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Articles by Sunil Mangwani

November 14th, 2007 @ 11:56 pm by Sunil Mangwani

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Most strategies or techniques in technical analysis involve the use of indicators.

But more often than not, most traders use indicators for all kinds of situations which tend to render them quite ineffective.

Just as a carpenter’s toolbox has different instruments which are used for different purposes, each indicator in the tool box of a trader has to be used for a particular situation.

In our Live Trading Room we teach, among many other things, a series of lessons we call “Know your Indicators”, which introduce specific indicators, and go over the characteristics and drawbacks of the same.

First and foremost, there is one point that a trader needs to keep in mind – all indicators are lagging, and it is ultimately price which is the only leading indicator.

Indicators should be used just as they are described – as “indications” for price movements and not as confirmations. While this does not diminish the importance of the indicators, one must remember that a change in price will cause a change in the indicator – not the other way round.

Indicators, nevertheless, play an important part in the building of strategies and techniques – but only if one applies them correctly.

The DMI/ADX is one of the most effective and yet underused indicators. If used with the correct parameters, it can be a very effective trading system on its own. Read the rest of this entry »

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November 5th, 2007 @ 3:01 pm by Sunil Mangwani

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In the forex markets, it’s worth knowing the characteristics of the currency pairs, since each of them exhibit distinct identities.

Most of the currencies exhibit similar movement patterns, which can help a trader confirm price movements.

One such close relation can be found between the EUR/USD & USD/CHF.

The price movements of these two currency pairs are absolute mirror images.

In short, they have an inverse relationship: If EUR/USD is rallying, then USD/CHF should have downward movement, and vice-versa. Read the rest of this entry »

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October 12th, 2007 @ 11:29 am by Sunil Mangwani

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Confirming the long term trend of a particular instrument with another correlating factor only increases the probability of a profitable trade.

We are attempting a predictive write up here, since there are similar patterns developing in EUR/USD and Spot Gold.

As of today, the overall situation seems to be favoring the Us Dollar, as the technicals are indicating some respite from its recent downfalls.
This may not necessarily be a reversal, but we can certainly expect a retracement of the US Dollar to the upside.

Let’s first have a look at the close relation between the movements of EUR/USD and Spot Gold.

Read the rest of this entry »

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September 27th, 2007 @ 7:28 pm by Sunil Mangwani

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The Pivot Point System is a technique developed by floor traders, to help ascertain where the price is relative to previous market action. It can be classified as a technical indicator derived by calculating the numerical average of the high, low and closing prices, of any currency / index / stock etc.

A look at market movement tells us that price always fluctuates between a level of support and a level of resistance. Properly identifying key support and resistance levels can improve the ability to enter, exit, and manage your trades.

The pivot point is a level at which the sentiment of the market changes. It can tell us where the sentiment of traders and investors changes, from bull to bear or vice versa.

The main advantage of this technique is that it is price-based as opposed to indicator-based. By the time most indicators generate a signal, the move is already well under way. By following this system, one can get into a trade before the indicator-following traders, and be well into the trend when a signal is just being generated on a stochastic or other oscillator.

In its basic interpretation, we can say that if the market breaks the Pivot level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand if the market breaks this level down, then the sentiment is bearish, and is expected to continue its way down.

Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible. Read the rest of this entry »

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May 14th, 2007 @ 12:36 pm by Sunil Mangwani

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Our third FX Instructor video demonstrates the use of our FXI Divergence Detector indicator during a Live Trading Room session. The indicator is designed to visually indicate divergence and hidden divergence.

Be sure to subscribe to our YouTube channel to be notified of any future releases!

[youtube]http://www.youtube.com/watch?v=AeNdMhY3LG0[/youtube]

Stay tuned for future video releases by FX Instructor!

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May 8th, 2007 @ 4:49 pm by Sunil Mangwani

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I’ve recently posted a new article on the Trade2Win.com website, recommend you stop by and check it out. I believe it can be very informative for forex traders. Article exerpt:

If there is one thing that a trader would want to know for certain, it would be to catch the bottom or top of a trend.

But simple as it sounds, it is easier said than done.

Knowing that a certain price wave is completed, or is just a retracement in the larger trend, becomes more of an art than a science.

In such situations, using multiple sources of confirmation helps to avoid the potential false signals, and preserve our capital for only those situations that provide us with the most favorable risk to reward scenarios. Keeping that in mind, we will use two very different indicators – the ADX (Average Directional Movement Index) and the PSAR (Parabolic Stop & Reverse) – to form a system which should help us to trade as close to the top / bottom as possible.

The rest of the article can be reached by clicking here.

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May 8th, 2007 @ 4:42 pm by Sunil Mangwani

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Our third FX Instructor video demonstrates the use of our custom FXI Pivots indicator during a Live Trading Room session. The indicator is designed to visually indicate support, resistance, and momentum lines.

Be sure to subscribe to our YouTube channel to be notified of any future releases.

[youtube]http://www.youtube.com/watch?v=XzZlRqIRtAQ[/youtube]

Stay tuned for future video releases by FX Instructor!

Click here to read the full article.

April 27th, 2007 @ 7:39 pm by Sunil Mangwani

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Our second FX Instructor video highlights the use of Fibonacci’s and Divergence (including hidden divergence) in predicting price action.

[youtube]http://www.youtube.com/watch?v=aFILvlDEpIY[/youtube]

Stay tuned for future video releases by FX Instructor!

Click here to read the full article.
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