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Support and resistance is one of the most common methodologies used for trading. It is used for a variety of different asset classes and in this article, I'm going to share how this concept can be applied to accurately pick areas from which to trade in the markets.
First I'll start with some definitions.
This is a level that we expect price to reach but not break beyond. Notice I said "break" and not "close". Price can close beyond support and the level remain intact. I will explain in more detail later. Essentially support acts as the floor for price and when price reaches it, we do not expect it to move much lower if it holds. We look to buy at support.
If support is the floor then resistance is the ceiling. We expect price to reach this level but not break higher. We would look to sell from resistance.
Finding The Levels
Much like supply and demand which I've written about before, we are looking to trade away from support and resistance. We only want to trade the best setups so that means learning to identify major support and resistance levels. Minor support and resistance levels will still often produce a reaction but to have the odds in our favour as much a…
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AAAnya avatar
AAAnya 16 June


Yonggi7 avatar
Yonggi7 20 June

Well done!

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Emotions in Forex trading generate uncertainty that gradually grows into fear and mood of panic. Yielding to the effects of momentary impulses, the trader undertakes a series of unreasoned actions that manifest in the following:
  • Opening of unreasonable transactions;
  • Premature fixation of profit;
  • Dragging of stop losses;
  • Non-compliance with money management.

The consequences of such behavior are manifest in the loss of a deposit due to erroneous management of trading process caused not by the absence of knowledge and skills but rather by the inability to control himself.
REASONS FOR OCCURRENCEIt is possible to learn emotions management in Forex trading only when you understand the nature of their occurrence. Several factors that force a person to yield to uncontrolled impulses can be singled out.
  1. The absence of final satisfaction - chemical reactions that occur in the body after discharge of adrenaline produce narcotic influence that can not satisfy.
  2. Addiction - continuous yielding to the influence accompanied by the discharge of dopamine into blood, a person becomes addicted to this condition.
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Sebine avatar
Sebine 18 Apr.

Good job and good luck:)

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Remember the phrase “Greed is good” from the movie “Wolf of Wall Street” by Michael Douglas? Well, it depends on how greedy you are and how you handle your greed.
While we do not froth on the mouths like hyenas or drool like Komodo dragons, we all have some level of greed in us. You might say that greed is what makes us competitive to some extent. However, when combined with stupidity and fear, you will never be a successful trader.
Been in the FX markets since 2009, I have gone through all the emotions as every trader needs to, and to be honest lost 100% of my first real account to stupidity and 80% of my second real account to greed and fear. I am not saying how many demos I have lost. All I am saying is, I should change my middle name to “Margin Call” . Using examples from FX charts, I will walk you through these 3 trade killers.
Stupidity in trading can be defined as doing something you know you are not supposed to be doing. An example is opening a position without a stop or trailing stop or ‘believing’ that market sentiments are wrong. Another case of stupidity in trading is not believing in the market's "self-fulfilling prophesies".
The memory of Black Thursday 201…
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Olga18375 avatar

Good work!

anna_t avatar
anna_t 10 Feb.

haste - makes waste?

VictoriaVika avatar

Good article, many useful information, well done.

Natalia_Kisenko avatar

Well done!

pipx avatar
pipx 20 Feb.

anna_t very true haste makes waste. Sorry for the late reply, I thought I had replied.

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If you want to be a professional forex trader, you should have known the basic reasons of loss in forex trading. If is very simple to identify for you if you have been trading in the trading market for six or more months. You can find out many causes of getting loss if it is asked to you. However now i am trying to remind as you know.(a) Using high leverage in trading.(b) Lack of knowledge in forex trading market.(c) Lack of Patience during trading hours.(d) Having greed in trading.(e) Lack of proper education relating forex trading market.(f) Lack of analytical abilityAny trader can tell you one by one if you ask him in this way. However there may have many other reasons for getting loss in forex trading market.Although Many traders being informed about these reasons they can not make profit consistently. Obviously there is something more except above. Now i would like to share you something which i have already observed during my trading hours. I think big portion of new traders can not find out the exact reasons that, "Why is he making loss consistently?". Even many advanced traders do not care of the reasons.Now i am trying to disclose three reasons respectively below1). Tryi…
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Delossan avatar
Delossan 10 Apr.

(c) Lack of Patience during trading hours and (d) Having greed in trading. Invisible enemies. Good article+

Efegen avatar
Efegen 10 Apr.

Yep indeed a lesson i learned sadly+1

scramble avatar
scramble 11 Apr.

lack of patience is my worst enemy. not just lack of patience... it's way more complex: waiting an entry which never come, pressure increase, so getting a wrong entry, price reverse, pressure already high keeps increasing, cut the loss, just to see price turning at entry later.

Likerty avatar
Likerty 18 Apr.

I agree what you say, but actually I often recover lost money imidiately if after triggered stops markets show taht going in oposite direction - I'm rentering in that new direction too:) For me - stop loss is the price of knowing that you are wrong about one diredction but at the same time it prooves that other direction is right:)

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