March 16, 2011

Portfolio Prophet Review - Portfolio Prophet is an ETF trading course

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Portfolio Prophet is an ETF trading course. I happened to have insider access to the course.

I have posted my Portfolio Prophet review. The post contains details around -

1. What to expect from Portfolio Prophet

2. Is the course right for you.

3. What does Portfolio Prophet course made of? I mean what all does it include?

4. What is good about the course and what may be missing?

Click on the link to read my Review of Portfolio Prophet

Filed under Forex Trading by Rahul

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February 28, 2011

Forex Chart Analysis - An example of EUR/USD trade

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Some of you my subscribers have asked me an example of how to analyse the forex charts correctly.

When you are analysing chart from a trade perspective, you must look from 2-3 important aspects

1. Where is a good point to Enter the market

2. From the entry point, what is the immediate price point you see the
currency pair reaching, that can be your immediate exit point

3. Where should you place your stop loss

Once you have these three pieces identified, what left is just placing the trade.

Let us take a look at an example -

In the chart above, we are looking at EUR/USD 1 hr chart

1. As you can see market is in a bullish trend.
2. The market, in the trend, retraces and forms a low at Red Elipse (A)
3. It then resumes the uptrend again followed by again a retracement.

If you look at 2nd retracement, the elipse B, it is formed at 38.2% Fib level. Also, this point is also forms a double bottom since the low at Elipse A
is also at the same level.

So, definitely, this looks to be a strong support area.

So, the probability of market bouncing off from this support area is very high.

So, in elipse B, The 1st candle (red breaches the 38.2 level, but the next candle (Blue candle) pulls back and shows that the retracement level holds good.

What this level of analysis done, let us look at the 3 aspects we covered at the beginning of this post -

1. The entry point for the Forex Trade- Ofcourse it is when the market bounces off from 38.2 fib level. But the entry should only be done when it is confirmed that currency pair has bounced off..which is at the CLOSE of Blue Candle

2. The immediate target - The level C as shown by a green line. This is the immediate target. If currency pair still shows enough strength, then continue to keep the trade open

3. The stop loss - Could have been placed below 50% fib level. A more conservative approach could have been to have it below the 61.8 level. But that wouldn't have been
good from Risk Reward ratio perspective

See folks, you don't have to use any complex systems to analyse the market. All you need is 2-3 good forex indicators.

In the above analysis, we just used Support/Resistance lines (Fibonacci levels and double bottom/top levels) and Candlestick.

Ideally I would have recommended you to use another confirming indicatort like RSI/MACD etc. But, to keep things easy to understand, I just included S/R and
Candlesticks.

Let me know your comments about this post

Oh, by the way, if you are interested in learning Forex Candlesticks to become even better trader, then check out -

Forex Candlestick Magic

Filed under free forex trading strategy, forex technical analysis, Forex Trading by Rahul

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November 29, 2010

Analysis of GBP/USD Currency pair - Where is GBP/USD heading?

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It is a beginning of a new week after thanksgiving and I was just looking at the GBP/USD charts.

As you know that the USD is just becoming strong and having a good rally against all the major currencies.

From the fundamental analysis perspective, it is because of multiple factors like -

Better Job market and economy
Better housing market
and ofcourse, pretty week outlook for Euro nations.

Now if you look from technical perspective, it makes sense as well.

Take a look at daily GBP/USD chart -

1. The bullish run for GBP/USD started way back in May-2010 forming 1t elliott wave
2. The market reversed temporarily in Aug-2010 and made the 2nd Elliott wave
3. The 3rd elliott wave started in Sep-2010
4. 4th elliott wave, which is a pull back started in Oct-2010
5. And finaly the 5th and final elliott wave started in Nov-2010.

It is observed that in 85-90% of cases, the market reverses significantly as soon as the 5th elliott wave is formed.

So, as you can see in the chart, the GBP/USD reversed and is having significant bearish run where in it broke the low created by the 4th elliott wave which is a kind of indication that the previous elliott wave pattern has ended.

Now, the next obvious question is -

"Where will the market find support and then reverse"?

As per me, the currency pair is supposed to get a good support at 1.5400 which is

1. The low created by 2nd elliott wave
2. Ands is also the 50% fibonacci retracement level created by May-2010 to Oct-2010 rally
3. The high created in apr-2010
4. And also, it is the 00 level..

So, this looks to be a good support area.

So, if you are having an open trade, keep a watch for 1.5400 level to exit trade or open a new trade once the market bounces from this.

Feel free to post your comments or bookmark this post or share with your friends on facebook or twitter

.

Filed under forex technical analysis, Online Forex trading, Forex Trading by Rahul

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October 4, 2010

Forex Scalping - 2 serious mistakes in Forex Scalping!

Forex Scalping is one of the very lucrative forms of trading! It is primarily because in scalping you can -

1. have very quick profits..sometimes just in a matter of 2 minutes.
2. Multiple opportunities each day
3. Trade any currency on any timeframe

Needless to say, huge population of Traders is into scalping. Yet, only handful of traders end up making pips by scalping.

Rest of the folks, struggle even though Scalping is fairly straightforward to do.

Why?

Because of 2 serious mistakes that are made by them.

But to be fair to them, it is not their fault!
(I'll tell you in a minute why did I say so)

But 1st, let us look at these mistakes -

1. Poor Trade Management guidelines - Most of the traders carry the misconception that in trading you need to risk 5-10 times of what your profit target is.
So, they'll target to make 10-15 pips per trade by risking 50, 75 pips or even 100 pips per trade.

SUCH FOREX SCALPING STRATEGY CAN NEVER BE SUCCESSFULL!!

But to be fair, this is not a fault of traders.

This mistake is because that is what is told to the traders by all these faulty scalping systems out there!!

Per my opinion, in forex scalping, you should NEVER RISK more than what you intend to earn from that trade!

2. Incorrect Entry and Exit guidelines - In Scalping, you should never have any ambigous guidelines for entring and exiting the trade!

You need to be quick and you need to enter the trade as soon as the conditions are ideal. The same goes for exiting the trade also.

So naturally, the entry and exit criteria need to be precise to a pip to have high number of profitable trades.

That is where most of the other forex scalping system fail. They target to have 5 pips profit per trade by putting 100 pip stop loss. Because when you use such criteria, you can have fuzzy entry and exit guidelines!

So, needless to say, Forex Scalping is very lucrative but requires strong trading guidelines. Like it should have -

1. Precise entry and exit criteria
2. Strong money management principles
3. and can allow traders to make full time income by scalping.

Let me know your comments on this post. And it will be so nice of you if you can share this article with your friends on facebook or twitter

Filed under forex Scalping by Rahul

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October 3, 2010

1 mistake that can make you struggle in forex market

Over last few weeks, I received few questions/comments from a lot of subscribers asking me where are they making mistake since most of their trades are ending in loss!
When I did some analysis, I found 1 common mistake most of the traders make.

And this is a mistake which is commited at the fundamentals and so a trader making this error can never have profitable trades.

Here it is -

"The biggest mistake is to adapt your trading style as per trading strategy"

Yes! By this what I mean is that most of the times the traders come across a trading system and then make changes in their trading behaviour to use that system.

For example, if a trader who trades on 4 hr charts, who has only few hrs a day to trade, gets access to a day trading system, his/her whole trading routine will undergo deep changes if he uses this day trading system.

S/he'll have to have quick reflexes, monitior charts at more frequency, be ready to close the trades at lower profit targets.

Each trading style is very different from one another!!

When I look at forex market, there are 3 prominent trading style that emerge -

1. Swing Trading - Trading on higher timeframes like 1 hr or higher
2. Day Trading - Trading on a 15 min or 30 min or even 5 min chart!
3. Saclping - A variation of Day trading which focuses on quick profits one after another

So as you can see all these trading styles are very different!

So, you need to 1st understand what kind of trader are you and once you figure that out, then select an appropriate trading strategy!

Let me know your comments on this post.

Also if you find it useful, can you share it with your friends on facebook or twitter?

Filed under forex fundamentals, Forex Trading by Rahul

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