Category: 3. Advance Tutorials

Trading Rules to Live By

What most professional traders have in common is the discipline to follow some of the basic forex trading rules. Let us now see what these rules are. The rules are listed as follows − Start slow For an amateur trader, it is always better to start slow and with...
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Foreign Exchange Risks

Banks have to face exchange risks because of their activities relating to currency trading, control management of risk on behalf of their clients and risks of their own balance sheet and operations. We can classify these risks into four different categories − Exchange rate risk Credit risk Liquidity risk...
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Position Sizing & Money Management

An important aspect of forex trading success is taking the correct position size on each trade. A trader position size or trade size is considered more important than your entry or exit point especially in forex day trading. You might have the best trading strategy but if you do...
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The Commodity Connection

The movement of foreign exchange prices is based on multiple factors including demand & supply, economic factors (GDP, CPI, PPI), interest rates, inflation, politics. Since the economic growth and exports of a country are directly related, it is very natural for some currencies to heavily depend on commodity prices....
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The Role of Inflation

Inflation gives very good indication of the current account balance of a country. Inflation measures the rate of change in prices of goods and services over a given period. An increase in inflation indicates prices are quickly rising and if the rate of inflation decreases, the prices of goods...
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Oscillator Divergences

Divergence simply means “separate”. Generally, the price of a security and indicator follow the same path. This is confirmed by the oscillator and traders can expect the trend to continue. There comes a point when the path of the oscillator and price divert from each other. At this point,...
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Technical Strategy in Price Patterns

Technical analysis is based on the assumption that security (e.g. currency pair) prices move in trends. In addition, trends do not last forever. They eventually change direction from one trend to another. Typically, prices move randomly from decelerate, pause and then reverse. This change in phases (trends) occurs as...
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Pattern Study of Trends, Support and Resistance

In technical analysis, support and resistance represent the critical point where the forces of supply and demand meet. The other key points of TA, such as price patterns, are based on support and resistance points. A support line refers to that level beyond which a stock (or currency pair)...
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Technical Indicators

What is a chart? Charts are the main tools of technical analysis. In technical analysis, we use charts to plot a sequence of prices (price movements) of an asset over a certain duration. It is a graphical way of showing how the stock prices have performed in the past....
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Fundamental Market Forces

Any news and information regarding the country’s economy can have a direct impact on the direction the country’s currency is heading towards; just as how the current events and financial news affect the stock prices. Several factors prove helpful in building long-term strength or weakness of the major currencies...
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