Forex Trading Education - The London Open Checklist
Part of your Forex trading education should include a study of the effect market timings can have on trading and volume.
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
Around London open time develop recognition skills and add them to your Forex trading education so you can capitalize on this productive market session.
The following questionnaire and checklist will help.
London Open Preparation
Check these points about fifteen minutes to half an hour before the London market opens:
MACD indicators on the 4 hour and 1 hour charts - if they are not going in the same direction exercise great caution!
If there is divergence on the 4 hour, 1 hour or 15 minute charts on the MACD indicator, look for other signs that price may go in the direction of the divergence.
On the 4 hour chart what is the overall trend?
Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.
Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)
Are any fundamental announcements due?
As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji's or hammers indicating price exhaustion?
What would my risk be and where would I place my stop if I entered a trade right now in a particular direction?
Within a few minutes of London open, if you see a number of factors converging from the analysis above, make a decision one way or the other:
trade
wait for clearer signals or a better entry point
This kind of analysis carried out at the time the London market opens will certainly increase your Forex education and possibly provide you with a number of excellent trading opportunities.
You will be able to fine tune your analytical skills and be in touch with the underlying feel of the market.
Forex trading education does not depend on a magical formula. What it does entail is years of work, study, practice and experience, often hard earned through watching many trades go bad.
At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times - the hardest and most important aspect of Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading. - 23200
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
Around London open time develop recognition skills and add them to your Forex trading education so you can capitalize on this productive market session.
The following questionnaire and checklist will help.
London Open Preparation
Check these points about fifteen minutes to half an hour before the London market opens:
MACD indicators on the 4 hour and 1 hour charts - if they are not going in the same direction exercise great caution!
If there is divergence on the 4 hour, 1 hour or 15 minute charts on the MACD indicator, look for other signs that price may go in the direction of the divergence.
On the 4 hour chart what is the overall trend?
Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.
Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)
Are any fundamental announcements due?
As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji's or hammers indicating price exhaustion?
What would my risk be and where would I place my stop if I entered a trade right now in a particular direction?
Within a few minutes of London open, if you see a number of factors converging from the analysis above, make a decision one way or the other:
trade
wait for clearer signals or a better entry point
This kind of analysis carried out at the time the London market opens will certainly increase your Forex education and possibly provide you with a number of excellent trading opportunities.
You will be able to fine tune your analytical skills and be in touch with the underlying feel of the market.
Forex trading education does not depend on a magical formula. What it does entail is years of work, study, practice and experience, often hard earned through watching many trades go bad.
At last, the Forex trader learns the mental and emotional skills necessary to remain disciplined at all times - the hardest and most important aspect of Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading. - 23200
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For a free candle & chart pattern recognition reference tool click here: Candle Trading See how to use trendlines to get an optimum trade entry point: Trendline Break
posted by X - Men @ 2:43 AM
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