Scalping Forex System. Forex trading signals. M5 chart.

As you remember, last time we spoke about Forex scalping strategy. I demonstrated you few interesting examples of some forex scalping theories. You saw how you can get more than 50$ dollars profit in 1 minute only. Today we will continue to discuss Forex scalping pattern and I’ll show you another example of Forex trading signals on M5 chart.

Scalping Forex System.

This example of scalping forex is most profitable during the New York and London trade sessions. Many Forex traders are using this scalping strategy. You can easy test it by yourself on your demo Forex account. As for me, it works fine in 70%. But you should remember – Forex is very risky business and if it works for me, it may not work for you.

I have used this system for a long time and it continues to provide great consistency. As you know, any Forex strategy has its own entry point, especially if it scalping forex strategy. It is very important to remember that you must not overtrade with this scalping system. First of all, you have to wait for the right setup at the right time.

Step 1. Setting up your Forex indicators & charts.

Open your Metatrader platform(or another Forex platform you are working with). Now open a 5 minute chart for the EUR/USD currency pair and add a 10ema indicator, a 21ema and a 50ema forex indicators. That’s it! I told you it was simple!

Now change the colors of these ema indicators. In my case I will use:

• 10ema = Red.
• 21ema = Green.
• 50ema = Blue.

As you know(or not) two indicators: the 10ema and 21ema act ask strong support and resistance, when the Forex market is trending throughout a session. In a strong trend we can turn this to our advantage and scalp forex market while insuring we are trading in the direction of the short term(!) trend, giving us a good trading edge to take some quick pips.

Now you can see small example(diagram) of scalping with the trend:

Small example(diagram) of scalping with the trend.

Step 2. Main scalping system rules:

As I told before, the rules of this trading system are very simple.

• First of all wait for a trend to show on the 5 minute Forex chart, higher highs in an up trend and lower lows in a down trend. Just look at the 50ema indicator for trend strength and direction.
• Make sure you are during the New York and London trade sessions(not Asian session).
• Check there is no major upcoming Forex news about to come out, before you start trading. For this purpose use Forex Daily Events Calendar.
• Once price enters half way into the zone open a trade, sell for downtrend and buy for up trend. It’s very important rule!
• Set up your stop loss at 5-7 pips + spread.
• Move stop to break even at +5 pips.
  
• Set up your take profit at 7-10 pips.
• Good Luck!!!

Remember, scalping Forex system is very and very aggressive system. Make you Forex life more stable with more frequent strategies changes. From scalping to long-term trading and back.

Forex trading signals.

Forex economic calendar. Week 27.07.2009 - 1.08.2009.

Every Sunday Forex2Easy.com presents you next week Forex economic calendar. Here you can find the most advanced and reliable Forex economic events around the world. Our Forex economic calendar focuses on main Forex market events and world economy reports. World News Forex Economic Calendar will help our customers trade more effectively. Also you can find most sensible explanations for evey Forex and economic events.

Forex economic calendar.

Main Forex Events: 27.07.2009 – 1.08.2009

Info	Date	Time(GMT)	Currency	Forex Event
	27/07/09	15:00	USA	4-Week Bill Announcement.
	27/07/09	15:30	USA	6-Month Bill Auction.
	27/07/09	15:30	USA	3-Month Bill Auction.
	27/07/09	17:00	USA	20-Yr TIPS Auction .
	28/07/09	11:45	USA	ICSC-Goldman Store Sales.
	28/07/09	17:00	USA	4-Week Bill Auction.
	28/07/09	17:00	USA	52-Week Bill Auction.
	28/07/09	17:00	USA	2-Yr Note Auction.
	29/07/09	11:00	USA	MBA Purchase Applications.
	29/07/09	14:30	USA	EIA Petroleum Status…
	29/07/09	17:00	USA	5-Yr Note Auction.
	30/07/09	04:00	ALL	52-Week Bill Settlement.
	30/07/09	12:30	CAD	RMPI.
	30/07/09	12:30	CAD	IPPI.
	30/07/09	14:30	USA	EIA Natural Gas Report.
	30/07/09	15:00	USA	3-Month Bill Announcement.
	30/07/09	15:00	USA	6-Month Bill Announcement.
	30/07/09	17:00	USA	7-Yr Note Auction.
	30/07/09	23:30	JPY	Household Spending.
	31/07/09	04:00	USD	7-Yr Note Settlement.
	31/07/09	04:00	USD	2-Yr Note Settlement.
	31/07/09	04:00	ALL	5-Yr Note Settlement.
	31/07/09	04:00	USD	20-Yr TIPS Settlement.
	31/07/09	09:00	EUR	HICP Flash.
	31/07/09	12:30	USD	Employment Cost Index.
	31/07/09	19:00	USD	Farm Prices.

Forex events schedule.

Head and shoulders pattern. Forex trading.

Independent, which time unit, is applied price movement Forex charts form different kinds of periodically repeating equal patterns. Some of those patterns always occur on charts before the trend reversal when the volume is significantly decreasing or increasing. Such formations known as reversal patterns are considered below.The Head and shoulders pattern is one of the most reliable and well known chart formations. It consists of three consecutive rallies. The first and third rallies—the shoulders—have about the same height, and the middle one—the head—are the highest. All three rallies are based on the same support line (or on the resistance line in the case of the reversed Head and shoulders formation), known as the neckline.

Head and shoulders pattern.

A real example of the “Head and shoulders pattern” is shown on the Figure bellow:

Diagram of a typical Head-And-Shoulders pattern.

Prior to point A, the neckline was a resistance line. Once the resistance line was broken, it turned into a significant support line. The price bounced off it twice, at point’s В and C. The neckline was eventually broken in point D, under heavy volume, and the trend reversal was confirmed. As the significant support line was broken, a retrenchment could be expected to retest the neckline (E), now a resistance line again. If the resistance line held, the price was expected to eventually decline to around level F, which was the price target of the head-and-shoulders formation. The target was approximately equal in amplitude to the distance between the top of the head and the neckline. The Forex price target was measured from point D, where the neckline was broken (line DF on Figure).

Example of a real Head and Shoulders pattern in the Pound Sterling chart.

Signals generated by the head-and-shoulders pattern. The head and shoulders formation provides excellent Forex information:

1.The support line. This is based on point’s В and C.
2. The resistance line. After giving in at point D, the market may retest the neckline at point E.
3. The price direction. If the neckline holds the buying pressure at point E, then the formation provides information regarding the price direction: diametrically opposed to the direction of the head and shoulders (bearish).
4. The price target. This is provided by the confirmation of the formation (by breaking through the neckline under heavy trading volume).

One of the main requirements of the successful development of this formation is that the breakout
through the neckline occurs under heavy market volume. A breakout on light volume is a strong warning that it is a false breakout and will trigger a sharp backlash in the currency price. The time frame for this chart formation’s evolution is anywhere from several weeks to several months. The intraday chart formations are not reliable.

Inverted Head And Shoulders. The inverted head-and-shoulders formation is a mirror image of
the previous pattern. Therefore, you can apply the same characteristics, potential problems, Forex signals, and trader’s point of view from the preceding presentation. The underlying currency broke out of the downtrend ranged by the xx’-yy’ channel. The currency retested the previous resistance line (the rally number 3), now turned into a support line. Among the three consecutive rallies, the shoulders (1 and 3) have approximately the same height, and the head is the lowest. Prior to point A, the neckline was a support line. Once this line was broken, it turned into a significant resistance line. The price bounced off the neckline twice, at point’s В and C.

Diagram of a typical inverted head-and-shoulders pattern.

The neckline was eventually broken at point D, under heavy volume. As the significant resistance line was broken, a retrenchment could be expected to retest the neckline (E), now a support line again. If it held, the price was expected to eventually rise to around level F, which is the price target of the head and shoulders formation. The price objective is approximately equal in amplitude to the distance between the top of the head and the neckline, and is measured from the breakout point, D.

An example of an inverted head-and-shoulders pattern in the Swiss franc chart.

Next time I’ll explane you about double top, double bottom and triple top Forex patterns. You’ll see a real example from my Forex trading life.

Trend Reversal Patterns.

10 Pips A Day Easy! New Forex trading strategy.

Dear friend, let’s cut to the chase. Here’s the trading setup, entry rules, stop loss rules, and exit rules of this system. I truly believe it easy can potentially generate much more than 10 pips a day. But I’m sure like me, you’re probably sick of those unbelievable claims from the self-proclaimed Forex “GURUS”… You know, promises of 1000 pips a day, millions of dollars overnight…

10 Pips A Day Easy!

OK. Enough of my rants. Let’s get started right away:
In this system, we use 3 Forex indicators:

• 5-period Exponential Moving Average (EMA 5) applied to the Close.
• 12-period Exponential Moving Average (EMA 12) applied to the Close.
• 21-period RSI (RSI 21).

Entry Rules for Long Trades:

It’s simple. We enter a long trade when EMA 5 crosses EMA 12 to the upside. AND our RSI 21 > 50.

Entry Rules for Long Trades:

Enter short when EMA 5 crosses EMA 12 to the downside and RSI 21 < 50.

Stop loss = 20 – 30 pips… depending on the volatility of the currency pair. For more volatile pair, like GBP/USD, stop loss = 30 pips. For less volatile pair, like EUR/USD, use stop loss of 20 pips. This is strong Forex trading strategy.

Exit Rules for Long Trades:

Exit the trade when EMA 5 crosses back below EMA 12 OR RSI 21 < 50.

Exit Rules for Short Trades:

Exit our short trade when EMA 5 crosses above EMA 12 OR RSI 21 > 50 !

Do you want example? Take it!

Short Trade Example:

10 Pips A Day Easy. Short Trade Example.

And Long Trade Example:

10 Pips A Day Easy. Long Trade Example.

There you have it. A manual trading system for consistently making a conservative 10 pips a day. I hope you enjoy this short publication.

Oh, before I forget, I need to tell you something… That I think will benefit you tremendously. Especially if you’re new to Forex OR don’t have time to sit glued your monitor watching the market 24/7, OR if you’re just lazy (like me) and want an automated system that requires little work on your part.

My readers have been asking me for 5 years… to create an automated forex trading software… An autopilot system for “the little guys” – who have little capital… little time… or no patience… to trade Forex the old and boring way.

Our team of programmers and I have been developing it for 3 years. From our testing (back-test and forward-test), it can potentially make up to 465 pips ($4,650) each and every week…

And how many pips you make a day?

New Forex trading strategy.

Elliott wave principle. Elliott wave theory & Forex.

Let’s see how technical analysis can help us if our Forex life. As you know (or not) – the Elliott Wave Principle is a detailed description of how financial markets behave or in other words – is a form of technical analysis that attempts to forecast trends in the financial markets. In this article I want to describe “The Eleven Elliott Wave Patterns” and how It can help us in Forex Trading.

Elliott wave principle.

Many traders using Elliott wave principle as powerfull Forex strategy. Let’s see why it’s working?!

Motive Waves (moving with the larger trend):

Impulsive or Motive waves always move with the larger trend, consist of five waves, and are
labelled 1-2-3-4-5.

Impulse: (IM)

An Impulse is a five-wave pattern labelled 1-2-3-4-5 moving in the direction of the larger trend.

Elliott wave principle. Impulse.

1) Wave 1 must itself be an Impulse or a Leading Diagonal pattern.
2) Wave 2 can be any corrective pattern except a Triangle.
3) No part of wave 2 can retrace more than 100% of wave 1.
4) Wave 3 must be an Impulse.
5) Wave 3 must be longer than wave 2 by price.
6) Wave 4 can be any corrective pattern.
7) Waves 2 and 4 cannot overlap.
8 ) Wave 5 must be an Impulse or an Ending Diagonal.
9) Wave 5 must be >= 70% of wave 4 by price.
10) Wave 3 must never be the shortest by price when compared to waves 1 and 5.
It’s main idea of Elliott Wave Principle.

Diagonal Triangle:

A Diagonal is a common 5-wave motive pattern labelled 1-2-3-4-5 that moves with the larger
trend. Diagonals move within two contracting channel lines drawn from waves 1 to 3, and from waves 2 to 4. There exist two types of Diagonals: Leading Diagonals (LD) and Ending Diagonals (ED). They have a different internal structure and are seen in different positions within the larger degree pattern. Ending Diagonals are much more common than Leading Diagonals.

Elliott wave theory . Diagonal Triangle.

1) Diagonals must move within two contracting channel lines
2) Channel lines must converge, slope in the same direction and not be horizontal.
3) Wave 1 of a LD is either an IM or a LD
4) Wave 1 of an ED is a Zigzag, Double or Triple Zigzag.
5) Wave 2 may be any corrective pattern except a Triangle.
6) Wave 2 is never longer than Wave 1 by price.
7) Wave 3 of a LD must be an IM(Elliott wave theory).
8 ) Wave 3 of an ED is a Zigzag, Double or Triple Zigzag.
9) Wave 3 is always greater than Wave 2 by price.
10) Wave 4 may be any corrective pattern.
11) Waves 2 and 4 must overlap.
12) Wave 5 of an ED is a Zigzag, Double Zigzag or Triple Zigzag.
13) Wave 5 of a LD is either an IM or ED.
14) Wave 3 must not be shorter by price than both Waves 1 and 5
15) Wave 5 must be more than 50% of Wave 4 by price.
16) Wave 5 is never the longest by price when compared with Wave 1 and Wave 3.
17) Wave 5 is never longer than Wave 3 by price.

Corrective Waves (moving against the larger trend):

Corrective Elliott patterns are either 3 or 5 wave patterns, labelled with letters, and move against the larger trend.

ZigZag:

A Zigzag is a 3-wave structure labelled A-B-C, generally moving counter to the larger trend. It is one of the most common corrective Elliott patterns.

Elliott Wave Patterns. ZigZag.

1) Wave A must be an IM or a LD.
2) Wave B can only be a corrective pattern.
3) Wave B must be shorter than wave A by price distance.
4) Wave C must be an IM or an ED.
5) Wave C must be at least 70% of Wave B by price.

Double and Triple Zigzag (DZ and TZ):

Double and Triple Zigzags are similar to Zigzags, and are typically two or three Zigzag patterns strung together with a joining wave called an x wave. They are corrective in nature.
Triples are uncommon. Zigzags, Double Zigzags and Triple Zigzags are also known as Zigzag family patterns, or Sharp’ patterns. Double Zigzags are labelled w-x-y, while Triple Zigzags are labelled w-x-y-xx-z. Both these patterns are included in the list of rules and guidelines below. Only a Double Zigzag is illustrated below:

Elliott wave principle. Double and Triple Zigzag.

1) Wave W must be a Zigzag.
2) Wave X can be any correction except an ET.
3) Wave X must be smaller than wave W by price.
4) Wave Y must be a Zigzag.
5) Wave Y must be greater or equal to Wave X by price.
6) Wave XX can be any correction except an ET.
7) Wave XX must be smaller than wave Y by price.
8 ) Wave Z must be a Zigzag.
9) Wave Z must be greater than or equal to Wave XX by price.

Flat:

A Flat is a three-wave pattern labelled A-B-C that gener
counter-trend and is a very common Elliott pattern:

Elliott wave theory. Flat.

1) Wave A can be any corrective pattern.
2) Wave B can be any corrective pattern except a Triangle.
3) Wave B must retrace at least 50% of A by price.
4) Wave B must be less than 200% of Wave A by price.
5) Wave C must be either an IM or ED.
6) Wave C must share some common price territory with Wave A.

Double and Triple Sideways:

Double and Triple Sideways Elliott patterns (also known as Double 3’s and Triple 3’s) are similar to Flats, and are typically two or three corrective patterns strung together with a joining wave, called an x wave. They are all corrective in nature. Triples are rare.
Doubles are labelled w-x-y, while Triples are labelled w-x-y-xx-z.
Both these patterns are included in the list of rules and guidelines below. Only a Double 3 is
illustrated below.

Elliott Wave Patterns. Double and Triple Sideways.

1) Wave W may be any corrective pattern except a Triangle, Double (or Triple) Zigzag or
Sideways pattern.
2) Wave X may be any corrective pattern except a Triangle, Double (or Triple) Zigzag or
Sideways pattern.
3) Wave X must retrace Wave W by at least 50%.
4) Wave Y may be any corrective pattern except a Double (or Triple) Zigzag or Sideways
pattern.
5) Wave Y cannot be a Zigzag if W is a Zigzag.
7) Wave Y must be less than 200% of Wave W by price.
6) Wave Y must be at least as long as Wave X by price except if it is a Triangle.
7) Wave XX may be any corrective pattern except a Triangle, Double (or Triple) Zigzag or
Sideways pattern.
8 ) The minimum XX wave retracement is 50% of Y.
9) Wave Z may be any corrective pattern except a Double (or Triple) Zigzag or Sideways pattern.
10) Wave Z cannot be a Zigzag if Wave Y is a Zigzag
11) Wave Z must be longer than Wave XX by price.

Triangle (CT and ET):

A Triangle Elliott pattern is a common 5-wave corrective pattern labelled A-B-C-D-E that moves counter-trend. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. A Triangle is either Contracting (CT) or Expanding (ET) depending on whether the channel lines are converging or expanding. Expanding Triangles are rare. Only a Contracting Triangle is illustrated below:

Elliott wave principle. Triangle.

1) All waves in an ET must be ZZ, DZ, or TZ.
2) In a CT:

• Wave A is restricted to a ZZ, DZ, TZ or FL.
• Wave B is restricted to a ZZ, DZ, or TZ.
• Wave C is any corrective pattern except a Triangle
• Wave D is any corrective pattern except a Triangle
• Wave E is restricted to a CT, ZZ, DZ, or TZ.

3) The intersection of the channel lines must occur beyond the end of a CT, and before the
beginning of an ET.
4) The channel lines must either converge or diverge. They cannot be parallel.
5) Only one channel line in a CT may be horizontal.
6) Neither channel line of an ET can be horizontal.
7) Wave E must end in the price territory of A.

As you see very interesting aspect of Elliott wave theory is that each wave is made up of another 5-3 pattern, and then each of these smaller waves is also made up of a 5-3 pattern. Elliott explained that the upward and downward swings of the mass psychology always showed up in the same repetitive patterns, which were then divided into patterns he called “waves”.

Next time we will see how Elliott Wave theory and other Forex strategies can increase your Forex swing trade opportunities.

Elliott wave theory for Forex.

Forex Risks. Top 10 Forex Risks & example.

It is not a secret that Forex trading – is risky employment. I see many forex traders lose 90% of their money. Can people really make profit from forex trading? The answer is “YES”! But you have to know about Forex Risks you can find on your Forex trading way. Before even diving into Forex, you should know that this type of investing can be quite risky. There are many kinds of different risks associated with Forex trading. The major risks include interest rate risk, credit risk, exchange rate risk and country risk.

Forex Risks.

As you know, Forex Risks it’s analyse the unprredictable nature of Forex – foreign currency markets. Forex risks are always present when you trade Forex. Just like any other investment vehicle, Forex trading does have its risks. No matter how carefully you plan to manage your losses and profits, trading is inherently risky. How to control Forex risks?

Forex Risk Num. 1: “Exchange Rate Risk”.

Exchange Rate Risk – refers to the fluctuations in currency prices over a trading period. Prices can fall rapidly resulting in substantial losses unless stop loss orders are used when trading FOREX. Stop loss orders specify that the open position should be closed if currency prices pass a predetermined level. Stop loss orders can be used in conjunction with limit orders to automate FOREX trading – limit orders specify an open position should be closed at a specified profit target.

Forex Risk Num. 2: “Not use stop loss?”

Always use a stop loss. This stop loss can be a mental point when you decide that you’ll exit the trade, or a stop loss order that you place on your broker. No matter what your choice is, a stop loss point is a good way to avoid high risks. It allows you to avoid fear and greed, and to cut your losses before they rip off your account.

Forex Risk Num. 3: “Trade with at least 2:1 risk/reward.”

This means that for every pip you’re risking, you’ll plan to win at least 2 pips. If your target is at least twice your stop loss, you can be wrong 50% of the times and still make money in the end.

Forex Risk Num. 4: “Interest Rate Risk.”

Interest Rate Risk – can result from discrepancies between the interest rates in the two countries represented by the currency pair in a FOREX quote. This discrepancy can result in variations from the expected profit or loss of a particular FOREX transaction.

Forex Risk Num. 5: “Country Risk”

Country Risk – is associated with governments that may become involved in foreign exchange markets by limiting the flow of currency. There is more country risk associated with “exotic currencies” than with major currencies that allow the free trading of their currency.

Forex Risk Num. 6: “Use risk management rules!!!”

Don’t risk more than 5% of your account in a single trade. If you risk too much, you can suffer big losses in a matter of days or even hours. If you decide to risk no more than 5% of your account in a single trade, you won’t lose all your account unless you lose more than 20 times in a row.

Forex Risk Num. 7: “Trading with unknown broker.”

Trade with a solid and reliable Forex broker. If you choose the wrong forex broker, that’s enough to be in a high risk situation. Don’t ever trade with unregulated brokers or brokers that trade against their clients. Make sure you trust your broker (and that you have good reasons to do so) before you open an account.

Forex Risk Num. 8: “Credit Risk.”

Credit Risk – is the possibility that one party in a FOREX transaction may not honor their debt when the deal is closed. This may happen when a bank or financial institution declares insolvency. Credit risk is minimized by dealing on regulated exchanges which require members to be monitored for credit worthiness.

Forex Risk Num. 9: “Avoid trading during news releases.”

If you’re trading during a major economic release, you’re taking some high risks. The economic release can result in major volatility on the market, and if this volatility goes against your position, you’ll be in trouble. So, if you want to avoid higher risks, don’t trade during news unless you’re an experienced trader.

Forex Risk Num. 10: “Avoid short day trading”

Day trading is the most difficult technique to use in Forex. The market is open 24 hours a day and the day trader has to be experienced in order to manage his trades and to deal with all the stress that comes with day trading. It’s better to start trading in larger time frames so that you can trade with less stress and with better risk/reward positions.

And as I promised – short example:

Probably, most important thing you can do – keep learning and practicing as much as you can. This will allow you to minimize risks and to develop new and powerful strategies to make money on Forex.

Top 10 Forex Risks.

What is Forex? Top 7 Forex definitions.

Day by day of Forex becomes more and more popular and claimed. And it not surprisingly, a lot of money is there revolved in fact. Today best Forex Blog – Forex2Easy offers to you Top 7 definitions of Forex. The simple sense of Forex (Forex currency exchange, Foreign Exchange) is simultaneous purchase and sale of the currency or the exchange of one country’s currency for the one of another country…

What is Forex?

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What is Forex? Forex trading. Forex online.

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What is Forex? Easy forex. Forex market.

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What is Forex? Forex charts. Main Forex signals.

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What is Forex? Forex strategy. Forex trading strategies.

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What is Forex? Forex profit. Forex news.

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Forex soft download. Forex factory. Forex analytics.

What is Forex?

Forex Daily Events. Forex schedule.

Here you can find out about current and upcoming economic events through Forex2easy “Forex events calendar”. Forex calendar is your source for daily and weekly forex and economic calendar. The calendar provides updated and live breaking results to the economic indicators expected on the forex calendar for that day or week.

Financial and forex news events of the week, their currency market impcat in easty to read Forex2easy financial Daily events calendar. Forex calendar of events and announcements.

Online Forex Ratings.com provides you with an Forex Calendar in which you can check upcoming economic events. Find out which financial indicators are to be released, and how they will impact the forex markets.

Forex Daily Events Calendar.

It will help to foresee the future in Forex trading.
Now you will have the latest news from the world of Forex!

Forex Events Schedule.