How to Trade Forex in Volatile Conditions - TheStreet
How to Trade Forex in Volatile Conditions - TheStreet |
- How to Trade Forex in Volatile Conditions - TheStreet
- The S&P 500 continues to struggle ahead of the 38.2% retracement - ForexLive
- US Dollar Index, EUR/USD Charts & More - DailyFX
- How to Trade Forex Binary Options in 2020 • Benzinga - Benzinga
| How to Trade Forex in Volatile Conditions - TheStreet Posted: 12 Mar 2020 12:00 AM PDT Forex is the perfect market for volatile conditions. There are no circuit breakers, and you can go long and short with ease. The stock and futures markets have daily caps on how much they can move. If you have a position when they get halted, you are at the mercy of where they reopen. With forex, you also have leverage and a 24-hour market. In volatile conditions, you can trade any hour of the day between Sunday and Friday. Trading in volatility currencies presents huge opportunities, but it also requires adaptability. Newer traders have likely never seen the price moves that are being seen as a result of the coronavirus and stock market(s) meltdown in March of 2020. In such an environment, my strategies don't change, but I do a few things differently and I also keep a few thoughts in my mind so that I can trade efficiently, capitalize on the big moves, and keep risk small. Things to Remember for Trading Volatile Forex PairsBelow is a list of a few of the things I do and keep in mind while trading in crazy times. Use a higher time frame to find trades, and a very low time frame to find entries and place stop losses.Under normal conditions, I will often use the daily or 4-hour chart to find trade setups. I will then drop to the hourly or 15-minute to find my entries and stop loss locations. In volatile conditions, I will usually start with the hourly (4-hour or daily is fine too). I look for the price near support or resistance or another important technical level. Preferably it is consolidating on the hourly chart near that level. I then drop down to the 5-minute and find a consolidation there, which is closest to the technical level. The two charts below exemplify.   If the price breaks lower from the consolidation, and a stop loss is placed just above it, the hourly consolidation means risking 50 pips, while the 5-minute chart risks only 15. The smaller risk means a bigger reward:risk whether the price moves 30, 50, 100 or 200 pips in your favor after entry. There are a few reasons for doing this.
I have no idea how far prices may run. Use a trailing stop loss.A couple weeks ago the EURUSD was moving 50 pips per day. As of March 12, 2020, the average is 150 pips per day. Some other pairs are moving 200 or more pips a day. Over the course of a week, a trend can run for far longer than I could reasonably anticipate. For that reason, I don't think about profit targets much. Rather I use a trailing stop loss. I like Renko charts. I will build them to capture the bulk of a move. This means setting up each pair with specific Renko parameters. One setting will not work for all pairs. I exit when the Renko reverses. ATR stops, or using any type of Average True Range (ATR) multiple can work well. When the price reverses more than 1.5x ATR for example, exit the trade. This is based on the longer time frame! If you are taking a trade that looks good on the hourly, use the hourly for taking profit. The 5-minute is only used to find an entry with small risk. Exit on "extreme" price moves.If the price moves way more than I ever even dreamed possible, I usually just close it out or trail in my trailing stop very close. If your optimistic view was that maybe the pair would move 100 pips, and it just moved 300 pips in 5 minutes, close it out. Chances are, if you are licking your chops, so is everyone else and the move is close to over. I am not talking about sustained moves. I am talking about moves that happen in seconds or minutes. Moves that produce a big amount of money to you. If you see a massive spike/drop on the chart, close it out. The market gave a gift. Don't let it take it away. This is why trailings stop losses are nice, because typically they will get you out with most of that profit intact. The market is not volatile every minute or every day.When you make a lot on a few trades one day, it is easy to start thinking trading is easy, and that the next day will be the same. It probably won't. Just because a pair moved 300 pips today doesn't mean it will move 300 pips or more tomorrow. It may, but it may only move 100. We don't know what tomorrow brings, or even the next trade, so trade the strategy and try to limit your expectations. Just take trades as they come, and follow your entry and exit rules. Pick your trades selectively, always. Expect trends and ranges, choppy and clean.One day the price may move in long trends, the next day the price action is choppy and rangey. As discussed above, we can't assume that just because the market is volatile, and we are expecting the price to move in one direction, that it will. Prices will do whatever they want. Our job is not to impose our expectations on them, but rather to trade what is provided using our systems. Watch what the price action is actually doing, and limit expectations for what it should do. Limit biased trading.In volatile markets, I don't assume to know which way the price is going to go. Typically, when the financial markets are in panic mode, money flows into JPY, CHF, and EUR (this time round), but that doesn't mean because the stock market is dropping JPY, CHF, and EUR will rally. Markets are more dynamic than that. Currency pairs can get overbought or oversold, and move the other way in seemingly irrational moves. The point is, we can't know for sure which way the price is going to go. And it doesn't matter. I wait for my trade signals, and I take them, regardless of which direction they point. I am willing to trade in either direction, in volatile conditions, because I know the price move is likely big enough to warrant a profitable trade (assuming the price is making larger moves around the time of the trade). Final World on Trading Forex in Volatile ConditionsTrust your trade signals. Review your strategy before trading each day. Clarify that you will stick to your system, and that the market needs to produce certain criteria in order to get you into a trade. Limit biases and expectations. Trade what the market provides, and trade with it. By Cory Mitchell, CMT. Join me in my free Facebook swing trading group. Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.  |
| The S&P 500 continues to struggle ahead of the 38.2% retracement - ForexLive Posted: 31 Mar 2020 09:56 AM PDT [unable to retrieve full-text content]The S&P 500 continues to struggle ahead of the 38.2% retracement ForexLive  |
| US Dollar Index, EUR/USD Charts & More - DailyFX Posted: 31 Mar 2020 05:30 AM PDT Technical Outlook:The US Dollar index has been swinging around rather violently since the coronavirus gripped financial markets. Unlike stocks, bonds, and economically sensitive commodities there hasn't been a clear sustainable trend. The sharp decline, rally, then sharp decline again since late February has forced traders to make fast trading decisions. That is anticipated to give-way to a sustainable trend, but which way will that be? The broader trend has been upward, and the most powerful portion of those swings was to the upside. Risk is thus skewed at this time towards seeing stabilization that results in a move higher. This may take a little time to work itself out, but soon one way or the other we should have something more concrete to work with.  Recommended by Paul Robinson Find Out the #1 Mistake Traders Make US Dollar Index Daily Chart (swings to settle) US Dollar Index Chart by TradingView EUR/USD is about 57% of the USD index, and as such it is the primary driver. It won't take much more of a downturn to put the Euro back on a trend-line that extends higher from the early 1980s, if you take into consideration the currencies that were folded into the single-currency. Below you can see it back to 2000, which even on its own makes it an impressive long-term threshold. It was briefly breached during the recent sell-off, but held on a monthly basis. It's support until it breaks, but if it does it could send EUR/USD much lower, and conversely the DXY much higher. EUR/USD Monthly Chart (major long-term support) For all the charts we looked at, check out the video above… Resources for Index & Commodity TradersWhether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, and trading guides to help you improve trading performance. We also have a series of guides for those looking to trade specific markets, such as the S&P 500, Dow, DAX, gold, silver, crude oil, and copper. ---Written by Paul Robinson, Market Analyst You can follow Paul on Twitter at @PaulRobinsonFX  |
| How to Trade Forex Binary Options in 2020 • Benzinga - Benzinga Posted: 31 Mar 2020 01:00 PM PDT Benzinga Money is a reader-supported publication. We may earn a commission when you click on links in this article. Learn more. For investors the financial market offers a wide variety of ways to grow your wealth. Foreign exchange, or forex, gives you direct access to trade with international currencies at the click of a button. And trading binary options on the forex market is one of the simplest methods of making money. A binary option lets you predict the price movement of a currency pair over a set period of time. For example, if you are speculating that the European euro (EUR) will rise in value against the U.S. dollar (USD) in the next minute, you can invest in a call option for the EUR/USD currency pair. If you are right, your binary option contract will settle for $100 and you get your money back with an earned profit of $100, minus the price of the contract. And if the bid falls below your strike price, you will lose all of your invested money in 60 seconds. Forex binary options are the epitome of the high risk-high returns proposition. It is an apt investment strategy for active traders who expect fast results in the forex market. Here's what you need to get started. Step 1: Choose an Online Forex BrokerBefore you begin, you need to have an account with a forex platform that allows binary options trading. You can compare different online forex brokers before signing up. Some things to consider in an online forex platform for binary options include minimum deposits, minimum trade value, payout percentage and the number of currency pairs available to trade. Step 2: Pick a Currency PairMost online forex brokers will have a list of at least 80 currency pairs to pick and choose from. Common currency pairs that are traded in the forex market are EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, USD/CAD and NZD/USD. But, just because a currency pair is popular doesn't make it profitable. Making informed investments based on research and statistical data helps you limit the risks involved in the binary options you buy. Step 3: Pick a Binary OptionOnline forex platforms let you pick the type of binary option you want to buy. Depending on your choice, the payout percentage on the binary options will vary accordingly. The most-traded binary options are listed below.
Step 4: Set the Option for a Call or PutOnce you've decided on the type of forex binary option to trade, you can choose to buy a call or a put contract. If you expect the value of the currency pair to rise, buy a call option. And if you expect the value of the currency pair to fall, buy a put option. This does not apply for one touch and no touch binary options. Step 5: Set an ExpiryYou need to set a time duration for the forex binary option to trade. The expiry on a forex binary option contract can be anywhere between 30 seconds to 1 day or even 1 week. Many traders indulge in intraday binary options to make a quick buck. Be careful while following in their footsteps; you could burn your fingers on a binary option just as fast. Step 6: Reap the RewardsUnlike forex trading, binary option contracts are purchased for a fixed rate and a fixed reward. Both the buyer and the seller of the binary option contracts will have to put in their money beforehand. So, you can cash in on your earnings as soon the currency pair hits the strike price. Recommended Forex Binary Options BrokerForeign exchange trading does not have a physical marketplace. You have to open an account with an online forex broker to be able to trade in currency pairs. Since global economic and political news has a drastic impact on forex, you have to explore the full set of analytical tools that an online broker provides with a registered account. Based on crucial factors such as pricing, trade fees, trade execution speed, ease of use and regulations, Benzinga recommends the following online brokers for trading forex binary options.  1. FOREX.comFOREX.com is an industry-leading online broker for foreign exchange trading. It offers tight spreads on over 90 currency pairs. You can open an account on FOREX.com with a minimum deposit of $100 or 100 units of your preferred currency. With it, you can trade forex on desktop, internet browsers or on its mobile application. It has an impressive average execution speed of 0.05 seconds per trade. FOREX.com provides powerful market analysis tools such as the economic calendar, advanced charting, pivot points and daily updates from current events and geopolitical news. It is regulated by the Cayman Islands Monetary Authority. For more information, you can read our full FOREX.com review.  2. IGFounded in 1974, IG is the preferred online forex broker for over 178,000 traders worldwide. You can open an account on IG with a $0 minimum deposit. You can also open a demo account to practice forex trading with limited risks. The demo account provides you with AUD $20,000 in virtual funds to help you try your hand at forex trading without any capital investment. IG offers over 80 currency pairs to trade with. IG's proprietary technology ProRealTime allows you to filter binary options by strike price and expiration date. It has a round-the-clock customer support facility to answer any queries you have. It is regulated by the Commodities Futures Trading Commission and is a member of the National Futures Association.  3. TD AmeritradeTD Ameritrade is a commission-free online forex trading platform. You can open an account on TD Ameritrade with $0 minimum deposit. It offers over 70 currency pairs to trade with. The paperMoney tool helps you experiment with new forex trading strategies without risking your own money. TD Ameritrade's thinkorswim platform gives you access to professional-grade tech tools to heighten your forex trading experience. With this integrated platform, you gain access to global forex charting packages, currency trading maps and real-time breaking news from CNBC International. TD Ameritrade is regulated by FINRA. Sink or SwimTrading forex binary options can feel a bit like cliff diving. When you hit the waters, you either sink or you swim, and for forex beginners that thrill can be all the more alluring. Similarly, when the contract expires on your forex binary options, it can either settle at $0 or $100. Your hard-earned money is either going to go in or swim out of your pocket, so you should consider this forex trading strategy only if you have a high-risk tolerance. Find Professional Financial Advisors Near YouDo you have 5 minutes to connect with financial advisors in your area? SmartAsset is equipped to match you with local advisors that can help you with all of your financial needs. The candidates have been thoroughly vetted by SmartAsset so you can rest assured that you're working with the best, with your best interest in mind. Get started now for your perfect match.  |
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