Newbie trader, this one is for you and maybe a couple of traders who still aren’t too sure of their trading skills or whether or not their strategy still works!
Here is one thing we should always remember about the Forex markets – the Forex markets are a game of probabilities and as much as we want to win every single trade, unfortunately, it is merely impossible. IMPOSSIBLE!
In all markets, prices are governed by the laws of supply and demand. As Forex traders we must understand these forces and how they relate to our analysis of the market.
Supply represents selling within a market and demand represents buying, thus supply and demand are all about the interaction between buyers and sellers.
Profitable trading strategies are usually extremely simple. Fibonacci is one of the easiest forms of technical analysis to grasp which is why today I will show you a Fibonacci Forex strategy.
What is the basis of Fibonacci trading? These levels are calculated relative to the size of the previous move i.e. the value from one swing point to another.
A swing high refers to a price peak formed by the market before moving lower. A swing low refers to a price trough formed by the market before moving higher.
Swing points are found on all timeframes and all Forex pairs.
The ADR (Average Daily Range) is sometimes called the ATR (Average True Range) depending on your platform but don’t worry THEY ARE THE SAME.
The ADR is an indicator that does a simple calculation of the average movement of price within a day over a number of days (or periods).