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Posts by Naomi Muhiu:

Types of Financial Market Orders | When Should I Place My Trades?

Types of Financial Market Orders | When Should I Place My Trades?

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The market is open! You have analyzed your favorite pairs, identified trend and a preferred entry point. But how the hell do you ensure price doesn’t pass you by while you rush for a cup of coffee/responding the emails you’ve been putting off for days!? Pending orders! Oh, wait a minute, you like the current price? Lucky guy! Market order/ instant order it is! In this article we will discuss market, limit, and stop orders. Each type serves a unique purpose and can be used in different market conditions to help you make informed decisions.

Market orders are used to buy or sell securities at the best available price. When a market order is placed, it is immediately executed at the current market price, regardless of whether it is a buy or sell order. This type of order is often used when a trader needs to quickly enter or exit a position. Pending orders comprise of limit (buy/sell limit) orders, and stop (buy/sell stop) orders.

Limit orders are used to buy or sell securities at a specific price or better. For example, you may place a buy limit order at $50, which means that the order will only be executed if the price falls to $50 or lower. Conversely, a sell limit order would only be executed if the price rises to the specified level or higher. Limit orders are often used to protect against downside risk or to capture gains in a rising market. In simple terms, the very concept of buy low, sell high!

Stop orders, also known as stop-loss orders, are used to limit potential losses in a trade. A stop order becomes a market order once the specified price is reached. For example, a trader may place a sell stop order at $50, which means that the order will only be executed if the price falls to $50 or lower. This type of order is often used to protect against potential losses in a falling market. Orders are often placed in the direction the market is trending, higher for a buy stop, lower for a sell stop.

In conclusion, market, and pending (limit and stop) orders are all useful tools that you can use to manage risk and achieve your investment objectives. A good understanding the different order types, when, and where to use them is an important aspect of successful trading and will help you make more informed decisions and better navigate the ever-changing world of financial markets.

Financial Markets 101: A Beginner’s Guide to Understanding and Investing in Financial Markets

Financial Markets 101: A Beginner’s Guide to Understanding and Investing in Financial Markets

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Financial markets can seem intimidating to those who are new to investing, but understanding the basics is crucial for making informed investment decisions. In this article, we’ll provide a beginner’s guide to financial markets, including an overview of different types of financial instruments and tips for getting started.

First, let’s define what financial markets are. Simply put, financial markets are platforms where financial instruments, such as stocks, bonds, currencies, and commodities, are bought and sold. Financial markets facilitate the transfer of funds between borrowers and lenders and allow for the creation of financial instruments.

There are various types of financial markets, including the stock market, the bond market, the commodity market, and the foreign exchange market. Each market has its own characteristics and risks, and it’s important to understand the differences before choosing where to invest.

Before getting started in financial markets, it’s important to have a clear investment strategy. This may include setting financial goals, determining your risk tolerance, and diversifying your portfolio to spread risk. It’s also a good idea to educate yourself about financial markets and the specific instruments you’re interested in investing in.

Finally, consider seeking the help of a financial advisor or broker. These professionals can provide valuable guidance and insights on financial markets and help you create a solid investment plan.

By educating yourself, setting clear financial goals, and seeking professional help, you can feel confident in your financial market investments. We will delve more into specific assets in consequent articles.

London Breakout Free Indicator and Strategy

London Breakout Free Indicator and Strategy

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London Breakout is one of the best trading strategies among hundreds of others that we have in the Forex Market. The London Breakout Strategy calls for traders to buy or Sell a currency pair on its breakout from the previous Tokyo trading range. The strategy only emits one signal each day at 08:00 London time since that’s when the London trading session begins.

The indicator will indicate whether to place a sell order, buy order or to not trade. Furthermore, the London Breakout indicator will provide you with the precise entry, stop loss (aggressive and conservative), and take profit levels (aggressive and conservative). All this is displayed on the chart that you deploy the indicator to.

The London Breakout Indicator system will give you trading signals that you can take as they are or add your own additional chart analysis to further filter the signals that are recommended. Although traders of all experience levels can use this system, it may be beneficial to practice trading on an MT4 demo account until you are consistent and confident enough to start.

It is recommended to use London Breakout indicator on GBP currency pairs namely GBPUSD, GBPJPY, GBPCAD, GBPAUD, GBPCHF and GBPNZD for best results. In my own experience, it’s easy to use on M15 but works the same on any time frame below H4.

Rules

  • Open your charts just as the London market is about to open. Make sure all six GBP crosses (GBPUSD, GBPJPY, GBPCAD, GBPAUD, GBPCHF, and GBPNZD) are set to the H1 time frame.
  • Change the Tokyo start/end time and London start time according to your broker’s time.
  • At 08:00 London time, the market opens, the indicator will move. It will call one of three things: a “Long Trade” opportunity, a “Short Trade” opportunity, or “No Trade.” If there is a trading opportunity, it will also display the entry point, stop loss, take profit and lot size levels.
  • Before placing a trade, check the market trend indicator to see if the chart is up, down, or trendless.

Trade only if the breakout occurs before the countdown expires and the breakout occurs in the direction of the indicator. If these two conditions are not met, do not place a trade.

LondonBreakoutStrategyDownload
One minute forex scalping strategy using trend lines and pin bars.

One minute forex scalping strategy using trend lines and pin bars.

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The 1 minute forex scalping strategy with pin bars and trend lines is, in my opinion, one of the best forex scalping strategies you can use.

We tend to use it in combination with multi time frame forex trading to trade on longer mt4 time frame trading setups and we can tell you that it is a fantastic forex trading system to use simply because its stop loss is set a short distance away, and as soon as you enter buy or sell, the price moves away quickly, which means that your open trade wastes no time in making a profit and if you are wrong, a small loss.

Requirements

  • 1 minute timeframe, but you can also used in the 5 minute timeframe.
  • Can be used on any currency pair with low spreads, preferably Major Pairs.
  • Timeframe: London and US session.
  • Know how to draw trendlines.
  • Identify pin bars, otherwise use a forex pin bar indicator.

Sell entry rules

  • Identify the swing high on the chart and use two points (numbered 1 and 2 on the chart below) to draw your downtrend line.
  • Wait for the price to reach the trend line and when it does, look at the candlestick chart pattern to see if it has a bearish pin bar shape.
  • At the close of the bearish pin bar, you can sell immediately on the market order or place a pending sell stop order one pip below the low of the bear pin bar.
  • Place your stop loss at least five pips above the bearish pinbar.
  • To take profit target Risk: Reward (R:R) of 1:3 or if there is a previous low chart that has Risk: Reward (R:R) of 1:3 or more if price made it then use as your target profit (TP) level.

Buy entry rules

  • Identify the chart lows and use two points (numbered 1 and 2 on the chart below) to draw your uptrend line.
  • Wait for the price to reach the trend line and when it does, look at the candlestick to see if it is a bullish pin bar.
  • At the close of the bullish pin bar on the chart, you can immediately buy the market order or place a pending buy stop order one pip above the high of the bull bar.
  • Place your stop loss at least five pips below the low of the pin bar.
  • To take profit aim for risk:reward (R:R) of 1:3 or if there is a previous swing on the chart that has risk:reward (R:R) of 1:3 or more if price reaches use that as your profit target level (TP).

Drawbacks of the 1 minute scalping strategy using pin bars and trend lines.

False price spikes can hit your stop loss (SL) and you will then see the price move in the exact direction of your lost trade.

It tends to underperform in the flat or ranging market, so you need to make sure the market is trending well before using this system.

If spreads increase, you will need to increase the distance of your stop loss and not place it too close to the entry price level of your trade to avoid getting an early stop in your trade.

Time for Economic Safe Havens? Forex Weekly Forecast ( DXY, XAUUSD)

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DXY

The dollar has had a rather bullish week start of March. This was especially accelerated by the non-farm payroll (NFP) released on Friday where we had the employment numbers change from 481k to 678k and the unemployment rate reduced by 0.2%. This has made the DXY continue soaring higher since breaking the resistance zone around 97.465. As we move on to the new trading week awaiting J. Powell’s testimony on Semi-Annual Monetary Policy report the next level of significance to watch-out for is 99.925

XAUUSD

On gold our sentiment from last week continue. We were able to get in on a long position at 1936.220 on retest of the level. Still holding on to the position. Presently we see another entry opportunity present itself (c) on the retest of the resistance level at 1979.076 with the target around 2065.447 which is rather significant as price last tested the levels on August 2020 which would make this the ultimate upturn of the longer term downtrend on the pair between 2020 and 2021.

 
 
Trading Gold Amidst Political Unrest (XAUUSD Forecast)

Trading Gold Amidst Political Unrest (XAUUSD Forecast)

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Last week we discussed gold as XAUUSD approached 1912 resistance level looking to pick up long positions. On Thursday we observed a major rejection spike on the daily with the bears trying to push price lower still. Start of the new week the bulls make another attempt to break this level to push price higher.

Keep in mind it is a very volatile time in the market hence it’s important to wait for a retest of supply zones before getting into a position. An important level to note on the pair is 1973.935 which marks the highest high last week and coincides with a previous resistance zone last tested mid September 2020.

The two possible entry points on the pair are;  a) a retest of the downward trendline. b) A clear break and retest of the resistance zone around 1912 with a stop loss 1ATR below previous support. My bias remains long as long as price does not break beyond the upward trendline on the daily. Remember, for early entries track price on the lower timeframes as well. Leave a comment and let us know what your thoughts are on the pair.

XAUUSD Bulls Incharge? Gold Weekly Analysis

XAUUSD Bulls Incharge? Gold Weekly Analysis

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As we come to the close of the trading week we see gold definitively break out of the consolidation zone to the up side. As mentioned earlier this is the signal we had been waiting for to pick up long positions on gold. On Tuesday XAUUSD retest the downward trendline which provided for an aggressive entry point at 1889.800.

Now towards the end of the trading week, the pair is approaching a resistance zone at 1916.502. On the break and retest of this level we’d be looking to pick up long positions targeting 2035.662. Overall on the weekly chart we look at this as a continuation of the long term bullish trend on the pair.

Heading to the NewYork session what’s your sentiment on XAUUSD?

Forex Market Forecast | Top Pairs ahead of NFP Release XAUUSD, EURUSD, GBPUSD, USDJPY, GBPJPY

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This week we are looking at a very eventful week over all in the markets. Most of the setups we were watching last week and the week before we anticipate to get some entries this week.

DXY

The dollar index is showing a lot of dollar strength ahead of the trading wee. Last week we had a break of the previous high/resistance of the ranging zone around 96.900 which we’re looking at a retest within the trading week before trending higher. We also have NFP release come Friday amongst other economic news.

EURUSD

For the pair similar to DXY we’re looking at the same kind of setup with a potential short entry at 1.11865 with SL above previous resistance.

GBPUSD

The pond strength has really dwindled against the dollar causing the pair to fall back into the channel we had been trading for the better part of late December early January. We had a break of the top of the channel for which we were waiting for a retest around 1.36200 to pick some long positions. Price instead broke back into the channel continuing the long term sell. We are looking to get in on short positions with our target around the 1.31898 support zone. Entry triggers within the channel would be retracement for retest of demand zones or break and retest of minor trend lines on lower time frames (flag patterns).

XAUUSD

Gold against the dollar the hasn’t been much change in the pair’s performance since our Friday analysis. We’re still waiting and watching for a definitive break of the confluence support zone around 1787 to have price fall back up into the consolidation zone, or a break out of it to catch some pips on the sell side. Until then, we are indifferent on the pair.

GBPJPY

Pound Yen, if you have been following our analysis on this pair over the weeks then you may have caught an early around entry around 157.100. We are now looking at a retracement around 155.270 which provides for another entry continuing the trend down. Remember it’s important to look for confluence in lower time frames to get better entries on your trades.

USDJPY

With the dollar strength, USDJPY seems to continue it’s long-term uptrend. Even so, there are no clear entry points for us until the pair breaks the resistance level around 116.340. However looking at the Fibonacci retracement we see a retest of the 61.8% level at 115.257 for an aggressive entry, remember to look for confluence in lower time frames. Another entry would have been at 114.683 at the open of the first bear candle that forms after the break of the downward trend line

Gold Bears/Bulls who takes the Reigns with the Dollar Fluctuating? XAUUSD Analysis

Gold Bears/Bulls who takes the Reigns with the Dollar Fluctuating? XAUUSD Analysis

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Gold has been consolidating within a wedge for the recent past and the trend traders have not really had a chance to get into any positions. The dollar has had some major boosts as well as letdowns from a fundamental perspective in regards to the economic status of the country which has led to the pair being range bound within this wedge.

Yesterday we had XAUUSD test an upward trendline for the forth time at 1792 where it has consistently held forming higher lows since September last year. The bulls on Tuesday this week were also unable to break the downward trendline on the second retest at 1854 causing price to rally back down within the last two days.

As we close the trading week, we await to see whether the trendline will hold yet again and the bulls prevail or price will finally break this level and we may start looking for short opportunities. It is also noteworthy that this level coincides with a support zone on the lower time frames (H4) which makes it of key importance to watch as you trade the pair.

Watching for Major Trend Breakout on EURJPY

Watching for Major Trend Breakout on EURJPY

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Since the the BOJ news release last week we’ve seen a change of tide on the EURJPY where the pair has consistently been making lower lows and lower highs. We are now looking at the pair fall back into a previously persistent range zone for the better part of last month approaching a rather strong support level around 127.530.

Should the pair break this zone, we will register the lowest lows we have seen since January last year and on retest of this it may be valid to watch out for short opportunities.

Important releases to pay attention to is the German manufacturing and services numbers released on Monday that came in higher than expected which is good news for the Euro and we see the currency fight back against the Yen in the wicks registered on Monday and Tuesday. 

However, the Yen is proving to be quite resilient, and attention is on the support levels s1 and s2 before we can pick any positions on the pair.

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