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August 22 2013

Q&A: Do I buy or sell when the candlesticks go down alot?

forex broker

Question: Do I buy or sell when the candlesticks go down alot?

Im new to Forex and Im still not sure on what way to buy and sell. Do you buy when the candlestick chart goes up?

www.goldsenze.com Answer:

Forex trading is personality bound which makes it difficult for someone to figure out what works for you. You’ll have to start studying the most popular technical indicators and find out which setup works for you. Some traders are successful with for example a “moving average-candle patterns-oscillator” configuration, others fail with the very same setup.
So you need to work at it in making a trading plan that is consistent and that you can use over and over again.
You could do a course but then again there’s no guarantee of success exactly because someone else’s’ trading plan is not always “transferable”.
You need to feel comfortable with certain technical indicators and the most popular ones are the following (in random order):

- Moving averages
- Bollinger Bands
- RSI
- Stochastics
- Fibonacci
- Candle patterns
- CCI
- MACD

These indicators are all you need to find your personal setup. You do not need to use all of them, 2 or 3 is enough. Some traders use RSI with Boll. bands and an oscillator, other only exponential moving averages and candle patterns, …etc.

Keep in mind, however, that price is the ultimate indicator. Technical indicators are merely tools to help you guide through the waves of the market, in other words, how price is currently behaving. You therefore need to establish whether price is ranging or trending up or down). Once established how price is moving , the next step would be applying the indicators.

One more tip, the larger the time frame the more reliable signals are. A buy signal on a daily chart is more reliable than on a 5 minute chart because a daily chart holds much more market information. This doesn’t necessarily mean you can’t trade with 5 minute or other short term timeframes, it means you need a larger timeframe to back up your trading decisions on the 5 minute.

Words of wisdom:

- Always start with a free practice account
- The Forex market is not a get-rich-quick opportunity
- Beware of fear and greed, you HAVE TO be relaxed
- What you see on the charts is the absolute truth, so believe what you see. If the charts don’t make sense then you are absolutely right. Wait for the market to be less confusing.
- Patience is a virtue.
- Losses are part of the game, with a solid trading plan there’s no need to fear a loss once in a while, because the confidence you have in yourself and the trading method let you know the next trades will be winners.
- Always limit your losses, either with a automated stoploss or a mental stoploss.

Websites:

www.babypips.com
www.investopedia.com
www.forexfactory.com
www.fxcm.com

the better brokers:

FXCM, FXSOL, ACM, DBFX, Saxobank, MGForex

Success and always think positive…

Some brokers are extremely popular people to their clients, but there are those that are not. Brokers may work for insurance companies, real state, and even …

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