Forex Signals, Analysis, and Community - since 2008

Forex Q&A

How do I use the basic candlestick alert system?

How do I use the basic candlestick alert system?

The Candlestick Alert System, or CAS, is one of the best free tools available on the internet to help traders spot emerging trend reversals using candlesticks. The basic CAS currently detects shooting stars, hammers, inverted hammers, hanging men and dojis … Continue reading

short squeeze

short squeeze

A “short-squeeze” is a bullish scenario where a high percentage of traders are short in a currency pair when the market begins to move against them (by rising). Since most traders use stop-loss entry orders to limit losses or will … Continue reading

RSI or Relative Strength Index

RSI or Relative Strength Index

RSI or Relative Strength Index is an oscillator that uses the change from one closing price to the next to tell you when a pair is oversold or overbought. Default ranges between 0 and 100, with a value less than … Continue reading

range

range

A “range” is an area between support and resistance where a pair’s price action is confined. For example if the EUR/USD is said to be “ranging between 1.4000-1.4100” then 1.4000 is pair support and 1.4100 is resistance and the pair … Continue reading

rally or rallies

rally or rallies

A “rally” is the opposite of a dip and means when a pair rises on the charts (increasing the exchange rate). Traders frequently wait for rallies to sell in downtrend markets or in oversold markets. This is also called “fading … Continue reading

Pound

Pound

The pound is the British unit of currency (GBP). Also known as cable.

What is a “pip”?

What is a “pip”?

A “pip” the smallest amount by which a currency pair can change (though many brokers now offer fractional pips). Usually equivalent to $0.0001 for US dollar-related pairs. So for example if the EUR/USD goes from 1.4000 to 1.4015 that is … Continue reading

oversold

oversold

“Oversold” is a market condition when a pair has been heavily sold and the pair has subsequently dropped quite a bit. Many traders will look to go long in an oversold market as they believe other traders will have to … Continue reading

over-bought

over-bought

“Over-bought” is a market condition when a pair has been heavily bought and has subsequently risen quite a bit. Many traders will look to go short in an overbought market as they believe other traders will have to go short … Continue reading

Oscillators

Oscillators

An oscillator is a type of technical indicator that typically “oscillates” between 0 and 100 and lets traders know when a pair is oversold or overbought. For example the RSI, or Relative Strength Index, uses the change from one closing … Continue reading

LEGAL DISCLAIMER AND RISK WARNING

Foreign currency exchange trading is highly speculative and is suitable only for those who (a) understand and are willing to assume the risks involved, and (b) are financially able to assume significant economic losses. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. Trading on margin can amplify both gains and losses in your account. Before deciding to trade foreign currencies, you should carefully consider your investment objectives, level of experience, and risk appetite. You should be aware of all the risks associated with foreign currency exchange trading and seek advice from an independent financial advisor if you have any doubts.

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