reading forex chart patterns part 1

Copyright © 2007 Stephen Margison www.sm-forex.com

“IT’S TIME TO GET MORE OUT OF LIFE”

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Reading Charts 1

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The Forex Codes Chart Patterns

I do not teach “systems.” Mechanical systems do not work over the long term.

Many traders never really understand this point and lose.

I teach you how to trade using Technical Analysis (charts) and Fundamental Analysis (economic news)



Chart Pattern is one KEY to trading success

It is a Market “Fingerprint” or “CODE”

Use only the most basic and obvious chart patterns just like the Pros do!

Others will have spotted them hence more probability of success


The Forex Codes - Trends The TREND is your FRIEND until it ends.

UPTREND. – Higher highs and higher lows

DOWNTREND – Lower highs and lower lows

SIDEWAYS – Range bound highs and lows


The Forex Codes


The Forex Codes Trends within Trends


The Forex Codes Swing High and Lows


The Forex Codes The Bulls and the Bears!

BULLS are optimistic and look for an upward market direction

So if someone is Bullish he thinks the market will rise.

BEARS are pessimistic and look for a downward market direction

So if someone is Bearish she thinks the market will fall


The Forex Codes The Bulls and the Bears!


The Forex Codes The Long and the Short of it!

If you trade a position in which you BUY the market you are said to be LONG

If you trade a position in which you SELL the market you are said to be SHORT

Hence if you buy the market you must be bullish at that moment

If you sell the market you must be bearish at that moment


The Forex Codes Japanese Candlesticks (intro)



The Japanese began using technical analysis to trade rice in the 17th century. Candlestick charting first appeared sometime after 1850

Long bodies indicate strong buying or selling and a faster move. The faster buying or selling activity occurs, the longer the body becomes.


The Forex Codes Average Daily Range

Each currency pair has an Average Daily Range With the GBP/USD (commonly known as Cable)

it is about 140 Pips When the market pushes prices greater in excess

of the ADR then opportunities arise for trading retracements

It also helps as a guide to prevent you from getting into trades when the market is already stretched


The Forex Codes Highs and Lows


The Forex Codes Support and Resistance Very important to Professional Traders

Some expert traders can trade purely on S and R

The importance of S and R must not be underestimated!

Larger timeframes more important!


The Forex Codes Resistance


The Forex Codes Support


The Forex Codes Support becomes Resistance

The concept of Support becomes Resistance (and vice-versa) is very powerful and VERY trade-able

A firm support level (perhaps a major low) once it is broken will likely turn into a strong resistance level at a future date

Conversely a strong resistance level (perhaps a major high) may turn into a firm support level once it is broken


The Forex Codes Support becomes Resistance


The Forex Codes - Timeframes Daily, 4hr, 60min, 30 min, 15 min and 5min are

the ones used by me

In general levels of S and R on larger timeframes are more important than on smaller timeframes

Pros will use 4hr and daily charts far more than the smaller timeframes


“IT’S TIME TO GET MORE OUT OF LIFE”

www.sm-forex.com

Reading Charts1

http://www.forextradingtv.com/

reading forex chart patterns part 1

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