The rise of the internet has seen more news and FOREX education than ever before become available to traders and it’s available instantly, but it won’t help you make money.

In fact if you try and trade by utilizing news stories you will lose and a simple fact will explain why:

Fact:

Consider this:

50 years ago around 90% of traders lost all their money and this figure remains the same today 90%.

This is despite the huge range of new tools and breaking online news that is available to help traders – the ratio still remains the same.

The reason for this is an important part of your FOREX education:

Markets move to the following equation

Market fundamentals + Investor Perception = Price movement.

We all see the news but it is the way all the investors interpret it that is important.

The market is a discounting mechanism and all the news instantly is reflected in the fundamentals.

If you see experts talking on the TV or writing stories, then this information is discounted – The arguments may sound convincing, but that is what the media does sell stories.

The experts who put out stories are not traders and their more often than not dead wrong.

If it was easy to trade off news stories, a lot more traders would make money and the fact is they don’t.

By listening to the news and acting upon it you will lose.

Let’s go back to the equation:

Market fundamentals + Investor perception = Price movement

As the market is instantly discounting news we can simply assume all fundamentals and news is instantly reflected in price action.

All you need to do is follow price action and focus on investor perception of the fundamentals.

This makes a technical approach ignoring the news the best way to trade the markets.

As investor psychology is constant, repetitive chart patterns can be spotted and acted upon.

If you try and use the news you will simply lose.

Consider the fact that markets collapse when the fundamentals are most bullish and rally when they are most bearish and you will see that trying to act of the news is a waste of time.

How many times do you see a market ignore the news and go the other way?

It happens all the time.

Will Rogers famously said:

“I only believe what I read in the papers”

He was joking, but many FOREX traders actually do believe what they read and think they can trade off it and lose.

The market is a discounting mechanism and trying to trade off news stories will most likely see you fail.

So if you want to make money trading FOREX keep in mind this important bit of FOREX Education

Understand the past, think in the present and look to the future.

You can do this by simply following technical analysis and see future trend changes people listening to the news will never see.

So, of all the business opportunities and investment opportunities you want to learn how to trade futures markets and actually make money doing it?

Maybe you are sick of your 401K doing nothing or hearing the whole diversify garbage many so called experts throw at you?

Maybe you are just bored and looking for something you can enjoy and get into? Well learning how to trade futures is an exciting ride, but if you treat it improperly, it will eat away your nest egg in a hurry.

Many a trader has washed out in a hurry watching thousands of dollars whisk away within minutes to days on one trade alone, while the pros are laughing all the way to the bank because some sucker just handed them their money on a stupid trade.

It’s like in Vegas Vacation where the Black Jack dealer tells Clark W. Griswold after losing numerous hands at black jack, “Why don’t you give me all your money, we’ll go out back, I’ll kick you in the nuts, and we’ll call it even?” and then laughs in his face.

Well, let’s discontinue this whether you have already lost money or have thought about learning how to trade futures right now!

Here are my top 5 tips to learning how to trade futures the right way. It is trading, not investing, and not gambling. There are very big distinctions but each type of personality seems to creep into the mix.

$$ Have a plan and a system and follow it to the letter. If you want to know how to trade futures like the pros, it is by following a proven system. Not by going with your intuition or your gut, but by treating it like a business.

$$ Discipline is key. Just like Vegas it is easy to get wrapped up in the money and the excitement that a big movement in the markets can bring. Profits are profits are profits. Cut your losses short and be sure to stick to your plan even when the chips are down. Minimize losses and take profits is a great motto.

$$ Education at all costs is the key to learning how to trade futures. I spent a small fortune for me to learn this racket and it was worth every penny. One turn in the wrong direction can lose it all.

$$ Never risk money you can’t afford to lose and never bet more than 20% on one trade. This is call money management and if you don’t have the discipline to follow that, then you will never make it as a futures trader.

$$ Perfect practice makes perfect. Paper trade for a while before you risk any money. Then try the e-mini markets and see what happens. Work with stop losses, entry points, and reading charts. This will provide the confidence you need to throw some money into the game.

Bonus tip: Don’t follow the glitz and glamor of the almighty sales guys. You must trust yourself to make the right decisions. I recently met a full time trader online and he set up a great website and forum to talk about how to trade futures.

The problem was that he was not a salesman or internet marketer and people didn’t seem to stay on his site because the practical information that was being discussed was not interesting enough for people.

He made the comment that if people don’t see the glitz and glamor they don’t stick around. His other point was that good ole fashioned hard work, smart trading, and discipline were what made him successful as a futures trader.

Remember you are up against the pros and you must take this game seriously if you want to make it in this business.

I spent thousands to learn what I am teaching you in this article. This is a start and if you want to get the hang of this racket, I suggest getting some education or coaching.

This way you are the one laughing all the way to the bank!

When searching for Forex information on the internet you are likely to find articles relating to trendlines and trendline analysis.

Tom DeMark is a specialist in the field of technical market analysis and his best-selling book "The New Science of Technical Analysis" released in 1994 spells out some innovative techniques when it comes to the use of trendlines.

Much Forex information on the internet is of a general nature, and many articles are written about Forex by individuals who are not traders themselves. Tom DeMark on the other hand has had a long career with institutions trading stocks, futures, currencies and options.

His guidelines on the use of trendlines are very specific and they can be helpful to the newer trader who is searching for reliable Forex information on how to use standard indicators.

Here is a brief step-by-step description of how to draw DeMark trendlines:

Note: The term swing high and swing low (also called cycle high and cycle low) refers to the following:

In An Uptrend: A swing high is the wick of a candle that is higher than the wick of the candle to the left and right.

In A Downtrend: A swing low is the wick of a candle that is lower than the wick of the candle to the left and right.

Obviously the more candles to the left and right that are higher in a swing low or lower in a swing high makes the swing or cycle more significant.

An uptrend is where price is making higher highs and higher lows. A downtrend is where price is making lower highs and lower lows.

Drawing DeMark Trendlines

Drawing Trendlines In An Uptrend

1. Examine the bottoms of the candles on your chart and identify the most recent candle wick that is lower than the candle wicks to the immediate right and left of it.

2. Look left on the chart, and identify the previous low candle that has candle wicks higher to the immediate right and left of it which is lower than the current low candle.

3. Now draw a line from the current lowest candle to the previous lowest candle (drawing from right to left).

4. Now take the end of the newly drawn line which stops at the current low candle and extend it forward some distance (drawing from the present position to the right).

Drawing Trendlines In A Downtrend

1. Examine the tops of the candles on your chart and identify the most recent candle wick that is higher than the candle wicks to the immediate right and left of it.

2. Look left on the chart, and identify the previous high candle that has candle wicks lower to the immediate right and left of it which is higher than the current high candle.

3. Now draw a line from the current highest candle to the previous highest candle (drawing from right to left).

4. Now take the end of the newly drawn line which stops at the current high candle and extend it forward some distance (drawing from the present position to the right).

You have now drawn a Tom DeMark trendline.

This can now be a reference point for future price action. It will often be observed that price will come and check this level. If it breaks through, it can mean a change in direction, the significance of which will depend on the time frame being used.

Trendlines drawn on 5 minute or 15 minute charts have much lesser significance than trendlines drawn on higher time frames such as the 1 hour, 4 hour, or daily.

Caution Required

Much Forex information extols the virtues of trendlines as an indicator of possible future price action.

Mr. DeMark certainly has made this a science and his detailed approach to drawing trendlines is certainly more accurate than just drawing general trendlines along the bottoms and tops of trends according to the way the eye sees.

However, trendlines in themselves do not indicate where high probability trades can be taken.

It is important to use a variety of indicators before pulling the trigger. Examining previous levels of support and resistance is probably far more significant in determining where price is likely to hesitate that watching trendlines.

However, they can be useful. If you find a key support or resistance level also coincides with a Fibonacci retracement or extension level which is also at an intersection with a trendline, then you have built a reasonably solid case for a trade.

Use this Forex information on DeMark trendlines wisely, with caution, and it can be another useful addition to the Forex day trader's toolkit!

If you want some good FOREX education to help you build and execute a trading method the good news is you don’t have to buy a worthless e-book from a vendor ( with no real time results ) you can get all the info you need free.

Here are some tips on the best FREE FOREX education.

You Need a PROVEN method

This should be technically based.

All you need to do is search technical “analysis of FOREX markets” and “support and resistance” and you will find everything you need.

Once you have done this, you need a methodology to trade with.

The simplest method to understand is:

A breakout methodology search “FOREX Breakouts”

Once you understand the above, you will need to decide if breakouts are valid.

You need to calculate price momentum i.e. is it failing at a breakout, or is it accelerating?

The former indicates resistance or support will hold, the latter it will fail and a breakout occur.

Get a good free chart service like futuresource.com

Pull up the charts on the indicators and look at the studies at the bottom.

There are three that we find useful and you will to – look up their logic and try using them in conjunction with support and resistance.

Price momentum indicators that are good are:

Relative Strength Index RSI and the ultimate indicator for timing trades: The Stochastic.

We also like Bollinger bands for targets and to see volatility

Look up the logic of both. Using these in association with support and resistance is a great way to trade.

Other useful indicators to look at are: Moving averages, MACD and the ADX

Breakouts trading them for profit

It’s a fact that most major moves start from new market highs NOT market lows and that is why a breakout method is so effective.

To check if a breakout will fail or break you simply need to get some momentum indicators to gauge strength of price.

We like the stochastic and RSI, But indicators used are matter of preference.

A SIMPLE METHOD FOR PROFIT The above may sound simple and it is – the best methods are.

You don’t make money in FOREX trading for being clever you get paid for being right.

There is no correlation between how complicated a method is and how successful it will be.

In fact, simple methods are best and you should focus your FOREX education on them because:

They are easy to understand, easy to apply and more robust in the face of brutal market conditions.

The PROOF

We have used a simple system and demonstrated how profitable it can be in numerous articles and we have applied the above tools to spot big moves – check them out.

Before you

Waste money on a worthless e-book from a vendor who has simply put together a system with a simulation of profits (he is probably no smarter than you), take a few hours to research and build your own method.

Keep in mind only you can make yourself successful and if you think you can buy success for $100 or so – think again!

If you do the above, you will have something that you can have confidence in and apply with discipline for profits.

One final point:

When trading breakouts only trade ones that are significant i.e. on weekly and daily charts (forget day trading it doesn’t work)

If you trade only the best breakouts and trade with momentum you will have huge profit potential.

Finally, have patience and only trade the best set ups.

In developing a personal Forex trading style it is likely a trader will experiment with numerous technical indicators over time but eventually end up with just a handful of favorites which are used on a daily basis.

The use of trendlines is taught in just about every training course out there and popular opinion seems to suggest they should take a reasonably prominent place in any successful Forex trading style.

This article begs to differ. Yes, trendlines can be useful but in my opinion they are superseded by horizontal lines.

What is the difference?

Trendlines are simply lines drawn across the lows of bars or candles in an uptrend, or lines drawn across the highs of bars or candles in a downtrend.

One Forex trading style may use the Tom DeMark method of drawing trendlines which gets very specific by joining the most recent low with the previous lower low (looking left on the chart) and then extending the line forward (looking right on the chart) for an uptrend.

For a downtrend join the most recent high with the previous higher high (looking left on the chart) and then extending the line forward (looking right on the chart). These trendlines then give indications of a breakout once they are broken.

Horizontal lines are simply lines drawn across highs and lows on a chart marking support and resistance.

Why are horizontal lines superior?

The ideal Forex trading style is simple and easy to use and it helps if the charts we are studying are clear and reasonably uncluttered.

Drawing numerous trendlines can obscure what is really happening with price action. True, some traders just draw trendlines across main highs and lows and ignore the mini swings. Nevertheless, trendlines have to be constantly re-drawn and updated as price action continues.

On the other hand, just putting in a horizontal line on key levels of support and resistance is simple and easy to see. They have great significance on the higher time frames, especially the 4 hour or the daily charts.

Of particular value is marking the previous day's high and low and watching price action around those levels. It is possible to catch 10 to 20 pips often as price tests the previous day's high or low and pulls back. Of course, the probability of a successful trade becomes higher if the previous day's high or low also coincides with other factors such as a Fibonacci level or pivot point.

Why are horizontal lines probably more significant than trendlines?

When developing your Forex trading style it is very important to look beyond candles. Trading is much more than that. The successful trader understands what is going on behind the scenes. Candles and price action is simply an outward manifestation of what is happening across the desks of thousands of traders across the globe who deal with billions of dollars worth of flows and orders.

A previous high or low in price action, especially on the higher time frame, means that the bulls or the bears won the battle in that trading session. If a number of traders committed a large amount of equity to a currency at a certain price, then obviously that price point is going to be fiercely defended in the future by those traders.

So horizontal lines drawn across levels of support and resistance mark very real points at which we can expect a reaction from price.

Trendlines on the other hand tend to be more speculative in my opinion. Watch price reaction at horizontal lines of support and resistance as opposed to trendlines and you will notice that price respects key levels of support and resistance more often than trendline levels.

Should trendlines be included in your Forex trading style?

That is an individual matter. They can certainly be helpful in offering confirmation of a trade after taking into consideration other factors. But to trade on trendlines alone can be very risky. On the other hand, it is possible to trade almost entirely on what support and resistance tell you at certain times when key levels are being tested.

Generally though, a successful Forex trading style will combine a number of factors. My favorites in order of importance are:

1. Support & Resistance levels on the higher time frames

2. Fibonacci retracement and extension levels

3. Pivot points

4. Candle patterns

5. 200 EMA (Exponential Moving Average)

If you are in the process of developing your own Forex trading style you may arrive at a different priority list. Why not experiment with horizontal support and resistance lines and trendlines and decide for yourself which gives the most reliable indication of price movement?

Here we will look at a trading opportunity we looked at recently and look at two more that are shaping up right now.

Let’s look at them.

Pull up any free chart service such as futuresource.com and add the following indicators:

Bollinger bands, stochastic and Relative strength Index (RSI)

Now let’s look at some trading opportunities – this article is written at 12.AM CET

US V Canadian Dollar

This trade made us some great profits on the downside and now we have taken a contrary trade as we have zeroed in on key support at 1.10

Prices are trying to hold current levels a close below the 1.10 level - negates the contrary trade.

RSI is oversold at 24.38 and stochastics are flat.

We are already long at current levels to enter new positions we look for stochastics to cross with bullish divergence.

Target is the middle of the Bollinger band.

British Pound

We have had a lot of good trades in this currency and made a great profit from the recent breakout.

Prices have pulled back from the highs and another opportunity is presenting itself:

Prices have dropped to the middle of the Bollinger band and started to steady – RSI Has started to rise but stochastic momentum remains down -= The key to this trade is to watch the stochastic

A cross to the upside with bullish divergence should see a quick pop to the highs.

As per usual wait for confirmation of strength before going long.

US Dollar V Japanese Yen

This trade treated us well last time we looked at it and we made a great profit trading the dollar to the long side and were looking to exactly the same again.

Prices broke up above the 120.00 level and prices are testing the breakout point.

If this point can hold and stochastics turn bullish - the bulls will take charge and the US Dollar looks set for strength.

Again, it’s a question of waiting for confirmation before getting in.

Price momentum has not yet turned up so wait for the stochastic to give the signal.

Getting In the market – Confirmation Is The key!

In any trade you attempt, don’t try and impose your view on the market – wait for your view to be backed up by confirmation that price momentum is in your favor.

This will dramatically increase your odds of success.

We love the Relative Strength Index and particularly the stochastic indicator - it amazes me that more traders don’t use them.

If you don’t read our other articles to find out how they can help increase the odds of success in your own trading.

Trading is all about getting the odds in your favor.

For this you need to understand and use changes in price momentum to enter your trades.

Good Trading!

The Forex market, established in 1971, was created when floating exchange rates began to materialize. The Forex market is not centralized, like in currency futures or stock markets. Trading occurs over computers and telephones at thousands of locations worldwide.

The Forex market, which is the exchange of one currency to another, is the largest market in the world trading up to $2 trillion in one single day, to put this number into perspective the New York Stock Exchange trades on average less than 28 billion a day. In dollar volume the Forex market can trade in one week what the New York Stock Exchange trades in one year!

The largest foreign exchange activity is the spot exchange (i.e.., Immediate) between the US dollar and four other major currencies: British Pound, Japanese Yen, Eurodollar and the Swiss Franc. These four currencies are bought and sold against the US dollar.

Up until 1998 this was the exclusive market of the banks and large institutions that traded currencies among themselves, reaping huge profits. Wonder why the Banks and Insurance companies have the biggest buildings downtown?...currency trading.

In a recent article in the Wall Street Journal, Daimler Chrysler made more money in one quarter trading foreign currency than selling cars. Think of it, if the big companies are doing it, it is definitely the trend to follow. Now thanks to the Internet it is possible for fund managers to be involved in the same trading, at their own level...with low risk.

Forex Overview

The global marketplace has changed dramatically over the past several years. New investment strategies are becoming more important in order to minimize risk, as well as to maintain high portfolio returns. Among the most rewarding of the markets opening up to traders is the Foreign Exchange market. Identifiable trading patterns, as well as comparatively low margin requirements, have rewarding trading opportunities for many.

In contrast to the world’s stock markets, foreign exchange is traded without the constraints of a central physical exchange. Transactions are instead conducted via telephone or online. With this transaction structure as its foundation, the Foreign Exchange Market has become by far the largest marketplace in the world. Average volume in foreign exchange exceeds $1.5 trillion per day. This high volume is advantageous from a trading standpoint because transactions can be executed quickly and with low transaction costs (i.e., a small bid/ask spread).

As a result, foreign exchange trading has long been recognized as a superior investment opportunity by major banks, multinational corporations and other institutions. Today, this market is more widely available to the individual trader than ever before.

Spot foreign exchange is always traded as one currency in relation to another. So a trader who believes that the dollar will rise in relation to the Euro, would sell EURUSD. That is, sell Euros and buy US dollars. Forex-Training.com has compiled the following guide for quoting conventions:

Many beginners start out their Forex training by gradually building up a plethora of indicators with charts obliterated with every signal imaginable. No wonder such new traders often freeze with indecision as one signal seems to contradict another.

There is however a very simple indicator, that when fully understood, forms the backbone of all future Forex training and trading! What is it?

Before revealing it, guard against a typical reaction such as: "Is that it? I know all about that!"

This indicator, due to its simplicity, is often under-valued and insufficient time is spent by new traders in their Forex training sessions really getting to grips with it.

Probably The Most Powerful Indicator Of All

Now, what is it?

Support and Resistance!

To state it clearly, your Forex training will only start to really move ahead when you fully understand the impact that support and resistance have on market action. Here is a key principle to understand:

Support becomes resistance. Resistance becomes support.

Why is understanding this so crucial?

Because the thousands of traders in the global market place, handling billions of dollars for the big institutions, are constantly monitoring where price has been before.

If price reached a peak some days ago and has since retraced, that level that was reached becomes a key level of resistance. If you enter a trade anywhere near that level, understand that it will take major buying pressure to get price above that level.

Conversely, if price fell to a deep low within the last week or few days, for price to continue on down there is going to have to be intense selling pressure to pass that level which has now become support.

An Interesting Market Behavior Pattern

But now here is an interesting market behavior pattern you must drill into your brain as part of your Forex training:

Once price does break through that key level of resistance, it now becomes a level of support. If it is a key level of resistance that is broken, once price has moved on through by 20, 30 or 40 pips, it can become major support. What does that mean for the trader?

It is often possible to enter a trade at an optimal point by simply waiting for price to come back to test that strategic level that was broken.

So rather than chasing price and hastily putting a trade in once the market has started to move in a certain direction, wait for price to pull back to that key level that was broken. Put an entry order in at the level and wait for price to pull you in to the trade.

It may continue in the direction for 5-10 pips putting you in deficit but if you have done your research properly and identified this as a key level using other indicators such as Fibonacci or pivot levels, you need not fear. Price will quickly pull back, cover your dealing spread, and from there on you can enjoy the satisfaction of seeing price move toward your price target.

Time and time and time again the market behaves in this pattern. Exercising patience while you undergo your Forex training, and looking out for this particular market pattern can yield huge results.

Understanding support and resistance will give you an unbelievable edge on understanding how the market works. This in turn will help you enter and manage your trades to a highly accurate degree with minimal stops and reasonable, reachable targets.

Rather than trying to hit the home run, by looking at the next key level of support or resistance where price is likely to stall, you can walk away with a reasonable profit by setting your price target accordingly.

Look Under Your Feet

Rather than searching for some complicated, 'advanced' trading system, why not concentrate on what is right under your feet.

Get to grips with support and resistance, learn to quickly identify these levels once you open a chart, draw lines where you can see major support and resistance, especially on the higher time frames, and everything else you learn during your Forex training will fall into place.

Support and resistance is such a powerful Forex signal that without understanding its impact on the market, a trader will probably never master the skills necessary to make profits on a consistent basis.

This Forex signal simply registers where price reached a peak or a low. On a higher time frame these price levels can have huge significance. Why?

Getting Behind The Scene

We need to understand what is going on behind candle patterns and price movements. Imagine thousands of traders coming to their desks each day all around the world and processing orders involving billions of dollars worth of currency.

The price at which they bought the currency now represents a key level for them. They do not want to see price go in the opposite direction or they will be at a loss. So what happens? They do everything possible to protect that price level.

The daily chart is of particular importance when considering support and resistance as a Forex signal. Traders associated with big institutions often refer to the daily chart rather than lower time frames. So price highs and lows on a daily chart can represent key, strategic price levels.

If price reached a high within the last few days, you can be sure a number of traders have millions or even billions of dollars worth of currency tied up at around that level or below it. For price to go above that high there is going to have to be considerable buying pressure from the bulls. Obviously the converse is true when price reaches a new low.

So look at the higher time frames like the daily, and 4 hour charts and identify these key levels of support and resistance. They form a major Forex signal.

Where Price Spends Most Of It's Time

Here is another factor regarding support and resistance that makes it such a critical Forex signal.

Most of the time price moves in a consolidation channel or range. Depending on the time frame you are looking at, it may be a 40 or 50 pip range on the higher levels, and within these larger levels are small trading ranges of 10 to 20 or 30 pips.

Some estimates put the amount of time the market is in consolidation around 60-80%. This means only 20-40% of the time price is actually trending, making new highs and lows.

This piece of information is critical. Once you have identified a trading range (it helps to put lines on your charts marking the high and low of the trading range) you can now manage trades much more effectively.

If you are considering going long and you see price is in a consolidation channel, you will not want to enter near the top of the channel. Wait for price to come back to the bottom of the channel by putting in an entry order and get taken into the trade. This way your stop is closer and your profit potential is greater.

Once price has moved through a major level of resistance, that level now becomes future support. Once price has moved through a major level of support, that level now becomes future resistance.

Include This In Your Daily Preparation

Every day when you open your charts look for this simple yet powerful Forex signal. Mark out your lines of support and resistance on each time frame you use. For example, if you customarily use daily, 4 hour, 1 hour, and 15 minute charts, mark out the key levels of support and resistance. Remember the more candles there are either side of the high or the low, the more significant that level becomes.

Then compare the various time frames and see if any of the levels you have marked coincide. Then look for suitable trading opportunities accordingly.

An effective Forex signal does not have to be complicated. Understanding how support and resistance works can make a huge difference to your consistency as a trader.

Don't pass over it because it is so simple. Remember, in the minds of the traders who pushed price to key levels, and who are defending positions involving billions of dollars, levels of support and resistance are hardly inconsequential!

Why are support and resistance levels crucial when participating in the Forex day trading market?

Simply put, they represent key, strategic price points at which traders processed orders involving millions or even billions of dollars. No wonder price at times has a hard time getting past a previous high or low. Those levels are being fiercely defended by traders who have large amounts of money at stake and who do not want to see price break those levels.

For this reason anyone who engages in Forex day trading should learn how to trade support and resistance. The following checklist provides crucial guidelines:

1. Support and resistance levels are much more significant on the higher time frames. Pay particular attention to price highs and lows on the daily chart as this time frame is commonly used by big traders.

2. A price high or low has more significance when it has a number of candles either side of it which are lower (in the case of a price high) or higher (in the case of a price low).

3. Before you consider Forex day trading at a support or resistance level, see if there are more factors that would indicate this is a key price level.

For example, does a trendline intersect at the same point? Does the support or resistance line match up with a Fibonacci level, either a retracement or an extension? Does the support or resistance level coincide with a pivot point if you are in the practice (and it's a wise one) of calculating pivot levels when Forex day trading?

4. Has a key support resistance level been broken? Then look to see if price will come back to test that level. Remember, resistance once broken can become support in the future and support once broken can become resistance in the future.

These Forex day trading scenarios can present excellent trading opportunities as you put an entry order in at the key level and wait for price to come back and pull you in. Within a short time your dealing spread is covered and you are in profit.

5. The market spends most of its time in trading ranges or consolidation channels. You need to accept that this is a characteristic of Forex day trading and adjust your mindset accordingly. Identify the high and low of the trading channel and manage your trades accordingly.

6. After identifying a trading channel or range and you see a trading opportunity, set your entry level at the base of the channel if you are going long or at the top of the channel if you are going short.

Don't chase after price once it breaks out of the channel (although many who engage in Forex day trading do so). You will not get the optimal entry point. Waiting for price to take you in either at the top or bottom of the channel means you can have a smaller stop and your price target is closer.

7. Pay particular attention to the previous day's high and low. Price will often hesitate and retrace at these levels. If you are a Forex day trading scalper, you can often grab a nice pull back of 10 pips or more at these strategic levels.

Note: Although there are various ways to calculate the previous 24 hour period depending on where you live, using GMT as a standard is often beneficial. Midnight GMT is a time when the market is generally very quiet and unlikely to make new highs or lows.

Succeed Or Fail?

It is unlikely you will succeed at Forex day trading if you fail to understand or take into consideration support and resistance. This indicator is that crucial! Yes there may be fancy indicators out there with all the bells and whistles, but this simple indicator, marking where price reached a high or low during previous trading sessions, can be one of the most powerful and effective Forex day trading tools available.

Be sure you spend sufficient time studying it, examining your charts, marking off the key levels each time you begin a new Forex day trading session.