high. | [[Risk Management]] happens when a [[Forex]] [[Trader Types | trader]] takes active steps to minimize the potential of losing more money on a [[Trading | trade]] than they originally intended. It is a method unique to each individual [[Forex]] [[Trader Types | trader]] that is meant to preserve capital so that they do not lose too much money. If a [[Forex]] [[Trader Types | trader]] is lacking sound [[Risk Management]] skills then all the other elements of [[Forex]] [[trading]] will fail. Without managing [[Risk | risks]] [[Institutional_and_Retail_Traders#What_is_an_Institutional_Trader? | professionally]] the [[Risk | risk]] of blowing out your account becomes way too high. | ||
[[Risk Management]] takes many forms and in this Wikki we will take a look at several [[Risk Management]] concepts including: | [[Risk Management]] takes many forms and in this Wikki we will take a look at several [[Risk Management]] concepts including: | ||
* [ | * [[Risk_Management#Risk_Management_Plan | Risk Management Plan]] | ||
* [ | * [[Risk_Management#The_Realities_of_having_a_Trading_Business | Having a Trading Business]] | ||
* [ | * [[Risk_Management#4_Risk_Management_Defences | 4 Risk Management Defences]] | ||
* [ | * [[Risk_Management#Developing_your_Trading_Process | Developing your Trading Process]] | ||
* [ | * [[Risk_Management#Defence_#1:_Money_Management | Money Management]] | ||
* [ | * [[Risk_Management#Defence_#2:_Trade_Management | Trade Management]] | ||
* [ | * [[Risk_Management#Stop_Losses | Stop Losses]] | ||
* [ | * [[Risk_Management#Entries_and_Exits | Entries and Exits]] | ||
* [ | * [[Risk_Management#Having_an_Edge_in_your_Trading | Having an Edge in your Trading]] | ||
* And so much more... | * And so much more... | ||
You can access the main Wiki for [[Risk Management]] [ | You can access the main Wiki for [[Risk Management]] [[Risk_Management | HERE]]. | ||
=='''[[Trading psychology]]'''== | =='''[[Trading psychology]]'''== | ||
When someone uses the term "[[Trading psychology]]" they are referring to the emotions and mental state of a trader that may dictate the success or failure they will have when trading in the financial markets. This [[Trading psychology]] is unique to the individual trader. However, in general, it represents various aspects of an individual’s character and behaviours that | When someone uses the term "[[Trading psychology]]" they are referring to the emotions and mental state of a [[Forex]] [[Trader Types | trader]] that may dictate the success or failure they will have when [[trading]] in the financial markets. This [[Trading psychology]] is unique to the individual [[Trader Types | trader]]. However, in general, it represents various aspects of an individual’s character and behaviours that influence their [[Pre-Trade Considerations | trading decisions]] and consequently, the actions they will take in the markets. | ||
[[Trading psychology]] is a vast subject that can take many forms for each individual trader. In this Wiki, we go into great depth on subjects relating to [[Trading psychology]] including: | [[Trading psychology]] is a vast subject that can take many forms for each individual [[Trader Types | trader]]. In this Wiki, we go into great depth on subjects relating to [[Trading psychology]] including: | ||
* [ | * [[Trading_psychology#Emotional_States | Emotional States]] | ||
* [ | * [[Trading_psychology#Potential_and_Performance | Potential and Performance]] | ||
* [ | * [[Trading_psychology#The_4_Stages_of_Competence | The 4 Stages of Competence]] | ||
* [ | * [[Trading_psychology#How_do_you_Create_the_Optimal_State_for_High_Trading_Performance? | How to Create the Optimal State for High Trading Performance]] | ||
* [ | * [[Trading_psychology#4._Managing_the_little_Voice_inside_of_our_Heads | Managing the Voice inside our Heads]] | ||
* [ | * [[Trading_psychology#Conviction_in_your_Trading | How to Have Conviction in your Trading]] | ||
* [ | * [[Trading_psychology#Trader_Psychology_Problems | Trader Psychology Problems]] | ||
* [ | * [[Trading_psychology#Solutions_for_Trading_Psychology_Problems | Solutions to Trader Psychology Problems]] | ||
* [ | * [[Trading_psychology#The_Psychology_of_Money_Management | The Psychology of Money Management]] | ||
* And so much more... | * And so much more... | ||
You can access the main Wiki for [[Trading psychology]] [ | You can access the main Wiki for [[Trading psychology]] [[Trading_psychology | HERE]]. | ||
=='''[[Price Action Analysis]]'''== | =='''[[Price Action Analysis]]'''== | ||
In its most basic form, Price Action Analysis, also referred to in the following Wiki as "Market Mechanics", is a trader's interpretation of the behaviour that price movements display on a price chart, both current and past. [[Price Action Analysis]] helps traders to understand the "Way" in which Sentiment and Fundamental information are displayed on a price chart. | In its most basic form, [[Price Action Analysis]], also referred to in the following Wiki as "Market Mechanics", is a [[Trader Types | trader's]] interpretation of the behaviour that [[Price Action Analysis | price movements]] display on a [[Trading_Tools#Charting_Software | price chart]], both current and past. [[Price Action Analysis]] helps [[Trader Types | traders]] to understand the "Way" in which Sentiment and Fundamental information are displayed on a [[Trading_Tools#Charting_Software | price chart]]. | ||
In this Wiki, we will explore several areas of [[Price Action Analysis]] including: | In this Wiki, we will explore several areas of [[Price Action Analysis]] including: | ||
* [ | * [[Price_Action_Analysis#Market_Mechanics_Basics | The Basic Cycle]] | ||
* [ | * [[Price_Action_Analysis#The_4_Stages_of_The_Basic_Cycle | The 4 Stages of the Basic Cycle]] | ||
* [ | * [[Price_Action_Analysis#The_Only_Way_to_Profits_or_Losses | The Only Way to Profits or Losses]] | ||
* [ | * [[Price_Action_Analysis#Trends | Trends]] | ||
* [ | * [[Price_Action_Analysis#Stage_to_Stage_Transitions,_Breakouts_and_Breakdowns | Breakouts and Breakdowns]] | ||
* [ | * [[Price_Action_Analysis#Macro_Trend_Analysis | Macro Trend Analysis]] | ||
* [ | * [[Price_Action_Analysis#Retracements | Retracements]] | ||
* [ | * [[Price_Action_Analysis#Trend_Lines | Trend Lines]] | ||
* [ | * [[Price_Action_Analysis#The_7_Market_Movements | The 7 Market Movements]] | ||
* [ | * [[Price_Action_Analysis#Pivot_Point_Analysis | Pivot Point Analysis]] | ||
* And so much more... | * And so much more... | ||
You can access the main Wiki for [[Price Action Analysis]] [ | You can access the main Wiki for [[Price Action Analysis]] [[Price_Action_Analysis | HERE]]. | ||
=='''[[Technical Analysis]]'''== | =='''[[Technical Analysis]]'''== | ||
[[Technical Analysis]] is a method of analyzing a price chart in an attempt to predict where the price of a financial asset will go in the future using past charting data and other technical indicators. [[Technical Analysis]] is a trading discipline employed by some traders, mainly retail traders, to evaluate and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. It typically involves using indicators and oscillators that have gained popularity as trading in financial assets has increased in popularity among retail traders over the years. | [[Technical Analysis]] is a method of analyzing a [[Trading_Tools#Charting_Software | price chart]] in an attempt to predict where the [[Price Action Analysis | price]] of a financial asset will go in the [[Futures Market | future]] using past [[Trading_Tools#Charting_Software | charting data]] and other technical indicators. [[Technical Analysis]] is a [[trading]] discipline employed by some [[Trader Types | traders]], mainly [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail traders]], to evaluate and identify [[Fundamental and Sentiment Trading Strategies | trading opportunities]] by analyzing statistical [[Trends | trends]] gathered from [[trading]] activity, such as [[Price Action Analysis | price movement]] and volume. It typically involves using indicators and oscillators that have gained popularity as [[trading]] in financial assets has increased in popularity among [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail traders]] over the years. | ||
In this Wiki, we will examine many areas [[Technical Analysis]] and draw many comparisons to how a professional institutional trader would approach technical analysis versus how a typical retail trader would. We will explore such subjects including: | In this Wiki, we will examine many areas [[Technical Analysis]] and draw many comparisons to how a professional [[Institutional_and_Retail_Traders#What_is_an_Institutional_Trader? | institutional trader]] would approach technical analysis versus how a typical [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail trader]] would. We will explore such subjects including: | ||
* [ | * [[Technical_Analysis#What_is_Technical_Analysis? | What Technical Analysis is]] | ||
* [ | * [[Technical_Analysis#Japanese_Candlesticks | Japanese Candlesticks]] | ||
* [ | * [[Technical_Analysis#Previously_Traded_Price_Areas | Previously Trade Price Areas]] | ||
* [ | * [[Technical_Analysis#Price_Based_Support_and_Resistance | Price Based Support and Resistance]] | ||
* [ | * [[Technical_Analysis#Average_Daily_Range | Average Daily Range]] | ||
* [ | * [[Technical_Analysis#Moving_Averages | Moving Averages]] | ||
* [ | * [[Technical_Analysis#Fibonacci | Fibonacci]] | ||
* [ | * [[Technical_Analysis#Fractals | Fractals]] | ||
* [ | * [[Technical_Analysis#Market_Flow | Market Flow]] | ||
* [ | * [[Technical_Analysis#Trader_Mistakes_with_Technical_Analysis | Trader Mistakes with Technical Analysis]] | ||
* And so much more... | * And so much more... | ||
You can access the main Wiki for [[Technical Analysis]] [ | You can access the main Wiki for [[Technical Analysis]] [[Technical_Analysis | HERE]]. | ||
='''[[Developing your Trading Process]]'''= | |||
Your [[Developing your Trading Process | trading process]] will be unique to you. However, there are some common these that are universal to all successful [[Trader Types | traders]]. In the following Wiki, we will explore the [[Trading Tools]] and [[Trading_Routine | Trading Routines]] that you will need in order to [[Trading | trade]] effectively in the markets. | |||
You can access the main Wiki on [[Developing your Trading Process]] [[Developing_your_Trading_Process | HERE]]. | |||
=='''[[Trader Types]]'''== | =='''[[Trader Types]]'''== | ||
All [[Trader Types | traders]] are not created equal. [[Trader Types | Traders]] are people and people have lives. Not everyone that comes to the business of [[trading]] will have the same amount of time they can commit to learning the [[Developing your Trading Process | process of trading]]. Equally, not everyone will have the same amount of time to commit to actually deploying what they have learned in the financial markets. It is for these reasons that there are three different [[Trader_Types | types of traders]] that are the most common in the financial markets. Of these [[Forex]] [[Trader Types | trader types]], the main thing that differentiates them is the amount of time that is spent in a trade. | |||
In this Wiki, we will take a look at [[Trader_Types | The 3 Main Trader Types]] including: | |||
* [[Trader_Types#Position_Traders | Position Trading]] | |||
* [[Trader_Types#Day_Traders | Day Trading]] | |||
* [[Trader_Types#Scalpers | Scalping]] | |||
You can access the main Wiki on [[Trader Types]] [[Trader_Types | HERE]]. | |||
=='''[[Forex Market Hours]]'''== | |||
[[Trading]] in [[Forex]] is not just as simple as working a 9 to 5 job. There are differences in timing that you need to be aware of because of things like daylight savings time. | |||
In the following Wiki, we dive into [[Forex Market Hours]] and the various differences that we have at certain times of the year in the Easter Time Zone (EST) vs. Greenwich Mean Time (GMT) including: | |||
* [[Forex_Market_Hours#Summer_Trading_Hours | Summer Trading Hours]] | |||
* [[Forex_Market_Hours#Winter_Trading_Hours | Winter Trading Hours]] | |||
* [[Forex_Market_Hours#Daylight_Savings_Time | Daylight Savings Time]] | |||
* [[Forex_Market_Hours#Overlapping_Sessions | Overlapping Sessions]] | |||
You can access the main Wiki for [[Forex Market Hours]] [[Forex_Market_Hours | HERE]]. | |||
=='''[[Forex Trading Sessions]]'''== | |||
[[Trading]] in [[Forex]] is a 24-hour 5 days per week business. However, not all times in the 24-hour [Forex_Trading_Sessions trading day]] are created equal. In fact, there are several different personalities to the [[Forex]] market that happen throughout the day. These personalities are typically separated by [[Forex Trading Sessions | trading sessions]] that correspond to active stock markets during that time. | |||
In this Wiki, we will explore and gain an understanding of the various characteristics that make up the personalities of the: | |||
* [[Forex_Trading_Sessions#Asia_Pacific_Session | Asia Pacific Session]] | |||
* [[Forex_Trading_Sessions#The_London_Session | The London Session]] | |||
* [[Forex_Trading_Sessions#The_New_York_Session | The New York session]] | |||
You can access the main Wiki for [[Forex Trading Sessions]] [[Forex_Trading_Sessions | HERE]] | |||
==''' | =='''[[Best and Worst Times to Trade]]'''== | ||
In general, not all times of the day are created equal in terms of potentially finding profitable trades that will have enough volatility to move to your [[Trading | trade]] targets. In the same light, not all times of the week will present the same type of [[trading]] environment conducive to profitable [[trading]]. In this Wiki, we will explore: | |||
* [[Best_and_Worst_Times_to_Trade#Best_Times_of_the_Day_to_Trade | The best times of the day to trade]] | |||
* [[Best_and_Worst_Times_to_Trade#Best_Days_of_the_Week_to_Trade | The best days of the week to trade]] | |||
* [[Best_and_Worst_Times_to_Trade#Worst_Days_of_the_Week_to_Trade | The worst days of the week to trade]] | |||
* [[Best_and_Worst_Times_to_Trade#Best_Day_Trade_Timing_Blueprint | The best day trade timing blueprint]] | |||
You can access the main Wiki for [[Best and Worst Times to Trade]] [[Best_and_Worst_Times_to_Trade | HERE]] | |||
='''Trading | ='''Trading Methods'''= | ||
=='''[[Pre-Trade Considerations]]'''== | |||
Before placing a trade you should have a very good reason for putting your money to work in that particular trade. In the following Wiki, we will explore concepts that you should have already considered prior to getting into a trade such as: | |||
* [[Pre-Trade_Considerations#Pre-Trade_Considerations | Understanding economic indicators and the market expectations of those indicators]] | |||
* [[Pre-Trade_Considerations#Strategy_Overview | Framing a strategy in the context of the current market sentiment]] | |||
* [[Pre-Trade_Considerations#Basic_Strategy_Rules | Basic strategy rules that you should have prior to getting into a trade]] | |||
You can access the main Wiki for [[Pre-Trade Considerations]] [[Pre-Trade_Considerations | HERE]] | |||
=='''[[Fundamental and Sentiment Trading Strategies]]'''== | |||
Utilizing [[Fundamental_Analysis | Fundamental]] and [[Sentiment_Analysis | Sentiment]] based [[Fundamental and Sentiment Trading Strategies | trading strategies]] in the [[Forex]] market is not typically how [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail traders]] start out their [[trading]] career. However, many [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail traders]] who do discover these types of [[Fundamental and Sentiment Trading Strategies | strategies]] will tell you that this is when they had their ''"Breakthrough"'' from being an ''"inconsistent breakeven [[Trader Types | trader]]"'' to becoming a ''"consistently profitable [[Trader Types | trader]]."'' We developed this Wiki with the hope that more of our fellow [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail traders]] will have their ''"Breakthrough"''. | |||
In this Wiki, we will explore [[Fundamental and Sentiment Trading Strategies]] including: | |||
* [[Fundamental_and_Sentiment_Trading_Strategies#How_to_Trade_Risk_Events | How to Trade Risk Events]] | |||
* [[Fundamental_and_Sentiment_Trading_Strategies#How_to_Trade_with_Central_Banks | How to Trade with Central Banks]] | |||
* [[Fundamental_and_Sentiment_Trading_Strategies#How_to_Trade_Upcoming_Economic_Figures | How to Trade Upcoming Economic Figures]] | |||
* [[Fundamental_and_Sentiment_Trading_Strategies#How_to_Trade_the_Previous_Session | How to Trade the Previous Session]] | |||
* [[Fundamental_and_Sentiment_Trading_Strategies#Trading_Surprise_Data_and_News | Trading Surprise Data and News]] | |||
* [[Fundamental_and_Sentiment_Trading_Strategies#Trading_with_the_News_Feed | Trading with the News Feed]] | |||
* [[Fundamental_and_Sentiment_Trading_Strategies#Trading_Fundamental_Pullbacks | Trading Fundamental Pullbacks]] | |||
* [[Fundamental_and_Sentiment_Trading_Strategies#Positioning_Yourself_with_Medium_Term_Sentiment | Positioning Yourself with Medium Term Sentiment]] | |||
* [[Fundamental_and_Sentiment_Trading_Strategies#Carry_Trading | Carry Trading]] | |||
* And so much more... | |||
You can access the main Wiki for [[Fundamental and Sentiment Trading Strategies]] [[Fundamental_and_Sentiment_Trading_Strategies | HERE]] | |||
=='''[[Technical Trading Strategies]]'''== | |||
[[Technical Trading Strategies]] typically forms the initial basis for [[Pre-Trade_Considerations | trading decisions]] by [[Institutional_and_Retail_Traders#What_is_a_Retail_Trader? | retail traders]] when they enter the [[Forex]] market for the first time. Understanding [[Technical Trading Strategies]] is a good place to learn how to [[Developing_your_Trading_Process | enter and exit trades]]. However, [[Technical Trading Strategies]] are best used as a ''Timing [[Trading Tools | Tool]]'' with the prevailing [[Fundamental_Analysis | Fundamental]] and/or [[Sentiment_Analysis | Sentiment trend]]. | |||
In this Wiki we will explore [[Technical Trading Strategies]] including: | |||
* [[Technical_Trading_Strategies#The_3-5_Candle_Drop | The 3-5 Candle Drop and Pop]] | |||
* [[Technical_Trading_Strategies#The_Breakout | The Breakout and the Breakdown]] | |||
* [[Technical_Trading_Strategies#Bullish_Momentum_Stall | Bullish and Bearish Momentum Stall]] | |||
* [[Technical_Trading_Strategies#Matched_Move_Higher | Matched Move Higher and Lower]] | |||
* [[Technical_Trading_Strategies#Climactic_Buy | Climactic Buys and Sells]] | |||
* [[Technical_Trading_Strategies#The_3-5_Candle_Drop_Moving_Average_Play | The 3-5 Candle Drop and Pop Moving Average Play]] | |||
* [[Technical_Trading_Strategies#Moving_Average_Buy_Zone | Moving Average Buy and Sell Zone]] | |||
* [[Technical_Trading_Strategies#Major_Support_Buy_Zone | Major Support Buy and Resistance Sell Zones]] | |||
* [[Technical_Trading_Strategies#When_to_Trade_Technical_Strategies | When to Trade Technical Strategies]] | |||
* [[Technical_Trading_Strategies#Trading_Strategies_and_the_Stages_of_the_Basic_Cycle | Trading Strategies and the Stages of the Basic Cycle]] | |||
* [[Technical_Trading_Strategies#Strategies_and_the_Basic_Cycle | Strategies Combined with the Basic Cycle]] | |||
* [[Technical_Trading_Strategies#Intermediate_Technical_Trading_Strategies | Intermediate Technical Trading Strategies]] | |||
* [[Technical_Trading_Strategies#Chart_Patterns | Chart Patterns]] | |||
And so much more... | |||
You can access the main Wiki for [[Technical Trading Strategies]] [[Technical_Trading_Strategies | HERE]]. | |||
='''[[Trading Rules to Live By]]'''= | |||
There are some [[Trading Rules to Live By | rules]] in trading that simply stand the test of time... because they work! Of course, not all [[Trader Types | traders]] will agree on every rule but in general, there are some [[Trading Rules to Live By | rules]] that if they are followed with consistency they will help [[Trader Types | traders]] stay out of trouble and keep them on the right side of trading. | |||
In this Wiki, we will explore several [[Trading Rules to Live By]] including: | |||
* [[Trading_Rules_to_Live_By#Cut_Your_Losses | Cut your Losses]] | |||
* [[Trading_Rules_to_Live_By#Let_your_Profits_Run | Let Profits Run]] | |||
* [[Trading_Rules_to_Live_By#Don't_Buy_Something_Just_because_it_Looks_Cheap | Don't Buy because it looks Cheap]] | |||
* [[Trading_Rules_to_Live_By#Don't_Sell_Something_Just_because_it_looks_Too_Expensive | Don't Sell because it Looks Expensive]] | |||
* [[Trading_Rules_to_Live_By#Don't_Overtrade | Don't Overtrade]] | |||
* [[Trading_Rules_to_Live_By#Don't_Trade_on_Tips | Don't Trade Tips]] | |||
* [[Trading_Rules_to_Live_By#Always_Trade_Liquid_Markets | Trade Liquid Markets]] | |||
* [[Trading_Rules_to_Live_By#Keep_Position_Size_Manageable | Keep Positions Size Manageable]] | |||
* And so much more... | |||
You can access the main Wiki on [[Trading Rules to Live By]] [[Trading_Rules_to_Live_By | HERE]]. | |||
= | =Share This Wiki= | ||
'''Thank you for reading this far. If you have found this Essential Forex Trading Guide Wiki to be valuable please consider taking the time to share this on your social media or chat forums. We are trying our best to create content that will have a meaningful impact on retail traders' performance so that we can level the playing field. Thank you for your support!''' | |||
Latest revision as of 16:12, 26 October 2023
Trading in the Forex market can be a complicated and difficult task if you don't know where to start or what type of information to consume. There is an enormous amount of information available on the internet and even more people that want you to spend your hard-earned money on their courses, systems, signals, algos or any other number of trading related schemes. What we have done in this Wiki is break down the essential skills and information you will need to build a solid foundation as a Forex trader.
We have gone to great lengths to put this information together which was developed and written by actual full-time Forex traders with decades of experience. It is our hope that, with this information, we can bridge the gap between the big banks and retail traders to help put more money in the pockets of retail Forex traders and less in the coffers of the big banks.
In this Wiki, we will look at the 6 Essential Elements of Professional Forex Trading, why they are so important to your success, and how to approach learning them. We will also dive into developing your trading processes using tools and routines. And finally, we will finish this extensive guide with trading strategies and rules to live by that have actually been shown to generate profits in the Forex market by real traders.
Just a reminder: This Wiki is intended for educational purposes only and is not intended as financial advice. Consult your financial advisor should you have questions about your finances.
The 6 Essential Elements of Forex Trading
In this Wiki, we will look at the 6 essential elements of professional Forex trading, why they are so important to your success, and how you should approach learning them. Understanding these 6 key elements will help form the structure of your learning and understanding of how the Forex market works and why price moves the way they do. Trading is a business just like any other with many moving parts and lots of things you need to know. We have done our best and are constantly updating this Wiki and the other Wikis it links to in order to give you the best information available to help you make more pips.
The 6 Essential Elements of Forex Trading are:
- Fundamental Analysis
- Sentiment Analysis
- Risk Management
- Trading psychology
- Price Action Analysis
- Technical Analysis
You can click on any of those links above now to take you to the Wikis on those subjects or you can keep reading the brief descriptions below for a bit more information.
After you have a solid understanding of these 6 concepts the next thing you need to do is define your trading strategies based on what makes the most sense to you and your situation.
This Wiki is an aggregate of several other Wikis. At any time you can click on the links to the other Wikis where you will be brought to the main Wiki for that subject. In those Wikis, you will find great amounts of information that are designed to help you understand each subject like a professional. There is a heavy emphasis on trading in line with the larger players in the market that are the ones that are responsible for moving the Forex market.
Fundamental Analysis
Fundamental Analysis is simply the process of identifying and understanding the "factual reasons" why the market is moving in the direction that it is currently moving within the overall trend over the long term. This is in contrast to identifying that a trend or price move has already happened which is the job of Technical Analysis. Technical Analysis is backward-looking at past prices while Fundamental Analysis is forward-looking and allows you to use current information to try and predict where prices might go in the near future.
Fundamental Analysis is an extremely underserved subject when it comes to retail traders and how they obtain their trading knowledge. Whereas Technical Analysis uses past prices and indicators based on past prices, Fundamental Analysis uses past market information to try and predict the future direction of prices. This past market information is what the big banks and hedge funds use to make their trading decisions and these are the people that have the money to move prices so it makes sense for us retail traders to understand how they are looking at the markets.
In this Wiki, we will explore all the various aspects of Fundamental Analysis including:
- What Fundamental Analysis is
- Objection to Fundamentals
- The differences between institutional and retail traders
- Sentiment Analysis
- Central Banks
- Economic Data Releases
- Fundamental Supply and Demand
- Intermarket Analysis
- Economic Cycles
- And so much more...
You can access the main Wiki for Fundamental Analysis HERE.
Sentiment Analysis
Sentiment can be best explained by describing it as the Mood of the market right now in the current trading session. Just like the moods of individuals sentiment can change quickly and for a variety of reasons. This Mood can last seconds, minutes, hours, days and even weeks but is often thought of as shorter in duration than something like the fundamental trend that can be determined using Fundamental Analysis.
In this Wiki, we will explore what sentiment is and the various forms and behaviours that sentiment can manifest itself in Forex and other financial markets including:
- Risk on Risk Off
- Safe Haven Flows
- High Frequency Traders
- Buy the Rumour Sell the Fact
- Volatility
- Profit Taking
- Stop Hunting and Price Squeezing
- Central Bank Policy Divergence
- And so much more...
You can access the main Wiki for Sentiment Analysis HERE.
Risk Management
Risk Management happens when a Forex trader takes active steps to minimize the potential of losing more money on a trade than they originally intended. It is a method unique to each individual Forex trader that is meant to preserve capital so that they do not lose too much money. If a Forex trader is lacking sound Risk Management skills then all the other elements of Forex trading will fail. Without managing risks professionally the risk of blowing out your account becomes way too high.
Risk Management takes many forms and in this Wikki we will take a look at several Risk Management concepts including:
- Risk Management Plan
- Having a Trading Business
- 4 Risk Management Defences
- Developing your Trading Process
- Money Management
- Trade Management
- Stop Losses
- Entries and Exits
- Having an Edge in your Trading
- And so much more...
You can access the main Wiki for Risk Management HERE.
Trading psychology
When someone uses the term "Trading psychology" they are referring to the emotions and mental state of a Forex trader that may dictate the success or failure they will have when trading in the financial markets. This Trading psychology is unique to the individual trader. However, in general, it represents various aspects of an individual’s character and behaviours that influence their trading decisions and consequently, the actions they will take in the markets.
Trading psychology is a vast subject that can take many forms for each individual trader. In this Wiki, we go into great depth on subjects relating to Trading psychology including:
- Emotional States
- Potential and Performance
- The 4 Stages of Competence
- How to Create the Optimal State for High Trading Performance
- Managing the Voice inside our Heads
- How to Have Conviction in your Trading
- Trader Psychology Problems
- Solutions to Trader Psychology Problems
- The Psychology of Money Management
- And so much more...
You can access the main Wiki for Trading psychology HERE.
Price Action Analysis
In its most basic form, Price Action Analysis, also referred to in the following Wiki as "Market Mechanics", is a trader's interpretation of the behaviour that price movements display on a price chart, both current and past. Price Action Analysis helps traders to understand the "Way" in which Sentiment and Fundamental information are displayed on a price chart.
In this Wiki, we will explore several areas of Price Action Analysis including:
- The Basic Cycle
- The 4 Stages of the Basic Cycle
- The Only Way to Profits or Losses
- Trends
- Breakouts and Breakdowns
- Macro Trend Analysis
- Retracements
- Trend Lines
- The 7 Market Movements
- Pivot Point Analysis
- And so much more...
You can access the main Wiki for Price Action Analysis HERE.
Technical Analysis
Technical Analysis is a method of analyzing a price chart in an attempt to predict where the price of a financial asset will go in the future using past charting data and other technical indicators. Technical Analysis is a trading discipline employed by some traders, mainly retail traders, to evaluate and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. It typically involves using indicators and oscillators that have gained popularity as trading in financial assets has increased in popularity among retail traders over the years.
In this Wiki, we will examine many areas Technical Analysis and draw many comparisons to how a professional institutional trader would approach technical analysis versus how a typical retail trader would. We will explore such subjects including:
- What Technical Analysis is
- Japanese Candlesticks
- Previously Trade Price Areas
- Price Based Support and Resistance
- Average Daily Range
- Moving Averages
- Fibonacci
- Fractals
- Market Flow
- Trader Mistakes with Technical Analysis
- And so much more...
You can access the main Wiki for Technical Analysis HERE.
Developing your Trading Process
Your trading process will be unique to you. However, there are some common these that are universal to all successful traders. In the following Wiki, we will explore the Trading Tools and Trading Routines that you will need in order to trade effectively in the markets.
You can access the main Wiki on Developing your Trading Process HERE.
Trader Types
All traders are not created equal. Traders are people and people have lives. Not everyone that comes to the business of trading will have the same amount of time they can commit to learning the process of trading. Equally, not everyone will have the same amount of time to commit to actually deploying what they have learned in the financial markets. It is for these reasons that there are three different types of traders that are the most common in the financial markets. Of these Forex trader types, the main thing that differentiates them is the amount of time that is spent in a trade.
In this Wiki, we will take a look at The 3 Main Trader Types including:
You can access the main Wiki on Trader Types HERE.
Forex Market Hours
Trading in Forex is not just as simple as working a 9 to 5 job. There are differences in timing that you need to be aware of because of things like daylight savings time.
In the following Wiki, we dive into Forex Market Hours and the various differences that we have at certain times of the year in the Easter Time Zone (EST) vs. Greenwich Mean Time (GMT) including:
You can access the main Wiki for Forex Market Hours HERE.
Forex Trading Sessions
Trading in Forex is a 24-hour 5 days per week business. However, not all times in the 24-hour [Forex_Trading_Sessions trading day]] are created equal. In fact, there are several different personalities to the Forex market that happen throughout the day. These personalities are typically separated by trading sessions that correspond to active stock markets during that time.
In this Wiki, we will explore and gain an understanding of the various characteristics that make up the personalities of the:
You can access the main Wiki for Forex Trading Sessions HERE
Best and Worst Times to Trade
In general, not all times of the day are created equal in terms of potentially finding profitable trades that will have enough volatility to move to your trade targets. In the same light, not all times of the week will present the same type of trading environment conducive to profitable trading. In this Wiki, we will explore:
- The best times of the day to trade
- The best days of the week to trade
- The worst days of the week to trade
- The best day trade timing blueprint
You can access the main Wiki for Best and Worst Times to Trade HERE
Trading Methods
Pre-Trade Considerations
Before placing a trade you should have a very good reason for putting your money to work in that particular trade. In the following Wiki, we will explore concepts that you should have already considered prior to getting into a trade such as:
- Understanding economic indicators and the market expectations of those indicators
- Framing a strategy in the context of the current market sentiment
- Basic strategy rules that you should have prior to getting into a trade
You can access the main Wiki for Pre-Trade Considerations HERE
Fundamental and Sentiment Trading Strategies
Utilizing Fundamental and Sentiment based trading strategies in the Forex market is not typically how retail traders start out their trading career. However, many retail traders who do discover these types of strategies will tell you that this is when they had their "Breakthrough" from being an "inconsistent breakeven trader" to becoming a "consistently profitable trader." We developed this Wiki with the hope that more of our fellow retail traders will have their "Breakthrough".
In this Wiki, we will explore Fundamental and Sentiment Trading Strategies including:
- How to Trade Risk Events
- How to Trade with Central Banks
- How to Trade Upcoming Economic Figures
- How to Trade the Previous Session
- Trading Surprise Data and News
- Trading with the News Feed
- Trading Fundamental Pullbacks
- Positioning Yourself with Medium Term Sentiment
- Carry Trading
- And so much more...
You can access the main Wiki for Fundamental and Sentiment Trading Strategies HERE
Technical Trading Strategies
Technical Trading Strategies typically forms the initial basis for trading decisions by retail traders when they enter the Forex market for the first time. Understanding Technical Trading Strategies is a good place to learn how to enter and exit trades. However, Technical Trading Strategies are best used as a Timing Tool with the prevailing Fundamental and/or Sentiment trend.
In this Wiki we will explore Technical Trading Strategies including:
- The 3-5 Candle Drop and Pop
- The Breakout and the Breakdown
- Bullish and Bearish Momentum Stall
- Matched Move Higher and Lower
- Climactic Buys and Sells
- The 3-5 Candle Drop and Pop Moving Average Play
- Moving Average Buy and Sell Zone
- Major Support Buy and Resistance Sell Zones
- When to Trade Technical Strategies
- Trading Strategies and the Stages of the Basic Cycle
- Strategies Combined with the Basic Cycle
- Intermediate Technical Trading Strategies
- Chart Patterns
And so much more...
You can access the main Wiki for Technical Trading Strategies HERE.
Trading Rules to Live By
There are some rules in trading that simply stand the test of time... because they work! Of course, not all traders will agree on every rule but in general, there are some rules that if they are followed with consistency they will help traders stay out of trouble and keep them on the right side of trading.
In this Wiki, we will explore several Trading Rules to Live By including:
- Cut your Losses
- Let Profits Run
- Don't Buy because it looks Cheap
- Don't Sell because it Looks Expensive
- Don't Overtrade
- Don't Trade Tips
- Trade Liquid Markets
- Keep Positions Size Manageable
- And so much more...
You can access the main Wiki on Trading Rules to Live By HERE.
Thank you for reading this far. If you have found this Essential Forex Trading Guide Wiki to be valuable please consider taking the time to share this on your social media or chat forums. We are trying our best to create content that will have a meaningful impact on retail traders' performance so that we can level the playing field. Thank you for your support!