One of the most difficult for scalpers before trade is to determine a strategy. There is a complex trading strategies and there are simple, and make plans for entry with a specific strategy for the scalper does not have to be complex. This article exemplifies a simple trading strategy for scalping with the indicator CCI (Commodity Channel Index) for scalping. Only three steps you need to do is determine the direction of the trend, decisive momentum with indicators CCI entry and exit levels determine in accordance with risk management.

Determine the direction of the trend

First at all, to trade using simple strategy for scalping. Scalper typically use a time frame of 1 minute to 15 minutes. To determine the direction of the trend are commonly used indicator of exponential moving average (EMA). In the example NZD/USD following used EMA period 200. If the price moves above the curve line EMA-200 then assumed moderate bullish trend and momentum trader will wait for an opportunity to buy, otherwise if the price moves below the EMA-200, traders await sell opportunities.

From the picture above looks prices are still trending strongly indicated by the distance between the closing price of the EMA-200 widening. Besides price movements also form a higher high levels (a new high level higher than the previous high level) and higher low (low levels of new, higher than the previous low level) which is characteristic of an uptrend movement.

Entry moment with the indicator CCI

Because trading with a low time frame, then after knowing the direction of the trend trader should immediately determine the momentum of entry before momentum is lost and the trend changed. One indicator that could help determine the momentum of entry is CCI. Besides being used to determine overbought and oversold situation, the CCI indicator also shows the cycle of price movements or moments of change of direction of the trend, ie when there is a divergence between the direction of price movement and direction of movement of the indicator.

Because in this example the movement of the price uptrend, the trader will wait for the oversold state for the entry, when the CCI is below -100 level as shown in the image above. In contrast to a sell entry made only when the price moves below the curve line indicator EMA-200 and CCI indicator shows overbought situation.

Exit level in accordance with the risk management

Risk management is crucial in scalping because traders will usually entry several times a day. Trader can use extreme levels (high or low) before a stop loss level, or by specifying a stop loss levels on the curve line itself. Risk / reward ratio should not be higher, but try to be greater than 1: 1.

That's all, this is a simple trading strategy for scalping.

The combination of a horizontal line at the level of support or resistance and price action may be the one simple and effective forex strategies that you can apply. (Note: Price action is a way of trading to observe and analyze the formation of pin bar that happens to Candlestick chart). After we defined horizontal lines of support and resistance for the dominant, we can wait for the formation of pin bar that formed around those levels.

The importance of horizontal lines

Maybe we feel uncomfortable with many trading indicators on the chart, and want it could be trading with a few indicators but quite validly. Well, if that's what we want, maybe you can try this way, the horizontal lines and the price action. Professional traders always look at important levels on the horizontal line. They have to know that these levels are very significant and have an impact on the direction of price movement. Horizontal lines can be used as a reference for setting the level of stop loss, and will be effective when combined with price action with examining the pin bar formed.

Application of horizontal lines and the price action in trending market conditions:

Consider the following example, on each swing point we can observe the formation of the pin bar formed. In fact, the swing point is often accompanied by the formation of pin bars that indicate a reversal of the trend going. In the case of an uptrend as in this example, the pin bar on the swing point (blue circle) indicates the downtrend reversal correction, or commonly known as the end of the correction, so that the overall trend is still rising. In a downtrend market that is happening is the opposite process.

The application of horizontal lines and the price action in the sideway market conditions (range bound):

For sideway market conditions (range bound), we simply look at the formation of the pin bar formed on support levels and resistance (blue circles in the figure below). We determine the timing for the start of entry if it has really looked signal pins that ensure that the bar is still sideway market conditions, and are still in a trading range. Stop loss and profit targets can be set at a level close to the support or resistance in accordance with the direction of entry positions we take.

'Event' area in a horizontal line

Event area is the area around a horizontal line which shows strong signals for entry based on price action. Of formation of pin bar formed can happen penetration (break) or retest at a certain price level which indicates that the level is significant. For entry should be confirmed with a pin bar formed.
In the following example that has break inside bar indicates a strong signal to sell, after retest confirming that the horizontal line is really significant resistance (blue circle in the image), we can sell at the entry level slightly below the retest point.

Examples of trading with horizontal lines and the price action

In the following example EUR / USD initially sideway at 1.4100-1.4000 level (event area), then break down when it formed a pin bar and inside bar. After the retest, the price moves back down. Note the pin bar and inside bar formed and indicates the levels where we can entry.

So by combining the levels of support / resistance and pin bar that formed in the surrounding area we can find signals when the right time to enter the market.

One of the common questions that new traders learn about Forex trading strategy is a strategy which is better used? Technical or fundamental? When technical analysis is all the things associated with graphs and figures, then fundamental analysis is the opposite, that everything outside of charts and figures, such as for example, news and market opinion.

Generally, based on two strategies above, the trader will be divided into a technical trader and a fundamental trader. However, in practice, it is no trader can actually apply pure one strategy. The fact is, both strategies complement each other, so that when both are combined, the path to becoming a successful forex trader will open wider.

All traders will definitely want to get a way to survive in the forex and produce consistent profits. In this article, we will provide an easy way to identify the condition of the market, based on a combination of trading strategies, technical and fundamental.

For you who are looking for market forex trends, try to observe the state of the current market. Whether the market is a reversal, saturated, or is experiencing a reversal of the trend? To get the answers, trader must be able to seek and find the direction of price movement. Price movement chart or action chart price is the solution. If the price moves into a higher trend (graph moving upwards), then it is called Up Trend, conversely, if the price moves into the lower trend (graph moving downhill), called Down Trend. The graph below is an example of a Trend Up and Down Trend:

By observing the trends mentioned above, the trader can easily identify bias in market sentiment. Wherein, when the down-trend, bias will decrease, and vice versa when the up-trend, bias will increase.

In this situation, trader is not enough to just sell or buy and hope to be on the right track only. However, traders should be able to make purchases with a minimum price when up-trend, and sell at a price as much as possible in the event of down-trend. In other words, when prices had the opposite with your transaction, immediately get out of the transaction.

Forex trader also can use support and resistance to identify price movements. More importantly, it also can reverse the trend of the market at that moment. As in the above chart shows the price is initially being down-trend can be reversed into an up-trend.
Thus, risk management should still be used even though the symptoms can be seen and predictable market clearly.

To be able to combine technical and fundamental, traders could use the economic calendar to see whether the opportunity to buy or sell. Generally, price of the event news will provide more opportunities, so expect traders can take these opportunities to gain by entering the market at the right time. For more details, can be seen from the following picture:

In conclusion, in order to obtain consistent profits, traders should be able to look at the overall market. As expressed by Jamie Saettele (Dailyfx): "to be able to take advantage, then the trader should be able to see the reaction of the price of a story that happened, and was able to react quickly when news is being released".

Happy weekend :)

The trader can learn a variety of existing trading patterns by using technical analysis. One of the most useful patterns in a market that is experiencing a trend is a flag pattern. This time, we will see and identify a transaction by utilizing the flag pattern that can identify a downtrend.

Identifying Patterns
We are sure you will be able to apply the bearish flag pattern easily after understanding the following three basic steps.

First, look for flag that will be marked as the beginning of a down trend in both the down sharply or slowly.

Secondly, you must have a tolerance limit when the flag has been determined. It will be a consolidation period of falling prices. During this period, the price will probably turn up slowly. In this situation, traders are advised to wait until prices break through the lower positions of the previous trend.

Third, once prices move lower again, that's where you can find the last component required in trading with bearish flag pattern. Trading profit obtained from reversal after the price has reached the lowest trend. The price level should be determined in advance by measuring the distance pips since the decline. Then, the peak value is reduced the resistance line that has been predicted. For more details, you can see the picture below:

EUR/JPY price
The picture above is a bearish flag pattern on the daily chart of EUR/JPY. Formed from the flag pole, the trader can see the relationship began on June 21 at the 101.61 level until the 24th of July at 94.10 level. Formed from a series of points, it appears the difference of 751 pips since the decline.

From these images it appears that the price is in a consolidation phase. Once the price starts to rise gradually, you can see the formation of a bearish flag pattern. And by utilizing the pattern, you can generate a profit of 751 pips when the price dropped to a potential target is near the 91.00 level.

Breakout is a breakout price at a certain level that is considered important, it can the resistance level, support or psychological level round number. If the movement failed to break that level, then it calls false breakout. By theory, the level of support or resistance is important that should be penetrated (break) or not broken (bounce). With reference this entry, then trader should sell when the price has exceeded the level of support or buy if the price through the resistance level.

But in its development, the reality is often different markets. Prices' could break moment too soon reversed course again (bouncing) or false breakout occurred. Traders who use this moment of entry can be called contrarian traders, and the way in which so-called contrarian trading. Trading with false breakout is one way in contrarian trading.

Contrarian trading can be done for example by looking for opportunities entry buy when the price movement down or opportunity sell when the price is considered to have been overvalued or too expensive, of course, after adjusting for the possibility of a reversal of the direction of the trend (trend reversal) through confirmation of technical indicators or formation of price action formed.

If by chance you like to use a breakout strategy may have experienced when you have an entry below support or above the resistance level when prices break through, it suddenly reversed direction of price movement. There are several reasons why the market failed to break out, which seems clear is the declining momentum shortly after the price managed to break. At this critical level occurred a battle between the big players, namely central banks, financial institutions and the big boys.

If the central bank does not want the price through a certain level it will soon double the lot size (position size), and if the big boys feel less supported, or was not strong enough against the central bank, then they will go with the flow, entry on the direction reversal, Hence the importance of the levels of price movements will slide quickly and sharply as the momentum is very strong, both when the break and when reversed (false breakout).

For example, the following false breakout on a bullish trend, that prevailed in the price movement of GBP/USD daily. In early November 2007 the GBP/USD managed to penetrate the level of 2.1050, 50 pips above the psychological level of 2.1. Please note Pound has never reached 2 per US dollar since its formation in March 1993. After forming a bearish engulfing candlestick bar, then pound-dollar slumped to the level of 1.5 a year later (November 2008), 6000 pips from a false breakout. Note the market sentiment in the days that followed that tends to bearish.

Another example of the popular currency pairs EUR / USD. In the following weekly chart appear to have happened several false breakout on a bullish or bearish trend, at levels round number.

Note the stronger the resistance or support level then the stronger the movement direction reversal that followed.

In the forex market a false breakout is more common given the general market conditions which actually trending only about 20% to 30% of the price movement. Therefore this strategy is quite popular in forex trading.

Breakout and a false breakout in sideways condition

False breakout condition often occurs in a sideways market (ranging), as in the following example:

Here seen 4 times a false breakout, 2 times the level of resistance and 2 times the level of support. Traders who are familiar with the analysis of price action can certainly anticipate the formation bar formed, the pin bar, inside bar or a doji. With the setup observations confirm price action and technical indicators will be known whether the conditions have been perfect breakout or not.

To be safe, contrarian traders will tend to use a limit order to an area close to the level of resistance or support, which limit sell at area 2 and 4, and limit buy-in area 1 and 3. Being aggressive traders will utilize the breakout perfect condition with stop order, the stop buy at area 2 or 4, and stop short at area 1 or 3. As shown in the example above, a perfect breakout occurred after 4 times false.

However, pending orders as it is not necessarily safe, and more speculative because we do not know for sure the flow behavior of prices (order flow) at levels that we place the order. To be objective, we must know the behavior of the overall price movements by reference to the higher time frame to determine the dominant trend at the moment. If the dominant uptrend then sideways circumstances will tend to break out at resistance, and vice versa if the dominant downtrend.

Next we see the bar candlestick formation and price action setups around the level of resistance and support. In the example above, the first looks inside bar area followed by a doji, suggesting a strong market consolidation. There was also a rejection on the level of support. We can entry buy when the mother highest level bar has passed. In the second area looks pin bar and inside bar as well as rejection at resistance. This shows that the market is consolidating after the price to test the resistance level. Entry sell can be done when the mother lowest level bar has been penetrated, likewise in area 4.


False breakout on the psychological level

Another example is a false breakout that often occur at the psychological level, as follows:

False breakout occurred 2 times on the psychological level of 1.6000. First when the swing low, with the formation inside the bar, and the second is currently bullish engulfing formation is formed.

In trading with the false breakout we should not rush to entry. Wait until the way is clear market sentiment.

Forex trading is a challenging business. Generally, there are two types of trading, long term and short term. Each has its own difficulty level. A good trader is not just enough to know the market, but also to understand the type of trading. One key to success to become a good trader is knowing what type of trading that fits you.

Definition
Short-term trading is generally suitable for people who are happy to trading on a daily basis. These types of traders like to do as much as possible and as quickly as possible trading profit in a matter of hours. On the other hand, there are traders who prefer a long-term trading. Trader This type of trading is more varied, for example from day to day, week to week, month to month and even year to year.

Read : 5 Things to Consider Before trade

Time Constraints
Short-term trading is very time consuming because traders really need to keep an eye on market movements at all times. Every little movement in the market may indicate the emergence of a new trend.

Long term traders tend to ignore the daily factors and see the general idea. However this does not mean that you can ignore the daily trading. Long term trading is more of a precaution against profits that have been obtained from the previous trend.

Capital constraints
In the short-term trading, traders are faced with greater risks. If he had more to lose margins and increasingly have a financial burden, then he should win more often to make significant gains. While an obstacle for long term traders is to consider the cost of rollover and interest rates.

Tools of Trade (Trading Tools)
Short-term traders really should update the news or the latest data released. One example is the “nonfarm” short-term trading. Trading is often generate short-term lurches in the market if a little late great potential to destroy your trading. Short-term traders usually put trading positions before any news or data was released. This is a precaution against any secondary movements related to news or data.

Although it is not necessary constantly watching the news a growing, long-term trader also still have to look at technical analysis and the more weighty, especially fundamental factors such as the economic outlook in the long term, the pressure in the economy, and interest rates, and even other things like political cycle , Long term traders usually have a good knowledge of the history of the market, for example, any event that never caused significant upheaval in the macro conditions. He also learned from past experience how the market will turn around, or even out of a trend.

Read : 5 Things to Consider Before trade

Personality
Short-term trading usually have pressure and stress levels are high enough. Many short-term traders can be found at the stock exchange floor. Short-term traders should be able to take risks and most importantly, they must be able to remain calm under great pressure.

Long term traders need not worry about the amount of movement of the market from day to day. Long-term trading by itself even further from the pressure when compared with short-term trading. Trader dealing with the long-term sustainable market movements. For those who choose this type of trading, please note, not out of position when the trend seems to be slowing down because there would likely be a market correction.