The A-Z of Forex Trading: Part 2 (G to L)

Filed under: Learn Forex Trading |

(Continued…)

 

G… is for Gold. One of the most popular exchange rates to trade in the markets is the XAU/USD pair, which is the pair for gold and the US dollar. This pair has great liquidity, provides strong areas of support/resistance, and is in a long-term bull trend.

 

H… is for Head and Shoulders. No – not the popular household shampoo! In forex trading, this refers to a price pattern characterized by the shape of a head and two shoulders. It is used to identify tops and bottoms in markets.

 

I.. is for Inside Bars. This is another of my favourite type of price action setups. It is characterised by two candlesticks, with the first one having a higher high than the second one, and the second one also having a higher low than the first. It occurs when the market is consolidating, and we can use them by trading breakouts from the range.

 

J… is for Japanese Candlesticks. Steve Nison brought Japanese Candlesticks to the West around two decade ago, which is relatively recently. Nowadays, all modern charting software has the option of using candlestick charts. They provide more information than line charts, showing the open, close, low, and high of each particular candle. This can be incredibly useful information for traders.

 

K… is for Key reversal bars. Okay, I am scraping the barrel with this one! These include patterns such as pin bars, which move in one direction, and then reverse all in one session.

 

L… is for Long-term Trader. It is so important to have a long-term vision when trading forex. In the short term, anything can happen; but in the long term, if you have a market edge, then you should be profitable. A long-term approach is vital to win in the forex markets.

 

(To be continued…)

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