Markets for Trader Profiles
My favorite FOREX markets. Work with Tier One, move on to Tier Two.
Avoid Crosses and Exotics until you have mastered a few pairs.
The euro/U.S. dollar (EUR/USD) is the most popular pair traded. it
offers lots of liquidity and variety for all trader profiles. Be aware of U.S.
Federal Reserve announcements and U.S. Bureau of Labor and other governmental
reports. These news items can have a powerful and immediate effect on
prices, directional movement, and volatility. Pip spreads may balloon from 1 or
2 pips to 30 or more pips, especially if you are using a retail market-maker
broker/dealer.
My advice: Stay out of the markets during these times. Sit on your hands
and watch the reaction to the news for price trend indications. It is not
uncommon for prices to react in one direction after news, only to gradually
move back in the opposite direction over the course of the trading session.
Keep in mind that a market can look enormously different on different
chart scales and also within different time frames. Use only your three bar
charts and no others. A market’s personality may look different on different bar
charts, as a function of either the scale of the chart or the range of the chart.
The same currency pair may exhibit different personalities and market environment
characteristics over a 5-second chart, a 30-minute chart, and a daily
chart. Don’t let chart scales or ranges confuse you; it is easy to let this happen!
My favorite FOREX markets. Work with Tier One, move on to Tier Two.
Avoid Crosses and Exotics until you have mastered a few pairs.
The euro/U.S. dollar (EUR/USD) is the most popular pair traded. it
offers lots of liquidity and variety for all trader profiles. Be aware of U.S.
Federal Reserve announcements and U.S. Bureau of Labor and other governmental
reports. These news items can have a powerful and immediate effect on
prices, directional movement, and volatility. Pip spreads may balloon from 1 or
2 pips to 30 or more pips, especially if you are using a retail market-maker
broker/dealer.
My advice: Stay out of the markets during these times. Sit on your hands
and watch the reaction to the news for price trend indications. It is not
uncommon for prices to react in one direction after news, only to gradually
move back in the opposite direction over the course of the trading session.
Keep in mind that a market can look enormously different on different
chart scales and also within different time frames. Use only your three bar
charts and no others. A market’s personality may look different on different bar
charts, as a function of either the scale of the chart or the range of the chart.
The same currency pair may exhibit different personalities and market environment
characteristics over a 5-second chart, a 30-minute chart, and a daily
chart. Don’t let chart scales or ranges confuse you; it is easy to let this happen!
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