What’s the lesson here?

While Fibonacci retracement levels give you a higher probability of success, like other technical tools, they don’t always work. You don’t know if price will reverse to the 38.2% level before resuming the trend.

Sometimes it may hit 50.0% or the 61.8% levels before turning around. Heck, sometimes price will just ignore Mr. Fibonacci and blow past all the levels. Remember, the market will not always resume its uptrend after finding temporary support or resistance, but instead continue to go past the recent Swing High or Low.

Another common problem in using the Fibonacci retracement tool is determining which Swing Low and Swing High to use. People look at charts differently, look at different time frames, and have their own fundamental biases. The bottom line is that there is no absolute right way to do it, especially when the trend on the chart isn’t so clear. Sometimes it becomes a guessing game. That’s why you need to hone your skills and combine the Fibonacci retracement tool with other tools in your forex toolbox to help give you a higher probability of success. The key Fibonacci retracement levels to keep an eye on are: 23.6%, 38.2%, 50.0%, 61.8%, and 76.4%.

And the levels that seem to hold the most weight are the 38.2%, 50.0%, and 61.8% levels, which are normally set as the default settings of most forex charting software

Remember that forex traders view the Fibonacci retracement levels as potential support and resistance areas. And because these levels tend to be closely watched by many, many forex traders, the support and resistance levels may become a self-fulfilling prophecy.
Similar to the retracement levels, the key Fibonacci extension levels are: 38.2%, 50.0%, 61.8%, as well as the 100%, 138.2% and 161.8% extensions.

Traders use the Fibonacci extension levels as potential support and resistance areas to set profit targets. Again, since so many forex traders are watching these levels and placing buy and sell orders to take profits, these levels can often become the end of the trend move due to self-fulfilling expectations.


IS ANYONE STILL FOLLOWING ?

Yea

Chidonsky:
Yea

Only you,where are others ?

yes im here still diligently following.

FOLLOWING BUMPER TO BUMPER RIDE ON SIR

@op pls come back ur students are waiting

Moving Averages?
A moving average is simply a way to smooth out price action over time. By “moving average”, we mean that you are taking the average closing price of a currency pair for the last ‘X’ number of periods. On a chart, it would look like this:

Like every indicator, a moving average indicator is used to help us forecast future prices. By looking at the slope of the moving average, you can better determine the potential direction of market prices. As we said, moving averages smooth out price action. There are different types of moving averages and each of them has their own level of “smoothness”.
Generally, the smoother the moving average, the slower it is to react to the price movement. The choppier the moving average, the quicker it is to react to the price movement. To make a moving average smoother, you should get the average closing prices over a longer time period.
In this section, we first need to explain to you the two major types of moving averages:
1. Simple
2. Exponential
I’ll also teach you how to calculate them and give the pros and cons of each. Just like in every other lesson, you need to know the basics first!
Calculating the Simple Moving Average (SMA)
If you plotted a 5 period simple moving average on a 1-hour chart, you would add up the closing prices for the last 5 hours, and then divide that number by 5. Voila! You have the average closing price over the last five hours! String those average prices together and you get a moving average!
Now, as with almost any other forex indicator out there, moving averages operate with a delay. Because you are taking the averages of past price history, you are really only seeing the general path of the recent past and the general direction of “future” short term price action.
Here is an example of how moving averages smooth out the price action.

On chart above, we’ve plotted three different SMAs on the 1-hour chart of USD/CHF. As you can see, the longer the SMA period is, the more it lags behind the price. Notice how the 62 SMA is farther away from the current price than the 30 and 5 SMAs.

This is because the 62 SMA adds up the closing prices of the last 62 periods and divides it by 62. The longer period you use for the SMA, the slower it is to react to the price movement. The SMAs in this chart show you the overall sentiment of the market at this point in time.

Here, we can see that the pair is trending. Instead of just looking at the current price of the market, the moving averages give us a broader view, and we can now gauge the general direction of its future price. With the use of SMAs, we can tell whether a pair is trending up, trending down, or just ranging.

There is one problem with the simple moving average: they are susceptible to spikes. When this happens, this can give us false signals. We might think that a new currency trend may be developing but in reality, nothing changed.

Ride on sir

Chidonsky:
Yea

Please,I need u to put me through on domain park and sell online buzness.

Please help me for God's sake.

Exponential Moving Average (EMA)
As we said earlier, simple moving averages can be distorted by spikes. We’ll start with an example.
Let’s say we plot a 5-period SMA on the daily chart of EUR/USD.

The closing prices for the last 5 days are as follows:
Day 1: 1.3172
Day 2: 1.3231
Day 3: 1.3164
Day 4: 1.3186
Day 5: 1.3293
The simple moving average would be calculated as follows:
(1.3172 + 1.3231 + 1.3164 + 1.3186 + 1.3293) / 5 = 1.3209. Simple enough, right?

Well what if there was a news report on Day 2 that causes the euro to drop across the board. This causes EUR/USD to plunge and close at 1.3000. Let’s see what effect this would have on the 5 period SMA.
Day 1: 1.3172
Day 2: 1.3000
Day 3: 1.3164
Day 4: 1.3186
Day 5: 1.3293
The simple moving average would be calculated as follows:
(1.3172 + 1.3000 + 1.3164 + 1.3186 + 1.3293) / 5 = 1.3163

The result of the simple moving average would be a lot lower and it would give you the notion that the price was actually going down, when in reality, Day 2 was just a one-time event caused by the poor results of an economic report.

The point we’re trying to make is that sometimes the simple moving average might be too simple. If only there was a way that you could filter out these spikes so that you wouldn’t get the wrong idea. It’s called the Exponential Moving Average!

Exponential moving averages (EMA) give more weight to the most recent periods. In our example above, the EMA would put more weight on the prices of the most recent days, which would be Days 3, 4, and 5. This would mean that the spike on Day 2 would be of lesser value and wouldn’t have as big an effect on the moving average as it would if we had calculated for a simple moving average. If you think about it, this makes a lot of sense because what this does is it puts more emphasis on what traders are doing recently.

Exponential Moving Average (EMA) and Simple Moving Average (SMA) Side By Side

Let’s take a look at the 4-hour chart of USD/JPY to highlight how a simple moving average (SMA) and exponential moving average (EMA) would look side by side on a chart.

Notice how the red line above (the 30 EMA) seems to be closer price than the blue line (the 30 SMA). This means that it more accurately represents recent price action. You can probably guess why this happens.

It’s because the exponential moving average places more emphasis on what has been happening lately. When trading, it is far more important to see what traders are doing NOW rather what they were doing last week or last month.

How to Use Moving Averages to Find the Trend
One sweet way to use moving averages is to help you determine the trend. The simplest way is to just plot a single moving average on the chart. When price action tends to stay above the moving average, it signals that price is in a general uptrend.If price action tends to stay below the moving average, then it indicates that it is in a downtrend.

see

Gbammm! You get faked out! As it turns out, traders just reacted to the news but the trend continued and price kept heading lower! What some traders do – and what we suggest you do as well – is that they plot a couple of moving averages on their charts instead of just one. This gives them a clearer signal of whether the pair is trending up or down depending on the order of the moving averages.

Let us explain.
In an uptrend, the “faster” moving average should be above the “slower” moving average and for a downtrend, vice versa. For example, let’s say we have two MAs: the 10-period MA and the 20-period MA. On your chart, it would look like this:

Above is a daily chart of USD/JPY. Throughout the uptrend, the 10 SMA is above the 20 SMA. As you can see, you can use moving averages to help show whether a pair is trending up or down.

Combining this with your knowledge on trend lines, this can help you decide whether to go long or short a currency. You can also try putting more than two moving averages on your chart. Just as long as lines are in order (fastest to slowest in an uptrend, slowest to fastest in a downtrend), then you can tell whether the pair is in an uptrend or in a downtrend.

ANY QUESTION?

How does money circulate in forex? like the money we make as profit, is it from the losses other trader made?

abbeyforex, abeg e get any good naija broker you fit recommend? And whats the best way to fund a forex account? I'm about to use neteller and fund mine...

samogo1:
How does money circulate in forex? like the money we make as profit, is it from the losses other trader made?

Profit we make is not from the losses of others but from the price movement .

MEKKY77:
abbeyforex, abeg e get any good naija broker you fit recommend? And whats the best way to fund a forex account? I'm about to use neteller and fund mine...

Check my signature for the broker I use to trade,I have been with them for over 4 years. You can fund your trading account with your savings account,no need to look around for digital currency like neteller. Withdrawal takes less than 2 hours and Funding also takes less than that.

abbeyforex:


Check my signature for the broker I use to trade,I have been with them for over 4 years. You can fund your trading account with your savings account,no need to look around for digital currency like neteller. Withdrawal takes less than 2 hours and Funding also takes less than that.

Thanks...

How to Use Moving Average Crossovers to Enter Trades

By now, you know how to determine the trend by plotting some moving averages on your charts. You should also know that moving averages can help you determine when a trend is about to end and reverse.

All you have to do is plop on a couple of moving averages on your chart, and wait for a crossover. If the moving averages cross over one another, it could signal that the trend is about to change soon, thereby giving you the chance to get a better entry.

By having a better entry, you have the chance to bag more pips! Let’s take another look at that daily chart of USD/JPY to help explain moving average crossover trading.

From around April to July, the pair was in a nice uptrend. It topped out at around 124.00, before slowly heading down. In the middle of July, we see that the 10 SMA crossed below the 20 SMA. And what happened next? A nice downtrend! If you had shorted at the crossover of the moving averages you would have made yourself almost a thousand pips!

Of course, not every trade will be a thousand-pip winner, a hundred-pip winner, or even a 10-pip winner. It could be a loser, which means you have to consider things like where to place your stop loss or when to take profits. You just can’t jump in without a plan! What some traders do is that they close out their position once a new crossover has been made or once price has moved against the position a predetermined amount of pips.

One thing to take note of with a crossover system is that while they work beautifully in a volatile and/or trending environment, they don’t work so well when price is ranging. You will get hit with tons of crossover signals and you could find yourself getting stopped out multiple times before you catch a trend again.

How to Use Moving Averages as Dynamic Support and Resistance Levels

Another way to use moving averages is to use them as dynamic support and resistance levels.We like to call it dynamic because it’s not like your traditional horizontal support and resistance lines. They are constantly changing depending on recent price action.

There are many forex traders out there who look at these moving averages as key support or resistance. These traders will buy when price dips and tests the moving average or sell if price rises and touches the moving average. Here’s a look at the 15-minute chart of GBP/USD and pop on the 50 EMA. Let’s see if it serves as dynamic support or resistance.

It looks like it held really well! Every time price approached 50 EMA and tested it, it acted as resistance and price bounced back down. Amazing !
One thing you should keep in mind is that these are just like your normal support and resistance lines.

This means that price won’t always bounce perfectly from the moving average. Sometimes it will go past it a little bit before heading back in the direction of the trend.

There are also times when price will blast past it altogether. What some forex traders do is that they pop on two moving averages, and only buy or sell once price is in the middle of the space between the two moving averages.
You could call this area “the zone.”

Let’s take another look at that 15-minute chart of GBP/USD, but this time let’s use the 10 and 20 EMAs.

From the chart above, you see that price went slightly past the 10 EMA a few pips, but proceeded to drop afterwards. There are some traders who use intraday strategies just like this. The idea is that just like your horizontal support and resistance areas, these moving averages should be treated like zones or areas of interest.

The area between moving averages could therefore be looked upon as a zone of support or resistance.


Breaking through Dynamic Support and Resistance

Now you know that moving averages can potentially act as support and resistance. Combining a couple of them, you can have yourself a nice little zone. But you should also know that they can break, just like any support and resistance level!
Let’s take another look at the 50 EMA on GBP/USD’s 15-min chart.

In the chart below, we see that the 50 EMA held as a strong resistance level for a while as GBP/USD repeatedly bounced off it. However, as we’ve highlighted with the red box, price finally broke through and shot up. Price then retraced and tested the 50 EMA again, which proved to be a strong support level.

Moving averages can also act as dynamic support and resistance levels. One nice thing about using moving averages is that they’re always changing, which means that you can just leave it on your chart and don’t have to keep looking back in time to spot potential support and resistance levels.

You know that the line most likely represent a moving area of interest. The only problem of course is figuring out which moving average to use!

Hope you are not getting bored ? I dont expect you to get bored anyway,if you can be patient to use 4 years in higher institution to study a course you are not sure of exploring, then you should not be bored or impatient for few months in acquiring SKILLS that can turn a whole life around like it did for me.

Its all about Peaceful Wealth?

Gud job Abbeyforex

godoluwa:
Gud job Abbeyforex

tnx bro

@abbey thanks a lot u have made this hard forex look so simple with your explainantion. God bless you

morgan2p:
@abbey thanks a lot u have made this hard forex look so simple with your explainantion. God bless you

the guy is doing fine with the explanation