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200-Day Moving Average – the number one Forex indicator

200-day EMA Forex indicator

200-day EMA (Exponential Moving Average) is my favorite Forex indicator and it’s used by many PRO traders. It’s not just a simple indicator that shows the average price of a currency for last 200 days. It’s also not an indicator I put on my charts together with other moving averages and wait for a cross-over to enter a trade. It’s more than that! I love trading Price Action but I couldn’t do it without the 200-day EMA. Here is how I use it:

1) As a trend identifier – If you see the candlesticks above 200-day EMA, you are in an uptrend. If the candlesticks are below the EMA indicator, we are talking about a downtrend. If the candlesticks are close to EMA, the trend is weak and if the candlesticks are far from the EMA line, we will say that we see a strong trend:forex-uptrend

forex-downtrend

2) As a support/resistance level – Yes, you can draw your own S/R lines, but 200-day Moving Average is used by many professional traders and it can be used a strong S/R level.

NOTE: I also use 100-day EMA for this!!!

forex-support-resistance

3) As a reversal signal – If you see candlesticks move through a 200-day Moving Average, this can be used as a signal that the trend is reversing:

forex-trend-reversal

Make sure you use EMA and not SMA (Simple Moving Average) because EMA is more responsive and more accurate.

Price Action – the first thing you have to learn!

What is Price Action?

Price Action is a change in the value of a currency pair over a period of time and it can be seen on a chart. The first thing you need to learn is to read these charts…to read Price Action! You can fill your MetaTrader 4 platform with hundreds of top-notch indicators but if you don’t understand what’s happening on the charts, you will fail and lose money. Indicators are great but I only use them to confirm the direction of a currency price. The best way to learn about Price Action is to learn the basics and spend hours and hours trading clean charts with no indicators. I didn’t want to record my own video about Price Action because there are a few PA experts who are much better at teaching than myself, so I decided to share their videos and articles (and some other resources) instead:

Forex Price Action Articles:

A Beginner’s Guide to Forex Price Action Trading by Nial Fuller

Beginners Guide To Price Action Trading by Nial Fuller

Price Action Trading Patterns: Pin Bars, Fakey’s, Inside Bars by Nial Fuller

Pin Bar Forex Trading Strategy – Pin Bar Definition by Nial Fuller

Beginner’s Guide To Reading Price Action by tradingsetupsreview.com

Instantly Improve Your Trading Strategy with Support and Resistance by tradingsetupsreview.com

4 Ways to Trade a Channel by tradingsetupsreview.com

Forex Price Action Resources:

Chris Capre’s forex trading courses help accelerate your learning curve to profitable trading. If you are looking for forex trading strategies that work, start your forex training with his FREE Beginners Course. You can also watch his recorded webinars on FXStreet or read his thread about Price Action on BabyPips. He is one of the best Price Action experts!

Nial Fuller is also one of the professional Price Action traders and mentors – make sure you visit his “Learn To Trade The Market” blog!

Forex Price Action Videos:

BabyPips School review

Did you already open a practice account? Have you installed MetaTrader 4? Great!!!

Next thing you should do is to learn a few basics about trading, buy some Forex books for a few hundred dollars and pay someone $500-2000 for their “HOLY GRAIL” trading system. After 5-10 weeks you will be a PRO trader, you will start making thousands of dollars per month, quit your job and buy a nice house on the beach. Right??? WRONG!!!

I am still a newbie trader but I talk to PRO traders every day. One of the first things I learned from them is that it takes years of trading to finally become a Forex professional. Forex is not some get-rich-quick scam. Forex is a business…it’s a job! Every job requires practice and experience: if you start working for an IT company you will have to spend years and years learning and programming and whatever. You have the same situation in Forex.

The second thing I learned from other traders is that all the information you need about trading is free. There is nothing wrong with people who sell their Forex trading systems, books and courses. Trading does not require a lot of time if you know how to trade, so these PRO traders have enough free time to write books about Forex, make Forex courses and sell them to make even more money. But if these traders are successful with their trading techniques, that doesn’t mean you will also be successful. Every trader is different! That’s why you shouldn’t spend money on Forex education and system. You should learn the basics, practice, practice, practice and, in the end, build a trading system that fits you. But what’s the best place to learn the basics?

BabyPips School of course!!!

That’s why I wrote this review! BabyPips is a place where you can find a huge amount of Forex trading information. They are number one resource when it comes to Forex education. The most important part of BabyPips is their Forex school. The BabyPips School allows you to start in preschool and work your way through “forex college”. Of course, you will never get a trading degree, but when you finish the school you will have a lot of knowledge about trading and you will know what to do next.

BabyPips School is completely free and you will learn all the basics you need to start trading. It looks like any classrom session: you finish the chapter and you get a test after that. The school is also very funny so you will never feel bored reading it. And if you have some questions, you can simply go to their forum and ask other members.

BabyPips School review

How to install MetaTrader 4?

So, you found a Forex broker with New York close charts? Next, you should learn how to install MetaTrader 4. MetaTrader 4 is a program you will use to buy and sell currency pairs. If you have an account at FxPro, simply go to their website and download MetaTrader 4. Go to directory where you downloaded it and run the setup file. Just click “Next” on the following screen:

How-to-install-Meta-trader-4-picture1After that, the license agreement will appear. Make sure you check the “Yes, I agree with with all terms of this license agreement” option and click “Next” to proceed:

How-to-install-Meta-trader-4-picture2

Next window will appear giving you the option to accept default installation folder or choose another one. You can also choose if you want to create a desktop shortcut and to launch the MetaTrader 4 after installation. These options are selected by default but you can uncheck them if you want.

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Next window will appear showing you the installation progress. After all the tasks have been completed click on “Finish”.

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After you run MetaTrader 4, a window will appear inside it, asking you to open a new account. Fill in the required information (name, adress, city, zip code…), select the account type, leverage (1:100 is my favorite) and deposit amount. The account will automatically be the demo account where you can trade without risking your own money. Make sure you check the “I agree to subscribe to your newsletters” option and click “Next” to complete the installation process.

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Congratulations – you learned how to install MetaTrader4. After the account is created, the charts will open and currency prices will start updating. Start playing around, make a few trades, look at the charts and try to figure out where the price will go next. One of the most important things in Forex (and every other job) is practice. So…practice, practice, practice…trade, trade, trade!!!

 

Forex brokers with New York close charts!

Why do you need a Forex broker with New York close charts?

When you start the trading software of different Forex brokers, not all the charts will be shown in the same way and this can be very confusing. If you plan to become a price action trader (we will talk about this later), the inaccurate charts will make your trading harder. Looking at the charts, you will actually read the markets and that’s why it’s so important to have a Forex broker with New York close charts. My favorite broker with New York close charts is HotForex but you can find more Forex brokers like this one.



New York close – what does it mean?

This means that a day ends at 4:59 PM eastern time and a new day begins at 5:00 Pm eastern time. It’s when a new daily candle is started and the previous candle ends. We will talk about candles later, but here is an example of a daily Forex chart with 16 candles – each one of them represents 1 day:

forex-candles

Since the New York market doesn’t open up until Monday, there will only be 5 candles weekly on a daily chart and that’s just what we want. If your chart shows 6 candles weekly you know that’s not a New York close chart. The reason we don’t want to see 6 candles is because the 6th candle represents one part of Sunday and Sunday is not a full trading day. There is also a very low volume of trades on Sunday. That’s why I love when Sunday and Monday candles form into one.

Why do I trade New York close charts?

The main advantage of trading the New York close charts is because everyone else uses them when it comes to price action trading. That’s almost a general rule of trading! The New York close charts are also the most reliable charts to trade. If you don’t use them, you will look at different candles then everyone else and this can lead to confusion and losses. You will also have a problem comparing your charts with someone who uses New York close charts. You might see the perfect trading opportunity on your chart, but on a New York close chart there is nothing that looks close to your chart. This will give you a false signal and you will lose money.

You need the most accurate charts if you want to be successful in Forex trading and the New York close charts will give you this opportunity.

Now, go to HotForex (this is a new york close charts broker I’m trading with) and open your account or simply go to Google and search for:

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