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Great article Rayner. Your write ups are always very interesting and resourceful too. I am a swing position trader only interested in trading Price Action at Support and Resistance. For me that involves naked trading with only the MA lines on my candle chart. Still on the elementary stage for now but working steadily on it. Thank you. The cons: ………… Can lose a lot more than intended if you suffer massive slippage from Black Swan events ………….
I prefer to do swing trading using 1 to 4 hr time frame. Hopefully there will be more trading opportunities this way. I would also very much like to use the trend following method as seen from your videos. I think my problem is emotions.
Transition trading is so wonderful. This information is an eye opening indeed. Awesome article Rayner. Learned a lot from this. Am a day trader. Like to time entries from Support and Resistance levels in the market, analyze my trades with daily and 4hr. Pick trades mostly with 4hr chart. Once again, thumbs up Rayner. Keep up the good work. Thanks Rayner. Do you have any actual data as support for the claim that these can work audited track records for example? You can look up firms like Dunn, Mulvaney, Winton as they are hedge funds which employ a Trend Following approach which falls under position trading.
Did I missed it or have you stop doing the analysis? Great information as always!! I would love to hear more about the transition trading. Is there another article with more information? I prefer swing trading…. I can spend few hours a day for trading. Thanks Rayner for this educational blog. It reinforces what I think I know! Hopefully get me to be profitable with real accounts. Hey rayner! Can a daily timeframe be used for swing trading or is it better to use the 4 hour timeframe in entering trends?
Hi rayner I like your website I would like to say that I would be a hybrid of swing trading as well as trend trading. I fail alot and well I dont like ofcourse no one does realy. I am asking for your almighty nolage on what would be a good trading stratagy for me. I dont like spending all day on a screen.
Half the reson for my past faliars witch i realised through your web site. Also thanks for your website it had some helpful facts and has helped alot thanks. So i hope you could help me become a better tradsman. Hello dani,,,, its painfull to here that even me i had a such problem of lossing money because I failed to abind my self into a good trading strategy for most of my past trading days,, but honestly iam telling without more effort nothing sweat can be got, so i struggled alot and it came by chance on my side a beautiful way that has low risk, good profit, and it saves time you might trade just in a week and all of your time you might do other things.
For sure now iam free i can not stay much on my screen but i get time to deal with my medical school. Dani if ur ready honestly and kindly i can help you to know the strategy free just as my brother. And you shall be happier with it, i shall also help you some more other trading challenges that i have faced and the way to solve them. Thanks for the tips, information. Keep up the good work RT. I give you huge credit bro when it comes to trading.
Thanks for a plausible explanation. Your write up encourages alot of people to make a firm decision to master a specific trading parttern. I found the active management more stressful than other strategies, may I ask what strategy do you prefer?
I will make necessary adjustments and I hope things change. For me i see, both trade might sense the same interm of finance because, the long term trade have a great deal of pips in profit as compared to the short term trades, so the one with short term trade will trade more to compesate the profit of the one with long term trade.
But sometimes what matters is what you can see on the screen at time t, if it happens the short time has favour so you can take it and if its a long term trade you can also trade. But the major deal is about your time to trade as stated in this article.
Please what MA or Donchian DC setting would be appropriate for the different types of trading strategies, if one wants to know what trend to follow and setups to look for? I ask this because its not too clear how effective using, for instance, the MA long term trend , on the 5 mins time frame can be, since the 5 mins time frame seems more suited for traders looking for shorter and quicker opportunities.
Hi Rayner reading through, I come to realize without any doubt I am a swing trader, due to my full time a very demanding job which I would like to be knowledgeable and profitable with trading to catch a break. My question here is since I know what kind of trader I am and I like the trend following strategy, how can I create a trading plan that as I follow to the T, will give me an edge as u always say, in the market.
Thank you in advance. I have been totally blown away by all of the information you have been providing us! I have been getting my trading education over the past 11 months and it always seems that people will only give you part of the information and always leave out the most important parts. And I am talking about information that I am paying for! You my friend give us the full meal deal and we are so grateful for that. You Rock!! Hi Rayner, thanks a lot for your effort. I have a question… is valuta trading different then crypto trading?
Can I use the same strategies? Thanks in advance! Hi Rayner, your article is really informative and helpful for a new and aggressive trader like myself. It turned out to be a 9R trade. It was my best week in months! Thanks bro for your enlightment,am a position trader I prefer using a daily chart pin bar combined with trend and areas of value. I already try the swing strategy using FXLeaders and it works well, and while reading these strategies I think I want to try another strategy too.
Thank you for sharing. I rarely compliment someone on these kind of sites, but you are not only a successful trader, you are an appropriate teacher for this subject. I have tested a few German suppliers, running and offering roughly the same business-model as you do, but successful traders, even being eloquent, are often poor teachers.
So, here are my regards — and let us know, when you finally move in your penthouse and buy a supercar, because, what else should you do with your money? Let me take more learn from you Rayner. I can spend all the times in trading. Thanks to your book. Thank you Ray. Rayner, I like the way you teach. It is very simple and comprehensible. Can you please guide me in Trading?. Thank you boss I have learnt a lot from this, I want to be a day trader, and scalping small.
Thanks for the information.. I am a medical student with limited time and I just started learning about forex trading.. Hi Rayner , can you describe one rout to be trader for example : 1-Define what trader you are 2-Make Trading Plane 3-Find strategies and master them for differente conditions of market …. Everything here have just been wonderful and awesome thanks RAYNER,am a beginner but i know your the right person to take me through.
I want to know the three strategies so that i can choose my own time….. Position trading, Day trading and scalping then the swing trading…. Thank you so much for the learning sir…. I hope someday I can be a successful trader…..
God willing. Thank you so much for your sharing. I happened to explore your website a few days ago. Your teaching is concise and easy to understand. Learning has never been so clear from books and other websites. What else would you recommend? Your Posts have focused my trading more than ever before Rayner , Thank you so much. I now spend only 30min a day in front of the screen instead of 2 hours end of day data with this now very much streamlined trading system.
Forever grateful for you help , thankyou Rayner. Hi Rayner, thanks for sharing your knowledge. I am currently spending most of my time day trading and scalping, but I am still a raw novice learning all the time. I have all the time in the world to sit in front of my screen. Which time frames should I focus on Ray. I generally use Price action trading based on technical analysis. But some time win and some time loose. Prefer daily closing basis US time frame. But I am Indian and some time I miss the exact closing.
But I think Swing trading strategy is the best of all. Hi Rayney, this is Bryan from Sydney Australia. I am currently trying to set up a trading plan by studying your numerous YouTube uploads in conjunction with my cycle analysis.
I believe there are trading cycle 1 month or 20 day , primary cycle 20 week or day , seasonal cycle 50 week or day and long term cycle 4 year or week in a market. My trading plan is looking for a position trade of primary cycle in a direction of seasonal cycle.
All of this can be done in the daily time frame! Thanks for your TAE method, finding a trend using MAs, support and resistance and price action trading methology…. The SMA defines the long term trend of market. If price is above the SMA, the long term trend is up and vice verse. The 50 and 20 EMA act as an area of value so when price is on or in the 50 and 20 EMA zone, I look to enter a trade in the direction of the long term trend.
In the cycle analysis, there is also a half span cycle which used to identify a cycle low when a prevailing trend is strong. So the half span of primary cycle is 50 EMA. Now, we can state as follow in terms of the cycle analysis. The 30 day trading cycle lows occur when price is on or below the 20 EMA on the daily chart.
Similarly, the 20 week primary cycle lows occur when price is on or below the range of 50 and EMA called primary cycle zone. Therefore, if we can enter the long trade at the cycle lows in up trend or cycle highs in down trend, we could maximise our profit potential and at the same time minimise our loss potential!!! I am trying to return to trade again after 5 years of rest and currently studying the market to set up my trading plan.
Thanks for Rayner to sharing a valuable knowledge and experience of profitable trading. Currently, I am a one trick pony, looking at the ASX index but I like to expand to various Forex, world indices and commodities, If you could help me how to trade in those markets I would be greatly appreciated.
Hi Teo, Am just new on trading but started with cryptocurrency. I would love to know more about swing trading and scalping strategies please. Looking to derive income at the moment. Thanks a lot for such awnsome witten. You made my day! Finally I know where can I start! At the present, I can look at screen full time and get exited to see dolars come to my account so I chose day and swing trading.
In the fulture when Covi-9 has gone I will back to work so the postion trading would be my choise. Thanks Rayner as I speak I love reading more about trading so that I understand the concept si nce you came close to me the rainbow colour arranged them self… What I am saying I was mixing a lot of things now I understand better… Keep on being with I really appreciate your wonderful work… One of the good days we will mit that will my biggest thanks I ever give anyone..
God bless you. Thank you very much. I enjoy your videos — many thanks. Brother thanks for sharing. Great discussion Rayner. Personally, I work a trending method that works top down. I go from Daily, then 4H, then 1H and 15m. The Daily and 4H are for direction setting and the 1H and 15m are for entry and exit. I use short, medium and long term trendlines and look for trendline breaks. I think day trading is suitable for beginners because you can quickly and easily experience more signals within short time.
Is it a bad approach to take a bit of the three and combine it? Thanks for the free content you provide you really give people like me a place to start from and slowly dive into the big world of trading and investing. I am in Demo acc. You are a resourceful person Rayner. I have been trying swing trading but without much understanding and in the process making loses. Going through yr articles equips me with knowledge.
I preferred swing trading and I want to know how to use it , because I have limited time to work on the screen.. I was a scalper when I started. Now doing day trade and trying to be a swing trader. Thanks for sharing all your knowledge and experiences.
Thanks for this wonderful piece of information. Well presented and easy to comprehend. Pieroo from Uganda. My brother that I am very clear I want to become a day trader While reading the transaction trading I am completely shocked great strategy what you find after completing my day trading course please teach me transaction trading thank you so much my dear bro. I think that i have found my man with you Reynar,i have been trying to learn Forex trading but with all the material i have been using i was getting confused,since i have been watching your videos and reading your ebooks im really progress,so i dnt want to confuse myself anymore,all i want is your resources im now confident that im going be good at this, so im in South Africa anf would really appreciate it,if u could email me relevant material for beginners,i have never traded before,you are amazing men.
Thank you Ryner…. Thank you for the insight. Hello Rayner Though I am new in forex I have devoured two of your of your books the one on reading candle stick pattern and the ultimate guide to price action trading, I found them really helpful, but the transition trading strategy on this article really caught my attention, I would like it if you could expound more on it in subsequent articles.
I prefer swing trading cause I am working at the moment and interested in creating wealth rather than just income. I prefer day trading because I have more free time to my self and also wish to create income.
You are a blessing to manytraders. I have been learning using the swing and goes for the 4 hour time frame. Thanks for sharing your knowledge with me, it has been so helpful. Currently unemployed,hoping to make this an income stream. Sometimes I close my trades daily and sometimes I hold till next day or days. The same goes for traveling. A French tourist in Egypt can't pay in euros to see the pyramids because it's not the locally accepted currency.
As such, the tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate. One unique aspect of this international market is that there is no central marketplace for foreign exchange. Rather, currency trading is conducted electronically over-the-counter OTC , which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange.
The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney—across almost every time zone. This means that when the trading day in the U.
As such, the forex market can be extremely active any time of the day, with price quotes changing constantly. Unlike stock markets, which can trace their roots back centuries, the forex market as we understand it today is a truly new market. Of course, in its most basic sense—that of people converting one currency to another for financial advantage—forex has been around since nations began minting currencies. But the modern forex markets are a modern invention. The values of individual currencies vary, which has given rise to the need for foreign exchange services and trading.
There are actually three ways that institutions, corporations and individuals trade forex: the spot market , the forwards market, and the futures market. Forex trading in the spot market has always been the largest market because it is the "underlying" real asset that the forwards and futures markets are based on. In the past, the futures market was the most popular venue for traders because it was available to individual investors for a longer period of time.
When people refer to the forex market, they usually are referring to the spot market. The forwards and futures markets tend to be more popular with companies that need to hedge their foreign exchange risks out to a specific date in the future. More specifically, the spot market is where currencies are bought and sold according to the current price. That price, determined by supply and demand, is a reflection of many things, including current interest rates, economic performance, sentiment towards ongoing political situations both locally and internationally , as well as the perception of the future performance of one currency against another.
When a deal is finalized, this is known as a "spot deal. After a position is closed, the settlement is in cash. Although the spot market is commonly known as one that deals with transactions in the present rather than the future , these trades actually take two days for settlement. Unlike the spot market, the forwards and futures markets do not trade actual currencies.
Instead they deal in contracts that represent claims to a certain currency type, a specific price per unit and a future date for settlement. In the forwards market, contracts are bought and sold OTC between two parties, who determine the terms of the agreement between themselves. In the futures market, futures contracts are bought and sold based upon a standard size and settlement date on public commodities markets, such as the Chicago Mercantile Exchange.
In the U. Futures contracts have specific details, including the number of units being traded, delivery and settlement dates, and minimum price increments that cannot be customized. The exchange acts as a counterpart to the trader, providing clearance and settlement. Both types of contracts are binding and are typically settled for cash at the exchange in question upon expiry, although contracts can also be bought and sold before they expire.
The forwards and futures markets can offer protection against risk when trading currencies. Usually, big international corporations use these markets in order to hedge against future exchange rate fluctuations, but speculators take part in these markets as well. Note that you'll often see the terms: FX, forex, foreign-exchange market, and currency market. These terms are synonymous and all refer to the forex market.
Companies doing business in foreign countries are at risk due to fluctuations in currency values when they buy or sell goods and services outside of their domestic market. For example, imagine that a company plans to sell U. A stronger dollar resulted in a much smaller profit than expected. The blender company could have reduced this risk by shorting the euro and buying the USD when they were at parity. That way, if the dollar rose in value, the profits from the trade would offset the reduced profit from the sale of blenders.
If the USD fell in value, the more favorable exchange rate will increase the profit from the sale of blenders, which offsets the losses in the trade. The advantage for the trader is that futures contracts are standardized and cleared by a central authority. An opportunity exists to profit from changes that may increase or reduce one currency's value compared to another.
A forecast that one currency will weaken is essentially the same as assuming that the other currency in the pair will strengthen because currencies are traded as pairs. Imagine a trader who expects interest rates to rise in the U. The trader believes higher interest rates in the U. There are two distinct features to currencies as an asset class :. An investor can profit from the difference between two interest rates in two different economies by buying the currency with the higher interest rate and shorting the currency with the lower interest rate.
Prior to the financial crisis, it was very common to short the Japanese yen JPY and buy British pounds GBP because the interest rate differential was very large. This strategy is sometimes referred to as a " carry trade. Currency trading was very difficult for individual investors prior to the internet. Most online brokers or dealers offer very high leverage to individual traders who can control a large trade with a small account balance.
The interbank market has varying degrees of regulation, and forex instruments are not standardized.
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Ten minutes early? A half hour late? Does this apply to work meetings, as well? Do you prefer constant eye contact when communicating with someone? How much is too little? Or too much? Do you make gestures with your hands when you speak? Do you do this constantly? Only when you're excited or anxious? However, all are related to your culture. You can probably think back to a parent or grandparent who was much like you, and who would have answered the same way as you.
We are all a product of our culture. Different people from different cultures use different communication styles. You may be the type of person who gets right to the point. However, a colleague may take a more circular approach and take longer to say what needs to be said.
Understanding the different communication styles and how culture influences them will help to ease frustration and promote understanding, not just for you, but for your colleagues, as well. Linear versus circular. Linear discussions get straight to the point. Circular discussions involve telling stories around the main point. Direct versus indirect. In direct communication, statements are made directly to the people involved. In indirect communication, communication is made through suggestion, implication, and other cues, and may be made within earshot or through a third party.
This is to avoid confrontation. Detached versus attached. Attached communication is made with feeling and emotion; whereas, detached communication favors objectivity. Concrete versus abstract. Concrete communication assumes that issues will be better understood using stories, allegories, and examples.
It focuses on the specific. Abstract, on the other hand, uses theories, principles, and data. It focuses on the general. Intellectual engagement versus relational engagement. Intellectual engagement means that a disagreement is directly stated. It's assumed that the idea behind the disagreement is under attack, but not the relationship between those involved in the communication. This is common in some European countries.
Relational engagement involves being respectful of feelings and ideas. In other words, tread softly. Americans tend to be linear, direct, detached, intellectually engaged, and concrete. However, a lot of African, Pacific, and Asian cultures prefer circular, indirect, attached, and relationally engaged. In France, the style is typically abstract, intellectually engaged, and detached.
In Spain and Latin America, it can be direct, linear, abstract, and relationally engaged. Of course, this can differ in other countries, regions, and cultures. Being aware of different communication styles, though, is the start to understanding and becoming more sensitive when someone communicates using a different style than you. Developing the skills and ability to understand and communicate effectively with all your employees or co-workers is critical to your success in your own career, as well as the success of your organization.
Diversity in the workplace isn't going to go away or decrease. In fact, it's going to increase as diversity in this country continues to increase. There are endless cultural variations that will determine people's beliefs, values, work ethic, and even their work schedule. It's impossible for you to learn every culture in the world and gain the skills and knowledge to understand each and every culture.
Nobody expects you to do that. Instead, developing cultural competence means gaining an awareness and basic knowledge of cultural differences and how those differences affect people's beliefs, values, work ethic, and work schedule, so you can be more understanding and sensitive to them. Team building. The U. People want to do things on their own. However, there are other cultures that value teams and cooperation.
When you want to go it alone at work, this can be problematic if you have someone always wanting to work together to achieve success. It can also be a great asset when building teams within the workplace. Different communication styles will affect how people interact and handle problems.
Someone from an Asian culture may be hesitant to give bad news, but someone else from different culture may exaggerate it. Learn to recognize different communication styles. Different cultures have different views on time, such as the balance between work and family, and work and socializing.
They can also differ on the meaning of "late. Calendars and holidays. It also primarily celebrates Christian holidays. It's helpful, especially if you're in a position where you schedule meetings, events, work days, etc. You can obtain cultural calendars for free online. Have you ever tried to learn a foreign language? Perhaps you took Spanish for a few years in high school, then college.
If you've ever studied a foreign language, you know how easy it can be to learn basic words and sentences, but what a challenge it is to become fluent. In today's workplace, it's likely that some of your employees and co-workers are from different continents or countries, and they are still working toward being fluent in English.
In the meantime, it's important that everyone learns techniques to work through any existing language barriers for the greater good of the task at hand, as well as the organization. When communicating with someone who isn't fluent in English, make sure you adjust your English to fit the person who's listening.
You want them to be able to comprehend what you say, so make sure you use words and phrases they will understand. This means refraining from using slang, jargon, or buzz words. Speak a little slower. We Americans tend to talk fast. Make sure you clearly pronounce every word. You can also use visual aids, such as pictures, charts, and graphs, to communicate what you are trying to say.
While it can be frustrating for you to slow down to communicate with someone who isn't a native English speaker, it can also be beneficial. You'll find that the level of respect for you, from everyone in the organization, will increase because of your effective communication abilities.
Now we have a trend-following tool to tell us whether the major trend of a given currency pair is up or down. But how reliable is that indicator? As mentioned earlier, trend-following tools are prone to being whipsawed. So it would be nice to have a way to gauge whether the current trend-following indicator is correct or not. For this, we will employ a trend-confirmation tool. Much like a trend-following tool, a trend-confirmation tool may or may not be intended to generate specific buy and sell signals.
Instead, we are looking to see if the trend-following tool and the trend-confirmation tool agree. In essence, if both the trend-following tool and the trend-confirmation tool are bullish , then a trader can more confidently consider taking a long trade in the currency pair in question. Likewise, if both are bearish , then the trader can focus on finding an opportunity to sell short the pair in question.
One of the most popular—and useful—trend confirmation tools is known as the moving average convergence divergence MACD. This indicator first measures the difference between two exponentially smoothed moving averages. This difference is then smoothed and compared to a moving average of its own. When the current smoothed average is above its own moving average, then the histogram at the bottom of Figure 3 is positive and an uptrend is confirmed. On the flip side, when the current smoothed average is below its moving average, then the histogram at the bottom of Figure 3 is negative and a downtrend is confirmed.
In essence, when the trend-following moving average combination is bearish short-term average below long-term average and the MACD histogram is negative, then we have a confirmed downtrend. When both are positive, then we have a confirmed uptrend.
At the bottom of Figure 4 we see another trend-confirmation tool that might be considered in addition to or in place of MACD. It is the rate of change indicator ROC. As displayed in Figure 4, the red line measures today's closing price divided by the closing price 28 trading days ago. Readings above 1. The blue line represents a day moving average of the daily ROC readings.
Here, if the red line is above the blue line, then the ROC is confirming an uptrend. If the red line is below the blue line, then we have a confirmed downtrend. A bearish configuration for the ROC indicator red line below blue :. After opting to follow the direction of the major trend, a trader must decide whether they are more comfortable jumping in as soon as a clear trend is established or after a pullback occurs.
In other words, if the trend is determined to be bullish, the choice becomes whether to buy into strength or buy into weakness. If you decide to get in as quickly as possible, you can consider entering a trade as soon as an uptrend or downtrend is confirmed. On the other hand, you could wait for a pullback within the larger overall primary trend in the hope that this offers a lower risk opportunity.
There are many indicators that can fit this bill. However, one that is useful from a trading standpoint is the three-day relative strength index , or three-day RSI for short. This indicator calculates the cumulative sum of up days and down days over the window period and calculates a value that can range from zero to If all of the price action is to the upside, the indicator will approach ; if all of the price action is to the downside, then the indicator will approach zero.
A reading of 50 is considered neutral. Generally speaking, a trader looking to enter on pullbacks would consider going long if the day moving average is above the day and the three-day RSI drops below a certain trigger level, such as 20, which would indicate an oversold position. Conversely, the trader might consider entering a short position if the day is below the day and the three-day RSI rises above a certain level, such as 80, which would indicate an overbought position.
Different traders may prefer using different trigger levels. In fact, the three-day RSI can also fit into this category. In other words, a trader holding a long position might consider taking some profits if the three-day RSI rises to a high level of 80 or more. Conversely, a trader holding a short position might consider taking some profit if the three-day RSI declines to a low level, such as 20 or less.
Another useful profit-taking tool is a popular indicator known as Bollinger Bands. A trader holding a long position might consider taking some profits if the price reaches the upper band, and a trader holding a short position might consider taking some profits if the price reaches the lower band. A final profit-taking tool would be a " trailing stop. There are many ways to arrive at a trailing stop.