FOREX WISDOM

• Let your profits run, but cut your losses short. 

• Don't double up a losing position

• Don't let a winning position turn into a losing one.

• Sit on your hands when you don't have a clue

• No one ever went broke taking a profit

• Don't marry a position.

• It's never too low to sell or too high to buy

• Don't Stand in Front of a Train

• Buy the rumor, sell the fact

• Plan your trade and trade your plan

• The trend is your friend.

• Bulls Make Money, Bears Make Money, but Pigs Get Slaughtered.

BASIC FOREX - PIVOT POINT

Support & Resistance

support levels are considered levels at which price decline is continually rejected. Conversely, resistance levels are considered levels at which price increase is continually rejected. Traders looking at a support level and resistance level in conjunction with one another are essentially examining what is referred to as a channel. It is very common to see price trends within the bounds of trading channels; meaning that for hours, or perhaps days at a time, a currency may trade within the bounds of support and resistance levels. Many times throughout a trend the price may test either the support or resistance level, but ultimately if the price is to remain within the channel the support and resistance levels will be tested, but not pushed through.

Just the opposite of what is explained above, if a support or resistance level is tested for hours or days on end without a breakout, and finally the price does push through the bounds of this channel, it may be considered a strong indication that the price will take on an entirely new direction / trend.

Calculating Pivot Points

Key figures are derived from the open, high, low and closing price of the previous day's trading session. These figures should be based on trading days or sessions considered started and ended at 0:00 GMT (Greenwich Mean Time). GMT is used because of the global aspect of currency trading; with various markets (Australia, Asia, Europe, US) constantly opening and closing globally – a 24-hour-a-day market is created. GMT is used to mark the start and end of trading days because it is considered a globally central time.

These calculations are shown for your reference. Most pivot products will draw these levels on your chart for you.

Pivot Point (PP): High + Low + Close / 3

The calculations for support and resistance levels are based on the number calculated for the pivot point itself and are as follows:

First Support (S1): (2 x PP) - High

Second Support (S2): PP - (High - Low)

First Resistance (R1): (2 x PP) - Low

Second Resistance (R2): PP + (High - Low)

As is the case with many technical analysis methods, strategies, and indicators – pivot points are far from an exact science. Pivot points may be completely irrelevant technically when trading right after a major fundamental news announcement. Traders should also consider other technical indicators, the overall trend of the currency pair, and the time frame of the chart they are analyzing pivots on in correlation with how long they plan to remain in an open position.

FOREX TIPS

• Before you dive headfirst into forex trading, learn the forex market through a demo or practice account. Preparing yourself for real trading by utilizing a demo platform provides an excellent source of training

• Nothing is guaranteed to make you lots of money in forex. No amount of knowledge, forethought, or specialized software can guarantee your success.

• Most successful forex traders will advice you to keep a journal of everything that you do. Include all of your failureS and your successes in the journal.

• Do research to decide which broker will you join. Researching your broker online is an easy way to see which firms can be trusted and which cannot. You can find quite a bit of information regarding brokers on forums dedicated to Forex.

• Don’t even think about moving a stop point. You should always come up with stop point that you will never move.