Leverage Can Be Your Best Friend and Your Worst Enemy!
I recently received an email from a new trader who found himself in a losing trade and didn’t know what to do. He had a standard account with a balance of $2000 and sold 10 lots of a currency pair...
View ArticleLook Before You Leap Into a Trade
After closing out a losing trade, it is human nature to want to get right back into another trade to get that money back. However, this is when many new traders can get themselves into trouble. One of...
View ArticleSometimes the Best Trade is No Trade at All
There are many differences between new traders and professional traders. But many of them have little to do with their expertise of the markets and more to do with their own actions. As a DailyFX...
View ArticleBe Careful What You Ask For….You Just Might Get It
When we start one of our DailyFX Trading Courses, we ask new students to introduce themselves and let us know a little bit about their trading interests. If you take their explanations at face value,...
View ArticleThe Trader’s Approach
As new traders come into our DailyFX Trading Course, one of the big questions we are asked is what to do first when looking for a trade. Typically we see new traders open up a short-term chart like the...
View ArticleStop Placement with Average True Range (ATR)
When working with new traders in the DailyFX Trading Course, we try to impress upon them the importance of using a protective stop in every trade. Identifying and limiting your risk are keys to long...
View ArticleBuy the Strongest, Sell the Weakest
One of the best technical tools we can use in our analysis is the strength or weakness of other currency pairs. If you are of the opinion that because of fundamental reasons the Australian Dollar will...
View ArticleWhat Do They Mean by Overbought and Oversold?
Many times in trading we hear the terms overbought and oversold. We hear an analyst state that the AUD/USD is overbought and due for a correction or that the USD/CAD is oversold and due for a bounce....
View ArticleNever Trade Without a Protective Stop
After having identified your entry on a new trade, the next step should always be to identify the price level for your protective stop. The difference between the entry and the protective stop is your...
View ArticleStops and Limits
The placement of stops and limits is a critical component to successful trading. Stops are put on a trade to take a trader out of a trade at a predetermined point at a worse price than the current...
View ArticleSupport and Resistance
Support and Resistance is the most important thing Technical Analysis. Let’s start out our discussion by looking at a chart. As you can see on the chart above, Support is a price level below which a...
View ArticleNon-Farm Payrolls and Trading News Events
Every trader knows (or should know) the impact of economic numbers on the market. Economists gather and announce their estimates on what the numbers should be to the press. If the estimates are in-line...
View ArticleTrade Flows and Capital Flows
Trade Balance The Trade Balance figure is a measure of net exports minus net imports. This has tended to be negative in the US in recent years as the US has primarily been a “consuming” nation. A...
View ArticleReading a Forex Quote
Quoting Convention Quotes in the currency market can be a bit confusing because any position you take in the market is actually two different positions. In FX you’ll see currencies listed in Pairs....
View ArticleTrading with Candle Formations
Candle formations can be a valuable addition to a trader’s approach to trading, but only if used correctly. Like technical indicators, these formations were only designed to help a trader better time...
View ArticleKeeping a Trading Log to Analyze Your Trading Decisions
One of the most powerful pieces of information you can use to evaluate your actions as a trader is a trading log. With each trade, you should keep track of your thoughts and actions so you can improve...
View ArticleIdentifying a Trade Setup
A solid buying opportunity can be a pullback down to support while the market is in an uptrend, which is what we see here on this daily chart of the USD/CHF. We can see where the market moved up...
View ArticleLearn to Walk Before You Try to Run
Trading the financial markets is one of the most competitive fields in existence today. I recently received an email from a DailyFX Course graduate who was doing all the things necessary to become a...
View ArticleGet Smaller or Get Out
Many times I get asked by new traders how to handle a certain situation they find themselves in when trading. These traders may have opened five or six lots in a trade and have seen the market move in...
View ArticleBuying When We Should Have Been Selling
Occasionally (hopefully not more than once) we accidentally find ourselves on the wrong side of a trade. We meant to sell, but instead we bought. After the few seconds of panic, we are left with a...
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