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Basic Guidelines for Using Volume
When analyzing volume, there are usually guidelines used to determine the strength or weakness of a move. As traders, we are more inclined to join strong moves and take no part in moves that show weakness?or we may even watch for an entry in the opposite direction of a weak move.

These guidelines do not hold true in all situations, but they offer general guidance for trading decisions.

1. Trend Confirmation
A rising market should see rising volume. Buyers require increasing numbers and increasing enthusiasm to keep pushing prices higher. Increasing price and decreasing volume might suggest a lack of interest, and this is a warning of a potential reversal. This can be hard to wrap your mind around, but the simple fact is that a price drop (or rise) on little volume is not a strong signal. A price drop (or rise) on large volume is a stronger signal that something in the stock has fundamentally changed.

2. Exhaustion Moves and Volume
In a rising or falling market, we can see exhaustion moves. These are generally sharp moves in price combined with a sharp increase in volume, which signals the potential end of a trend. Participants who waited and are afraid of missing more of the move pile in at market tops, exhausting the number of buyers.

At a market bottom, falling prices eventually force out large numbers of traders, resulting in volatility and increased volume. We will see a decrease in volume after the spike in these situations, but how volume continues to play out over the next days, weeks, and months can be analyzed by using the other volume guidelines.

3. Bullish Signs
Volume can be useful in identifying bullish signs. For example, imagine volume increases on a price decline and then the price moves higher, followed by a move back lower. If, on the move back lower, the price doesn?t fall below the previous low, and if the volume is diminished on the second decline, then this is usually interpreted as a bullish sign.

4. Volume and Price Reversals
After a long price move higher or lower, if the price begins to range with little price movement and heavy volume, then this might indicate that a reversal is underway, and prices will change direction.3

5. Volume and Breakouts vs. False Breakouts
On the initial breakout from a range or other chart pattern, a rise in volume indicates strength in the move. Little change in volume or declining volume on a breakout indicates a lack of interest and a higher probability for a false breakout.

6. Volume History
Volume should be looked at relative to recent history. Comparing volume today to volume 50 years ago might provide irrelevant data. The more recent the data sets, the more relevant they are likely to be.

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#106 - June 15, 2022, 09:06:44 AM

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A bull market is the condition of a financial market in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.

Because prices of securities rise and fall essentially continuously during trading, the term "bull market" is typically reserved for extended periods in which a large portion of security prices are rising. Bull markets tend to last for months or even years.

  • A bull market is a period of time in financial markets when the price of an asset or security rises continuously.
  • The commonly accepted definition of a bull market is when stock prices rise by 20% after two declines of 20% each.
  • Traders employ a variety of strategies, such as increased buy and hold and retracement, to profit off bull markets.

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Understanding Bull Markets
Bull markets are characterized by optimism, investor confidence, and expectations that strong results should continue for an extended period of time. It is difficult to predict consistently when the trends in the market might change. Part of the difficulty is that psychological effects and speculation may sometimes play a large role in the markets.

There is no specific and universal metric used to identify a bull market. Nonetheless, perhaps the most common definition of a bull market is a situation in which stock prices rise by 20%, usually after a drop of 20% and before a second 20% decline. Since bull markets are difficult to predict, analysts can typically only recognize this phenomenon after it has happened. A notable bull market in recent history was the period between 2003 and 2007. During this time, the S&P 500 increased by a significant margin after a previous decline; as the 2008 financial crisis took effect, major declines occurred again after the bull market run.

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#107 - June 16, 2022, 08:19:42 AM

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USD CAD, the pair may grow.
On the daily chart, the first wave of the higher level (1) of 5 forms, within which the wave 3 of (1) develops. Now, the third wave of the lower level iii of 3 is forming, within which the wave (i) of iii has formed, a local correction has developed as the wave (ii) of iii, and the wave (iii) of iii is forming.

If the assumption is correct, the USD CAD pair will grow to the levels of 1.341 ? 1.37. In this scenario, critical stop loss level is 1.2507.

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#108 - June 16, 2022, 08:31:58 AM

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Whether you?re a casual trader or experienced investor, Solid ECN offers an extensive range of account options. Through our true ECN accounts, we?re able to deliver spreads from 0 pips and millisecond execution against best bid / ask prices?all with world-class customer service.


Min Deposit
Max Leverage
Min Spread
Fee
Micro
$5
1:1000
2 pips
No
Standard
$10
1:1000
0.3 pips
No
Swap Free
$10
1:1000
0.3 pips
No
ECN
$10
1:1000
0
$3

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#109 - June 17, 2022, 06:52:15 AM

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#110 - June 19, 2022, 07:55:30 AM

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Forex, short for foreign exchange, refers to the trading of one currency for another. It is also known as FX.

> Forex markets are the largest in terms of daily trading volume in the world and therefore offer the most liquidity. This makes it easy to enter and exit a position in any of the major currencies within a fraction of a second for a small spread in most market conditions.

> The forex market is traded 24 hours a day, five and a half days a week?starting each day in Australia and ending in New York. The broad time horizon and coverage offer traders several opportunities to make profits or cover losses. The major forex market centers are Frankfurt, Hong Kong, London, New York, Paris, Singapore, Sydney, Tokyo, and Zurich.

> The extensive use of leverage in forex trading means that you can start with little capital and multiply your profits.

> Automation of forex markets lends itself well to rapid execution of trading strategies.

> Forex trading generally follows the same rules as regular trading and requires much less initial capital; therefore, it is easier to start trading forex compared to stocks.

> The forex market is more decentralized than traditional stock or bond markets. There is no centralized exchange that dominates currency trade operations, and the potential for manipulation?through insider information about a company or stock?is lower.

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#111 - June 20, 2022, 06:17:56 AM

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The price at which the market is prepared to sell a product. Prices are quoted two-way as Bid/Ask. The Ask price is also known as the Offer.

In FX trading, the Ask represents the price at which a trader can buy the base currency, shown to the left in a currency pair. For example, in the quote USD CHF 1.4527/32, the base currency is USD, and the Ask price is 1.4532, meaning you can buy one US dollar for 1.4532 Swiss francs.

In CFD trading, the Ask also represents the price at which a trader can buy the product. For example, in the quote for UK OIL 111.13/111.16, the product quoted is UK OIL and the Ask price is ?111.16 for one unit of the underlying market.

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#112 - June 21, 2022, 07:07:30 AM

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The most basic forms of forex trades are a long trade and a short trade. In a long trade, the trader is betting that the currency price will increase in the future and they can profit from it. A short trade consists of a bet that the currency pair?s price will decrease in the future. Traders can also use trading strategies based on technical analysis, such as breakout and moving average, to fine-tune their approach to trading.

Depending on the duration and numbers for trading, trading strategies can be categorized into four further types:

A scalp trade consists of positions held for seconds or minutes at most, and the profit amounts are restricted in terms of the number of pips. Such trades are supposed to be cumulative, meaning that small profits made in each individual trade add up to a tidy amount at the end of a day or time period. They rely on the predictability of price swings and cannot handle much volatility. Therefore, traders tend to restrict such trades to the most liquid pairs and at the busiest times of trading during the day.

Day trades are short-term trades in which positions are held and liquidated in the same day. The duration of a day trade can be hours or minutes. Day traders require technical analysis skills and knowledge of important technical indicators to maximize their profit gains. Just like scalp trades, day trades rely on incremental gains throughout the day for trading.

In a swing trade, the trader holds the position for a period longer than a day; i.e., they may hold the position for days or weeks. Swing trades can be useful during major announcements by governments or times of economic tumult. Since they have a longer time line, swing trades do not require constant monitoring of the markets throughout the day. In addition to technical analysis, swing traders should be able to gauge economic and political developments and their impact on currency movement.

In a position trade, the trader holds the currency for a long period of time, lasting for as long as months or even years. This type of trade requires more fundamental analysis skills because it provides a reasoned basis for the trade.

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#113 - June 22, 2022, 08:26:38 AM

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Where is Forex Traded?
Forex is traded primarily via three venues: spot markets, forwards markets, and futures markets. The spot market is the largest of all three markets because it is the ?underlying? asset on which forwards and futures markets are based.

Why Do People Trade Currencies?
Companies and traders use forex for two main reasons: speculation and hedging. The former is used by traders to make money off the rise and fall of currency prices, while the latter is used to lock in prices for manufacturing and sales in overseas markets. 

Are Forex Markets Volatile?
Forex markets are among the most liquid markets in the world. Hence, they tend to be less volatile than other markets, such as real estate. The volatility of a particular currency is a function of multiple factors, such as the politics and economics of its country. Therefore, events like economic instability in the form of a payment default or imbalance in trading relationships with another currency can result in significant volatility.

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#114 - June 23, 2022, 07:28:38 AM

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Which Currencies Can I Trade In?
Currencies with high liquidity have a ready market and therefore exhibit smooth and predictable price action in response to external events. The U.S. dollar is the most traded currency in the world. It features in six of the seven currency pairs with the most liquidity in the markets. Currencies with low liquidity, however, cannot be traded in large lot sizes without significant market movement being associated with the price. Such currencies generally belong to developing countries. When they are paired with the currency of a developed country, an exotic pair is formed. For example, a pairing of the U.S. dollar with India?s rupee (USD/INR) is considered an exotic pair.

How Do I Get Started With Forex Trading?
The first step to forex trading is to educate yourself about the market?s operations and terminology. Next, you need to develop a trading strategy based on your finances and risk tolerance. Finally, you should open a brokerage account. Today, it is easier than ever to open and fund a forex account online and begin trading currencies.

The Bottom Line
For traders?especially those with limited funds?day trading or swing trading in small amounts is easier in the forex market than in other markets. For those with longer-term horizons and larger funds, long-term fundamentals-based trading or a carry trade can be profitable. A focus on understanding the macroeconomic fundamentals that drive currency values, as well as experience with technical analysis, may help new forex traders to become more profitable.

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#115 - June 24, 2022, 07:10:41 AM

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Charts Used in Forex Trading

Three types of charts are used in forex trading. They are:

Line Charts
Line charts are used to identify big-picture trends for a currency. They are the most basic and common type of chart used by forex traders. They display the closing trading price for the currency for the time periods specified by the user. The trend lines identified in a line chart can be used to devise trading strategies. For example, you can use the information contained in a trend line to identify breakouts or a change in trend for rising or declining prices.

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While it can be useful, a line chart is generally used as a starting point for further trading analysis.

Bar Charts
Much like other instances in which they are used, bar charts are used to represent specific time periods for trading. They provide more price information than line charts. Each bar chart represents one day of trading and contains the opening price, highest price, lowest price, and closing price (OHLC) for a trade. A dash on the left is the day?s opening price, and a similar dash on the right represents the closing price. Colors are sometimes used to indicate price movement, with green or white used for periods of rising prices and red or black for a period during which prices declined.

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Bar charts for currency trading help traders identify whether it is a buyer?s market or a seller?s market.

Candlestick Charts
Candlestick charts were first used by Japanese rice traders in the 18th century. They are visually more appealing and easier to read than the chart types described above. The upper portion of a candle is used for the opening price and highest price point used by a currency, and the lower portion of a candle is used to indicate the closing price and lowest price point. A down candle represents a period of declining prices and is shaded red or black, while an up candle is a period of increasing prices and is shaded green or white.

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The formations and shapes in candlestick charts are used to identify market direction and movement. Some of the more common formations for candlestick charts are hanging man and shooting star.

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#116 - Today at 10:20:46 AM

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