One of the most appealing price patterns to novice traders is undoubtedly the range pattern; a sideways, trendless price movement confined in two horizontal boundaries. Bouncing from the lower horizontal line and rebounding from the upper horizontal line looks so predictable that even experienced traders find it hard to resist.
As long as a prolonged sideways price movement is in place, traders may enjoy consistent potential profits by going long on the support area and going short at the resistance.
Over the last several weeks, central banks have played a major role in the forex markets, so it is important that traders understand the role of central bank and how such institutions impact the market.
The role of central banks differ from country to country but their core function in many countries is to facilitate and control monetary policy (the supply of money within the country).
It is common knowledge among traders, especially beginners, that when prices reach a support level, they will bounce up and when prices reach a resistance level they will pull back.
This concept, which is a fundamental part of the theory of technical analysis or 'charting', is of course valid in a range. After all, this is what the range is all about, price action within a confined area on the price chart. This fact alone makes range trading so appealing to the point that many systems have been developed to trade support and resistance and take advantage of the predefined price path. What is not that widely understood is that you will never know when prices will eventually break out of the sideways movement - especially when volume is not available.
Britain’s astonishing decision to quit the EU on June 23 made Article 50 one of the most searched phrases in the world of finance - this article looks at how the UK might go about making the separation from the bloc and some consequences. The pound has already slumped when result emerged on the 24th and will continue to waver as the economic and political separation progresses.
Article 50 of the Lisbon Treaty essentially refers to the mechanics of leaving the EU. Member-states that trigger this clause formally notify Brussels of their intention to leave the 28-member union. Now that Britain has voted to leave the EU,it’s only a matter of time before Article 50 is invoked.
In the very early steps of their trading career, traders learn the importance of trend and its impact on their profit and loss results.
Many trading systems out there have been developed to follow the trend. In fact, most of them are trend-following systems, triggering signals in the direction of the prevailing movement in the market.
The UK economy is ready to embrace the future "from a position of strength" following voters’ decision to exit the European Union (EU) last week, Chancellor George Osborne told markets on Monday.
"I said we had to fix the roof so we were prepared for whatever the future held and thank goodness we did," Mr Osborne said in an attempt to calm the markets after an unprecedented sell-off in the British pound that began post-vote on Friday.
Today’s historic and shocking decision for the UK to leave the EU is likely to have an intense impact on global markets for some time to come - providing trading opportunities aplenty if you use proper risk-management techniques.
We saw sterling (GBPUSD) hit a 30-year low, stocks across the globe reacted negatively with the UK footsie losing 8.7% and predictably gold surged a massive $100.
The Fibonacci retracement is considered a predictive technical indicator that can help investors gauge future levels of a currency pair after a sharp increase or decrease in price.
More specifically, plotting the lines of the Fibonacci retracement on a chart can help traders find points of support and resistance on which to place stop-loss and take-profit orders.
As we approach June, the question on everyone’s lips will be whether the Fed will pull the trigger, some six months after their December hike which brought about a sharp downturn in financial markets in the first half of 2016. Last week’s FOMC minutes sparked a sharp appreciation in the US dollar, which has since led the index to an almost two month high.
With rate hike expectations on the rise, the June meeting is certainly back on the table as a potential action from the Fed. Janet Yellen has reiterated time and time again that each monetary policy decision is ‘data dependent’ in its own right.
Experienced traders know the value of time, and the importance of timing, when it comes to forex trading.
Not only is it important for traders to identify opportune times for entering and exiting the market, but understanding how forex timing works can also provide traders with useful frameworks within which to build a profitable trading strategy.
Thu, 1st Jan - * (ShareCast News) - Banks and miners led the FTSE to a lower close Friday, in a session awash with blue-chip news including disappointing annual results from Royal Bank of Scotland and Standard Chartered, among other stocks reporting.