Trading Strategy: Selling Rallies This strategy is the opposite of buying dips, and applies in a bear market. It involves taking a short position, selling on temporary strength, an upward retracement or consolidation, in an otherwise downtrending market. Here are the steps involved — establish that the market is going down check that the sector […]

Trading Strategy: Buy Relative Strength In contrast to the previous strategy, where we waited until there was a consolidation or retracement in the trend to be sure that we traded at a suitable low point, an alternative way to profit from an uptrend is to buy into the strongest of the strong, without waiting for […]

Trading Strategy: Buying Dips This is an effective strategy for all types of financial instruments. It works best when there is a clear bullish market. It involves buying into an established uptrend, and it tends to exit before the trend is finished,so it doesn’t capture the whole trend, but as a result tends to be […]

Trading Strategies Finally, a recap on some proven strategies that will work in most financial sectors. We have covered the general principles of how you can expect a market to move, and also how you have to be indifferent to whether it goes in the direction you expect. The market is always right, by definition, […]

Keep a Trading Journal You can’t expect to get it all right from the start, so keeping a trading journal and reviewing it regularly is important to help you improve. It’s a good idea not to critique your trades too quickly, as you may still have the cloud of emotion, but you shouldn’t wait too […]

Module 17 – Trading Principles As this is the last module, and contracts for difference and spread betting are in any case available on virtually any financial instrument, it’s appropriate to go over the overriding principles that cover all types of trading and markets and that you must keep in mind to make a long-lasting […]

Continuation Patterns Although at first sight continuation patterns may appear to be unnecessary and not useful for trading, they can provide you with a clue about whether to stay in the market or to take your profit. Candlestick patterns are used much more for reversals, but continuation patterns have their place. This is an example […]

Trading Journal As part of your trading system, it’s important to keep a check on your open positions and your overall performance. There are losses in trading and in the business of trading there are also expenses to consider. These need to be managed, and you can do this by keeping them small. Many traders […]

Summary Forex trading has many advantages, provided you use a reputable dealer and are careful about the high leverage available. Your account for spot Forex trading can be much smaller than required for trading many other markets, including Forex futures, with typical leverage of 100 to 1 or better. You also do not pay commissions […]

Capitalization Because of the amount of leverage which Forex offers, it’s easy to get in over your head, and all previous advice about position sizing and limiting your losses should not be disregarded just because you ‘can’. Typically, you can trade with leverage of 100 to 1, which means the standard Forex contracts of 100,000 […]