How to use relative strenght index!

Here is how i use relative strength index with much success and sometimes little failure but overall this indicator is helpful if well understood about how it reacts to the forex market.
when i start my trading day i first look at the rsi in relation to its water mark that is where it is? if it is above the 50 mark i know we are in an uptrend and if it is below the 50 mark i know we are in a downtrend. Then off course i consult the other indicators like macd and stochastic to have a clearer and better direction as to where the market is going remember the two things you want to know in trading are what is the direction of the market and where is it that you will enter to take profit at the right moment understanding rsi in conjunction with these other indicator and the use of pivot points has been the best way of knowing when to enter the market.
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This is a trade i entered sometime ago note how the rsi crossed it 50 mark to indicate that we are now in a down trend.back test these indicator on anytime frame but i recommend you tested and using it on the one hour chart as it has proven to give more accurate and trusted signal there.
happy trading!!!

What is forex rsi

Many traders, especially Forex traders would definitely agree that today and other times, it can be very difficult trading currency and trying to earn consistent winnings, which are very hard to come by for a lot of people. When dealing with Forex, people need to know about the RSI, which is the Relative Strength Indicator. This tool is very helpful when dealing with the Forex trading strategy. The RSI strategy is used to measure the value of currency that is being traded relative to the same currency during a fixed time period. Usually, it consists of 14 bars on a scale that ranges from 0-100. It is important know how to use RSI and once you understand it, you are sure to be able to make consistent winnings.

With Forex trading, the platforms have a 9 period look back period, though Forex traders can use many different periods and have many to choose from. Basically, the shorter that the period is, the more changeable the RSI is, and this then produces more Forex trading signals. The opposite of this is that the longer the Forex trading period, the RSI becomes much more stable and in the end produces less trading signals.

When dealing with the Forex market system, the RSI is able to show the Forex market activity. The RSI indicator is one of the most popular and widely used indicators when dealing with the Forex market. It shows the activity in the market on whether things are over bought or over sold, which becomes very useful to traders. The RSI is able to provide the Forex traders with the direction of how the Forex system is moving. With the help of the RSI, Forex traders are able to make reasonable and sensible decisions, depending on how the Forex market is flowing.

When using the RSI and the number it provides, it is important to know that the greater the number, the greater over bought market there is presently. And accordingly, the opposite is also true. The smaller the RSI number, the move over sold the Forex market is. With this knowledge, Forex traders are able to make smart decisions of what they should do next.

Since the RSI is used to measure the point when the Forex market is oversold, overbought, or has the capability to continue to move in the same direction, it becomes very helpful and extremely important to know how it works. When the RSI is above 75, the Forex market is overbought, but when it is below 25, the market is oversold.

The RSI is also very helpful in other ways. It helps Forex traders who are looking for micro reversals and macro reversals dealing with the Forex market. With this added assistance, more and more people have decided to use and determine which action they are going to take depending on the RSI.

When trading Forex, it is very important to know how RSI works and how to interpret the information that is provides. To be successful in the Forex market, knowing RSI can become a big help.I recommend you visit Smart Forex Live for more information and tips on Forex Killer.

How to trade forex pivot points effectively!

Effective market timing - or when to enter and exit a trade - is always a top issue among FX traders. This is where pivot points can be used in an effective Forex trading system.

Pivot points are basically a turning point in the currency markets. They are the point at which market sentiment has effectively switched from over bought to over sold or bearish to bullish, or any way you want to describe a market switching directions.

Pivot Point Magic

The fact is that many Forex traders trust and rely on them because they work. And the magic of why they work is because so many traders trust and rely on them. It is a self-supporting system. They are used to measure the relative strength and weakness of the currency pair you are trading.

The Calculations

If are trading manually (i.e. without an automated trading system, or trading robot) then you will have to do some math. If you have an automated system then this work will most likely be done inside the program for you.

So lets look at the math. The most common pivot point calculation is a simple average of the high, low and close of a previous period (or session).

So for example the High + the Low + the Closing Price / 3 = your pivot point.

So lets make up some pretend numbers for the EUR/USD and take a look

Open: 1.2386

High: 1.2474

Low: 1.2376

Close: 1.2458

Then to calculate the pivot point you would come up with

PP = (1.2474 + 1.2376 + 1.2458) / 3 = 1.2439

But what does the number mean. It simply means that if the market sneaks past the price of 1.2439 then the Bulls are prices higher. And vice-versa if the currency pair is trading below this 1.2439 then bears are effectively pulling prices lower. And for trading decisions this means that the prices will most likely stay under or over that Pivot Point until the next trading session.

Ahh, but here in lays the problem of pivot points in Forex trading: the markets never close. So what determines when one trading session ends and when another begins? For most traders they refer to Greenwich Mean Time as the beginning and end of the "trading day." This would mean that the trading day begins at 00:00 GMT and tends at 23:59 GMT.

An Effective Forex Pivot Point Trading System

Pivot points turn out to be best used inside a system for quick-turn trading. If you want to learn more about an automated way to trade Forex pivot points using an automated trading system visit > http://ForexTradingRobot.info a popular site for veteran traders and beginners alike.

How To Trade Breakouts Perfectly In Forex!

This trading strategy is a simple way of building long term wealth because there is no correlation in the market between the complexity of an indicator or method and its success.

In fact the opposite is true. Most of the world's top traders who have made consistent profits have used systems that are essentially simple. Simple systems are the best because their logic is easy to understand and implement. If the system is easy to understand, it is easier for a trader to execute it with discipline. There is no point in having a system unless you have confidence in it, to trade it with discipline, even when faced with a losing run of trades.

There are some trades that are more valid than others and the probabilities of the breakout turning into a strong trend are greater. we need to look at some basic criteria for a evaluating breakouts in terms of their probability of success.

Generally, the more times a line of resistance or support has been tested the more important the violation will be if the breakout occurs. We generally never trade less than three tests. What I am trying to say is, you need a minimum of two to three relative equal highs and lows to have a true consolidation base.

The time frame between the tests of resistance and support is also important, likewise the longer the support or resistance has been in place, the more valid the break will be when it comes. Trading breakouts is a great method of catching the really big moves that can pile up big profit - which is the aim of all traders. Every trader could use a breakout system if they want to. The fact, however is that they don't. The fact that the bulk of traders don't want to is the reason why the system works and will continue to work and make mega profits for those that understand the simple concept.

Forex Trading Made Easy!

How to trade with pivot point:

Pivot point in my own opinion represent the best and most reliable way to trade this market as it is only when price gets or come close to a pivot line that all professional traders in the world will be looking to take action. In my own opinion pivot point is the best trading style or strategy to trade the foreign exchange market profitably.

So the question of all questions is when to buy and when to sell. My answer is when you see price break through a pivot point going up for example only at that point should you wait for price to go back to the broken pivot point that was recently penetrated. Plus of course the secondary inputs of the other indicators to clarify and support your decision that you were right. Then if the other indicators confirm an upward continuation as in this example, then you will seek to enter as close to the pivot point that was penetrated as possible. Then take your profit by targeting the next pivot point in your calculated points, or you can move your stop loss to the next point to take more profit in the trade as it continues in your favor.

Foreign exchange trading can be very profitable and may mark the end of your 9 to 5 job with little time to spend in front of your computer. This is because if one is to consider the size of the market it will give a well trained and tutored trader the opportunity to make a huge profit, not to talk of the leverage the market gives you. Learn all you can and demo trade, before going live and you will surely quit your 9 to 5 job.

Happy trading!

Forex Trading System Advanced!

The Fibonacci and Elliot wave:Best currency predictive tool.

The system comprises of the following indicators:
1.Fibonacci
2.Elliot wave
3.candlesticks formation
The Fibonacci retracement levels:0.382,0.250,and 0.750 are very important because trading currencies with Fibonacci tools has been some traders strength in the forex market.

Elliot wave:The primary reason for introducing this powerful trading strategy is to prove the power of Elliot wave theory because it is one of the best indicators that could be used to determine the markets movement from down to top and back down.I have discovered why many traders lose money and also trade the currency market without confidence.The Elliot wave will take traders to the highest altitude and build their confidence from wider viewpoints;it also shows traders how the market is operating.

The Elliot wave is an analysis of the underlying structure of the foreign exchange market.It helps to know the tops and bottom of the market.The wave sequence consist of fives corrected by threes.The sequence remains constant no matter what degree of wave is being analyzed and the wave rhythm is observable as long as there is a minimum amount of trading volume.

Elliot wave could be stretched or compressed(both in time and price)but the underlying form remains constant and,the movement will unfold in it primary direction in series of 5 waves,labeled 1 through 5 waves.

A5 wave movement is normally corrected by a 3 wave movement in the opposite direction.The movement waves(1-5)are called cardinal waves while(1,3,and 5)are called impulse waves.The corrective waves are designated with small letters (a,b,c,d,e).

In real time you are only right when you make money.learn more about Elliot wave and Fibonacci to make more profit in your trading.

Happy trading.

How to pick Extra Profits Scalping the Forex Market!

The purpose of scalping is to make small profits while exposing a trading account to minimal risk,which is due to quick open/close trading method.Using this strategy it is wise you go for 10 to 20 pips plus spread per trade and demo trade this strategy for at least a month before going live with it.

This is a simple and easy to use strategy that requires you to stay disciplined, with little time in front of your computer.it is traded on mostly 15 minutes chart but nonetheless as it is, in trading,the foreign exchange market nothing is cast in stone. That is,you can still modify it and use it on other time frame for example you could apply it to the one hour chart and see how it works.

Trading Period For This Strategy:

Always watch out for trading opportunities around 9 am to 12 pm London trading session for morning trade. And for the afternoon trade(new york trading session)watch out for this time 2 pm to 4 pm London time. An additional advantage for technical traders is when there are no major news event affecting the currency,you will always see a clear trend for the day. When trading using technical indicators make sure you know when the news of the currency you are trading is due out for release so that you can position yourself. That is,close your open trades 10 to 15 minute before news comes out,or enter into a position 10 to 15 minutes after news has been released.

The set up:insert on your chart exponential moving average 4,linear moving average 10. Modify moving average convergence and divergence indicator (10,24,7)

Buy signal: Buy when the exponential moving average 4 punches through the linear moving average 10 going up and,also confirm with moving average convergence and divergence indicator punching through its zero line.

Sell signal: Sell when the exponential moving average 4 punches through the linear moving average 10 going down, also confirm with the moving average convergence and divergence indicator going below its zero line.

Happy Trading