so i've been getting the markets and day trading for the past 4-5 months. starting to get a pretty good feel for
regular stocks........what causes big changes, how they might move due to headlines/news/earning, what is good volume, what timeframe things happen, etc..
I need to understand the same about forex trading so:
what is measure of good trading volume?
what timeframes do you use for charts and when do big shifts generally occur?
Also - do typical pattern day trader rules apply, such as no more than 3 day trades in a 5 day period? (if you have less than 25K in your account)
i'll try to answer to your questions:
1) Every trader has got his personal measure of trading volume. The key is your personal confort, however a lot of traders who loss money trade too much, mainly when they loss.
2) About the time frame i use: daily, hourly, 30 minutes, 5 minutes ... i think a daily or an hourly one is a good point to start. The main problem using lower time frames is the average trade, usually too small to cover the costs of the Forex markets;
3) I'm convinced that daily patterns generally work, but time isn't necessary linked to the deep of your account. The subject is a little more complicated. You should consider a lot of other items like the maximum draw down of your system, its maximum daily drawdown, your stop loss and your take profit, .... then to reduce the risk is always possible to decide that a single trade can't last more than a certain numers of bars/days.
Goog luck for your trading!!!
I'm sure i did many mistakes, i'm sorry for my english
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I believe volatility in FX slowly but surely will getting better ...
I have slightly different approach to your Q ...
Here's the basic example : Use ADR 5 indicator, take half of the number as a target price, only take the trade if the Stop is 1/2 smaller than tg price.
There are advantages to using futures data for major currency pairs.. it shows volume, actual trade price and you can use Commitment of Traders reports to work out where large hedgers and large speculators are getting involved.
Start with the higher time frames charts, quarterly, semi-annual, and whittle your way down to the smaller time frames, 2 hr, 1 hr charts.
The first thought that comes to mind is why are you switching from stocks to forex? If you're getting the feel for stocks, why the switch? I'm not saying you should not trade forex, but make sure switching around to different types of instruments is not just a chase for the next shiny object over there. You'll profit more quickly if you learn to focus on a limited number of instrument types and focus on one or two markets first.
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Let’s take a look at the average pip movement of the major currency pairs during each forex trading session.
Pair Tokyo London New York
EUR/USD 76 114 92
GBP/USD 92 127 99
USD/JPY 51 66 59
AUD/USD 77 83 81
NZD/USD 62 72 70
USD/CAD 57 96 96
USD/CHF 67 102 83
EUR/JPY 102 129 107
GBP/JPY 118 151 132
AUD/JPY 98 107 103
EUR/GBP 78 61 47
EUR/CHF 79 109 84
From the table, you will see that the European session normally provides the most movement.
Let’s take a more in-depth look at each of the session, as well as those
This is when the real shebang begins! You can literally hear traders crack their knuckles during this time, because they know they have their work cut out for them. This is the busiest time of day, as traders from the two largest financial centers (London and New York) begin duking it out.
It is during this period where we can see some big moves, especially when news reports from the U.S. and Canada are released. The markets can also be hit by “late” news coming out of Europe.
If any trends were established during the European session, we could see the trend continue, as U.S. traders decide to jump in and establish their positions after reading up what happened earlier in the day. You should watch out though, at the end of this session, as some European traders may be closing their positions, which could lead to some choppy moves right before lunch time in the U.S.
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