[ad_1]
Forex Trading Course Walkthrough Talking Points:
- This is the eighth of a ten-part series in which we walk through articles from DailyFX Education.
- The aim of this series is simplicity while covering some of the more important aspects of the FX market along with traders’ strategies and approaches.
- If you would like to access the full suite of educational articles offered by DailyFX education, you can get started here: DailyFX Forex for Beginners
The concept of support and resistance is a key component of technical analysis and, for many, especially fundamentals-based traders, the concept is the primary aspect of technical analysis. Its assistance with risk management can be enormous while its ability to predict, like anything else, is questionable because the future shall always remain uncertain.
Many traders eschew that lack of predictability to instead focus on probabilities, which can be helped by a multitude of technical tools. There are many ways of doing this.
A number of experienced traders employ price action and related methods, which involve using no technical indicators on the chart and instead focuses on patterns or formations. This is certainly available to you but, as a warning, it is usually considered ‘advanced’ and may not make much sense to traders new to charts.
In place of price action, many traders look to indicators and, again, this is a very wide field of analysis. To get started, we suggest learning about probably the simplest and most utilitarian indicator: The Moving Average.
Moving Average (MA) Explained for Traders
After gaining an understanding of the moving average, traders interested in learning more can discover the many indicator tools available to traders to help them customize their strategy or approach.
Technical Indicators Defined and Explained
To take this to the next step, we’re going to get more involved with a popular indicator that may be a little more advanced. It is based off of the same moving average that we looked at above, but this includes a few additional moving parts to create the MACD (Moving Average Convergence Divergence) indicator.
What the MACD Indicator is and How it Works
Real World Application
To put this to use while incorporating prior lessons, from the demo account – attempt to find a trend on the daily chart using the 200 day moving average, with a corresponding MACD signal on the four-hour chart. If the daily chart is showing a topside trend, look for a bullish MACD signal in order to set a buy order. Alternatively, if the daily chart is showing a bearish trend, look for a short signal via MACD on the four-hour chart.
Check progress every 24 hours, managing/closing trades from prior days while also initiating new ones as opportunities present themselves.
— Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
[ad_2]
Image and article originally from www.dailyfx.com. Read the original article here.