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Articles by Muhammad Azeem

February 25th, 2019 @ 6:11 pm by Muhammad Azeem

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Finding the perfect trade with a high risk-reward ratio

When you will be trading in the market (it can be anyone), it will have to be suitable for the signals. It will decide whether you should get some profits or losses from the trades. That will require you to do some proper level of research on the signals. There will be a lot more statistics for the right selection of the trades. The traders will have to have some idea about the running time period of different markets. Then there will have to be some proper knowledge about the right analogy of the markets. With the Fibonacci retraction tool, the traders can manage some proper signals to trades with. That may seem a little bit difficult at the beginning of the trading business. With some proper dedications and concentration, the traders can learn about everything. We are going to talk about the necessary fundamental you will need to concentrate on for currency trading business of Forex.

Novice traders will not have proper control of their trades

From the beginning to the end of all of the trades, you will have to get proper control of everything. There will have to be good management of the trades with that. If any time the trends change in an improper way, the traders will have to close that. Well, there are tools for the right closing of the trades. That will depend on the right risk to profit margins. The traders will have to think about a decent profit target to get into the trades. From that, you will try to find the right signals to trade with. It will have to be strict for the safety of your trading business. When you will be able to make the right setup of the stop-loss and take-profit for the trade, the control will be strong over your trades. They are basically the limit for closing your trades. With proper market analysis, the traders can easily manage some good trades.

Using the daily time frame

You can’t make any real progress unless you learn to trade the higher time frame.  The higher timeframe always generates maximum profits for traders. If you ask the elite traders of the reputed Forex broker, you will be surprised to see the majority of them are position traders. Ignore the lower time frame trade setup and try to focus on the higher time frame data.

You will have to aim for a solid profit target all the time

What we mentioned in the last segment will be good for a decent performance. Your approaches to the trades can be effective. Then the right management of the trades will also be possible. But one thing you will have to have some concern about. We are talking about working with a profit target. It will be working for your trades as a reference. Using the targets, the traders can easily manage some proper trades in the markets. This is because the signals analysis will be done for satisfying the requirements for the trades. One more thing to remember is that the traders will have to maintain the right choice over the profit margins. If you think with too much greed and aim for a big profit, the system of trading can be difficult for you to handle. So, be the right guy for the right management of the trading business.

The right analysis is necessary for all of the proper executions

For the right selection of the signals, the traders will have to do the right analysis of the market. There are a lot of things you will have to do for that. Proper trend and key swing analysis will be good for all of the trades. Then the right usage of the support and resistance zones can help  traders a lot too. Make the right plan for it and then go for a trade.

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February 25th, 2019 @ 6:09 pm by Muhammad Azeem

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Think of Forex as if it is a day job for you

If you can think of the platform we mentioned in the title, there will be a good performance. This is because the trading process needs proper concentration on the plans. Then the traders will also need you to make the right executions of the trades. In the process of a trading execution, traders will have to think mostly about saving. It is necessary for the traders to make the right management to the trades. Because of the proper control of the risk per trades, the traders will be able to get rid of the tension. So, the losing trades will come very less for your business. Then the traders will also have to control their trades with risk to profit margins. It will help the traders with good control of the stop-losses and take-profits. All of the processes will be good when you can concentrate on them properly. That is why the motto of this article. If you can think of the trading business as being a job for you, there will be a good performance. Because the traders will perform their work like a sort of duty.

The business process has to be effective

All of the trading processes will have to be good for making proper executions. There are no rules of it being a profitable business. What we are trying to say is that the traders will not have to win all the time. There can be losing trades from the account. But you will have to control the losses in them. That way, the trading process will be losing less capital from your account. With some proper plans and cautions, the traders will be able to make their business superior like that. So, think of the right profit margin. Then do the proper market analysis for the signals. Work with technical studies and fundamental information about the markets. Then be a strict trader and find a signal for your trades. Then try to close the trades at the right positions. That will be good with proper management with stop-losses and take-profits.

Learning to trade with rational logic

According to recent statistics, more than 90% of retail traders are losing money on regular basis. If you do some research, you will understand options trading is one of the most difficult tasks in the world. You need to control your emotions and place a trade with managed risk. Always remember, emotions have no place in the investment industry. Focus on your trading skills and try to place a trade with rational logic.

Proper management of the risk is necessary

Besides the trades, the traders will also have to concentrate on risk management. It is necessary for the right performance in the business. We have already stated in the introduction of this article that, the trading business is much more tensed for the traders. When the volatility is much more uncertain than any other platforms, there will be losing trades. This thought only makes the traders a lot more worried for to do business. This is not good for proper planning for the trades. If you want to maintain consistent performance with the trades, there will have to be good management. That will have to be with the risk per trades. As the tension will come mostly from the investment, the traders will have to reduce that to do proper business.

You will have to make the right planning

All the things in the trading process will have to be planned. From the right management of the risks, then the good control of the position sizing, even the right management of the risk to profit margin will have to b planned. This way, the traders will be able to save a significant amount of time. That is good for proper placement of the trades. Even the way of doing the market analysis must be planned by the traders.

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February 18th, 2019 @ 5:24 am by Muhammad Azeem

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To a newcomer, Forex trading may seem chaotic and unreasonable. There’s a reason that it is often compared to a casino. However, this is far from the truth — Forex market is actually predictable and there are methods to forecast the situation on it.

For a long time, any research into market patterns was kept private and the general public had no notion for it. But in 2005, users of the ForexFactory forum got together and started a new form of Forex technical analysis — one that is reliable, approachable and usable. They call it Price Action, and with this article, you will learn its basic points.

What is Price Action

Price Action doctrine states, that there are market movements that will lead to a pre-defined market situation in the future. The followers of this Forex trading strategy differentiate two types of movements: candlestick patterns and chart patterns.

Candlestick patterns are built around price movements confined to a single candlestick. They are very short-term — they only affect the next candlestick or two. If you want to predict a market situation dozens of candlesticks away, you need to look into chart patterns.

Chart patterns are more global and use the key market levels instead of singular candlesticks. They are used to predict market situations for longer periods of time on the market.

The key market levels are support and resistance. Support shows the minimal stable price of an asset, while the resistance shows the maximum one. Both values are dynamic and tend to change.

How Many Price Action Patterns Are There

If you check the original thread on ForexFactory, you’d find hundreds of patterns described both by James16 and his followers. However, there is no need to know all of them, since the majority of those patterns are extremely rare.

In order to start making a profit on Forex, you need to know:

  • 5 candlestick patterns: Pin Bar, Inside Bar, Outside Bar, Fake Breakout, Double High/Double Low;
    • Pin Bar is a candlestick pattern with a small body and one shadow longer than the other. It indicates a change of trends, for example, a beginning of a descending trend after the ascension;
    • Inside Bar is a smaller candlestick opposite to a previous, larger candlestick. It indicates a temporary resistance to the larger trend and acts as a good market entry point;
    • Outside Bar is a larger candlestick opposite to a previous, smaller candlestick. It is another sign for a change of trends, but less certain than a Pin Bar;
    • Fake Breakout happens when a candlestick goes beyond a support or resistance level, but only with its wick. It indicates a turn of the trend;
    • DoubleHigh/DoubleLow is formed by two candlesticks next to each other that can’t break through some abstract level. It represents a strong resistance of that level and serves as a good market entry point;
  • 2 chart patterns: Triangle and Flag;
    • Triangles are represented by a seeming crossing of support and resistance trends. If the support trend ascends to the resistance, the market will soon become bullish. If the resistance trend descends to support, the market will soon become bearish. If the triangle is symmetric, or if the trends are moving away from each other, the market is unstable and you should pull out.
    • Flags are chart patterns with support and resistance levels running parallel to each other. They are correction patterns and tend to break out in an opposite direction to their movement. So, for example, an ascending flag is a sign for a bearish market.

There are many other patterns, but these are more than enough to start trading successfully. In order to do so:

  1. Sign Up with a Forex broker, i.e., JustForex broker;
  2. Create a practice account and hone your strategy with virtual currency;
  3. Deposit real money once you are ready and make profit!

Following the rules above you’re likely to predict the price movement in Forex market.

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December 10th, 2018 @ 5:32 pm by Muhammad Azeem

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Forex Sentiment Analysis

When trading within the forex market, there are three key methods of analysis which can be used to identify possible trends and ultimately decide our positions within the market. These are, fundamental analysis, technical analysis, and sentiment analysis. Of these methods, the most nuanced and challenging to interpret is sentiment analysis. In the fast-paced world of online trading, it is of key importance to understand both the key sentiment indicators and how to react to them appropriately when trading forex.

What is Sentiment Analysis in the Forex Market?

For good reason, sentiment analysis has been employed by almost all of the most successful forex traders to a high degree. It is notoriously difficult to measure, but at its core, sentiment analysis is the study of how the forex market feels at a particular time. Essentially, when we engage in forex market trading, we are expressing our feeling related to how a particular currency pair might perform. Zooming out from our singular decision allows us to see that every combined action within the market forms a general “feeling”. This is the market sentiment.

Through analysis of this sentiment and how it may be impacted by certain trading factors, we can establish how the market will react and thus position our trades accordingly. Being aware of how the market feels, ultimately allows traders to effectively leverage the market sentiment, trading in the direction which they feel the market will take based on a few of the key indicators.

Sentiment analysis also gives rise to another class of trader. That is the contrarian trader. This is someone, whether forex trading online or otherwise, likes to trade against the prevailing market sentiment. Eduardo Elsztain and George Soros are both prime examples of famous traders who profited largely from going against market sentiment.

Key Sentiment Indicators and How to Interpret Them

Sentiment indicators play a vital role in helping traders gauge the current sentiment of the market. These are something which many new traders should be made aware of early on through any reputable forex trading tutorial. Tradefw.com is a positive example of a forex trading broker who offers such an in-depth educational program.

Commitment of Traders Reports

The Commitment of Traders (COT) report is one of the most valuable ways in which you can get an accurate feel for the forex market sentiment, quantified through the featured data. The report is published by the Commodity Futures Trading Commission each Friday and shows the open positions as of the preceding Tuesday.

The data featured in a COT, although not in real time, is the most accurate to represent the market status. In interpretation of this data, traders should be checking for extreme positions within the market. The following formula can be used to extract that percentage from the data:

Commitment of Traders Reports

Volatility Index (VIX)

A second quite effective method for gauging sentiment within the forex market is by viewing the Volatility Index published by the Chicago Board Options Exchange. Generally speaking, since market sentiment is largely based on the emotion and feeling of the market as a whole, the more volatile a currency is rated by the CBOE, the more fear is existing. This would typically create negative forex sentiment trading around that currency.

Market Volume Indicators

Volume indicators as a link to forex market sentiment are especially important. This includes the likes of the Money Flow Index (MFI), and the On-Balance Volume (OBV). The MFI is used to chart the money flow into the market over several days, with an obviously increased flow being linked to market confidence and correlating positive sentiment.

The OBV is also used to chart buying and selling pressure within the market, a key measurement when it comes to correctly identifying the market sentiment.

Independent Broker Tools

Due to the decentralized nature of the forex industry, it can be quite difficult to get precise data on exact positions and volumes within the industry, as they do not all pass through one centralized point. For that reason, many forex brokers will offer their own tools to assist with your sentiment analysis. These can and should then be cross-checked through other forex trading platforms.

The Importance of Sentiment Analysis

Within forex trading and any market, technical, fundamental, and sentiment analysis are all important aspects. Separately, these can identify certain patterns which can help direct your trading in a positive manner, or steer it away from dangerous situations in certain instances. When combined however, these can form a detailed analytical picture of the forex market which will vastly help in improving your skills as a forex trader.

Trading forex without conducting sentiment analysis decreases the amount of knowledge a trader has at their disposal. Ultimately, this results in a higher level of risk when trading in any market.

Conclusion

Although difficult to pinpoint with extreme accuracy due to its inherently emotional nature, sentiment analysis will form a key part of your forex trading strategy alongside the other forms of analysis. The value in this analysis is clear to see and should not be discounted. Having been used by some of the most prolific traders in the forex market over time, its effectiveness has been all but proven.

For this reason, it is imperative to choose a reliable forex broker who will guide you on the journey to understanding sentiment analysis in detail and provide support in other areas of your forex trading progression.

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June 29th, 2018 @ 12:32 pm by Muhammad Azeem

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EUR/USD Elliott Wave Analysis

EUR/USD Elliott Wave Analysis in 15 Minutes chart

Bullish trend is present in EUR/USD currency pair, 15 minutes chart. As I have suggested via my Elliott Wave Analysis few hours ago, the price of EUR/USD currency pair is going to rise up now on a short-term basis to create a Bullish Impulse Elliott wave pattern and Spot Forex traders should consider taking a possible buy trading chance.

So, all those Forex traders who have followed my Elliott Wave Analysis have made the right decision as price has started the bullish leg. Strong key support level is present at 1.1601 price level which is the termination point of Bullish impulse wave i leg. In my opinion, price action in EUR/USD currency pair has not completed bearish wave iv corrective Elliott wave pattern. So, based on Elliott wave analysis, Bearish wave iv leg is going to start after few hours time and I expect the market to first drop lower and then resumes an up trend to rise; towards 1.1680 price area in coming trading hours.

Next, price action is most likely going to prints a top as well in coming trading hours after completing bearish impulse wave v pattern. As the trend is still bullish, Forex traders should consider only long trades and no trade against the current EUR/USD bullish trend as it is always easy to trade in the favour of market trend. Currently, bearish wave ii leg which is part of the Bullish Impulse Elliott wave pattern looks half finish. A good idea is to look for a possible buy trading chance to join an up trend around 1.1626 price area.

However; if the price action in EUR/USD spot Forex pair breaks below 1.1601 important support level then Bullish Elliott wave analysis will become in-valid. From this time forward, I may seize the opportunity to stay out of the market and re-assess the EUR/USD currency pair price movement in fifteen minutes chart. Forex traders who are interested to learn Price Patterns click here.

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June 28th, 2018 @ 3:09 pm by Muhammad Azeem

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EUR/USD Elliott Wave Analysis

EUR/USD Elliott Wave Analysis in 15 Minutes chart

Bullish trend is present in EUR/USD currency pair, 15 minutes chart. As I have suggested via my Elliott Wave Analysis few hours ago, the price of EUR/USD currency pair is going to rise up now on a short-term basis to create a Bullish Impulse Elliott wave pattern and Spot Forex traders should consider taking a possible buy trading chance.

 

So, all those Forex traders who have followed my Elliott Wave Analysis have made the right decision as price has started the bullish leg. Strong key support level is present at 1.1527 price level which is the originating point of Bullish impulse wave i leg. In my opinion, price action in EUR/USD currency pair has not completed bearish wave ii corrective Elliott wave pattern. So, based on Elliott wave analysis, Bearish wave ii leg is going to start after few hours time and I expect the market to first drop lower and then resumes an up trend to rise; towards 1.1655 price area in coming trading hours.

 

Next, price action is most likely going to prints a top as well in coming trading hours after completing bearish impulse wave iii pattern. As the trend is still bullish, Forex traders should consider only long trades and no trade against the current EUR/USD bullish trend as it is always easy to trade in the favour of market trend. Currently, bearish wave ii leg which is part of the Bullish Impulse Elliott wave pattern looks half finish. A good idea is to look for a possible buy trading chance to join an up trend around 1.1539 price area.

 

However; if the price action in EUR/USD spot Forex pair breaks below 1.1527 important support level then Bullish Elliott wave analysis will become in-valid. From this time forward, I may seize the opportunity to stay out of the market and re-assess the EUR/USD currency pair price movement in fifteen minutes chart. Forex traders who are interested to learn Price Patterns click here.

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May 31st, 2018 @ 8:13 am by Muhammad Azeem

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GBP/USD Elliott Wave Analysis

GBP/USD Elliott Wave Analysis in 15 Minutes chart

Bullish trend is present in GBP/USD currency pair, 15 minutes chart. As I have suggested via my Elliott Wave Analysis few hours ago, the price of GBP/USD currency pair is going to rise up now on a short-term basis to create a Bullish Triple Zig Zag Elliott wave pattern and Spot Forex traders should consider taking a possible buy trading chance.

 

So, all those Forex traders who have followed my Elliott Wave Analysis have made the right decision as price has started the bullish leg. Strong key support level is present at 1.3277 price level which is the termination point of Bearish corrective wave X leg. In my opinion, price action in GBP/USD currency pair has not completed bullish wave Z corrective Elliott wave pattern. So, based on Elliott wave analysis, Bullish wave C leg is going to start after few hours time and I expect the market to resume an up trend to rise towards 1.3360 price area in coming trading hours.

 

Next, price action is most likely going to prints a top as well in coming trading hours after completing bullish corrective wave Z pattern. As the trend is still bullish, Forex traders should consider only long trades and no trade against the current GBP/USD bullish trend as it is always easy to trade in the favour of market trend. Currently, bullish wave Z leg which is part of the Bullish Triple Zig Zag corrective Elliott wave pattern looks half finish. A good idea is to look for a possible buy trading chance to join an up trend around 1.3336 price area.

 

However; if the price action in GBP/USD spot Forex pair breaks below 1.3277 important support level then Bullish Elliott wave analysis will become in-valid. From this time forward, I may seize the opportunity to stay out of the market and re-assess the GBP/USD currency pair price movement in fifteen minutes chart. Forex traders who are interested to learn Price Patterns click here.

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May 22nd, 2018 @ 8:08 am by Muhammad Azeem

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USD/CAD Elliott Wave Analysis

USD/CAD Elliott Wave Analysis in 15 Minutes chart

 

Bearish trend is present in USD/CAD currency pair, 15 minutes chart. As I have suggested via my Elliott Wave Analysis few hours ago, the price of USD/CAD currency pair is going to drop now on a short-term basis to create a Bearish Impulse Wave (i) Elliott wave pattern and Spot Forex traders should consider taking a possible sell trading chance.

 

So, all those Forex traders who have followed my Elliott Wave Analysis have made the right decision as price has started the Bearish Impulse wave leg. Strong key resistance level is present at 1.2853 price level which is the originating point of Bearish wave (i) leg. In my opinion, price action in USD/CAD currency pair is in the process to complete the Bearish Impulse (iii) Elliott wave pattern. So, I expect the market to first move up and then resume the down trend and falls towards 1.2740 price area in coming trading hours.

 

Next, price action is most likely going to prints a short term bottom as well in coming trading hours after completing Bearish Impulse wave (iii) pattern. As the trend is still Bearish, Forex traders should consider only short trades and no trade against the current USD/CAD Bearish trend as it is always easy to trade in the favour of market trend.

 

Currently, bearish wave (iii) Impulse Elliott wave pattern looks half finish. A good idea is to wait for the market to first rise up more and then look for a possible sell trading chance to join the down trend.

 

However; if the price action in USD/CAD spot Forex pair breaks above 1.2853 important resistance level then Bearish Elliott wave analysis will become in-valid. From this time forward, I may seize the opportunity to stay out of the market and re-assess the USD/CAD currency pair price movement in fifteen minutes chart. Spot Forex traders who are interested to learn Price Patterns click here.

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