FOREX ECONOMIC CALENDAR

babypips.com's FOREX economic calendar must help you go deep into all the financial events, excepts the heartburn of FOREX analysis paralysis.

By now, you must be up-to-date with the economic events that can affewct the FOREX market. Be sure you also know the way trade them. Then Count on Pip Diddy’s Daily Forex Fundamentals reports to which can help you assess what these trends could mean to your favorite currencies!  Are you thinking to decide for which pairs may be effective to trade? Come on. Search and look for the Big Pippin's blog and check out the setups he spotted on his Daily Chart Art. It might help you actually.

An example is given bellow as you can get it easily.

Trading or GAMBLING!

If you trade without risk management rules, you are in fact gambling.
You are not looking at the long term return on your investment.  Rather, you are only looking for that “jackpot.”
In fact, Risk management rules will not only protect you, but they can make you very profitable in the long run. If you don’t believe us, and you think that “gambling” is the way to get rich, then consider this example:
You can see, the people go to Las Vegas all the time for the purpose of gambling their money in hopes of winning a big jackpot, and in fact, many people do win.
Think a moment, how casinos still making money if many individuals are winning jackpots in the world?

WHAT IS RISK MANAGEMENT?

Risk management: It is one of the most important topics you will ever read about trading.
Can you say what its importance is? Well, we are in the business of making money, and in order to make money we have to learn how to manage risk (potential losses).
Basically, it is one of the most overlooked areas in trading. Many FOREX traders are just anxious to get right into trading with no regard for their total account size.

You can see that, those are simply the determination how much they can stomach to lose in a single trade and hit the “trade” button. There is a term for this type of investing. Do you know what? It is simple, gambling. We are going to describe it bellow.

WHY YOU NEED A FOREX TRADING JOURNAL

What are you thinking about journaling?!?
Isn’t that only for silly high school girls who write about their silly crushes on silly high school boys?
 Umm…. Heck yaaaaaaa!
Ok, not really… high school girls keep DIARIES.
FOREX traders must keep trading JOURNALS. And not only FOREX traders, but all of the traders even a small grocery shop a keep their transactions journal.
Are you thinking that two entirely different things! Get it right! Geez!
 Actually, keeping a trading journal is actually a crucial task in any performance or goal-oriented endeavor. The key is to have some way to measure, track, and stay focused on improving your performance.

HOW TO CREATE A MECHANICAL TRADING SYSTEM

Many times ago, we have facilitate you learn the way develop your trading plan. We’ve also explained the importance of it is for you to discover which type of FOREX trader you are.
Then, we feel the necessary to teach you the way add some meat to your thin trading plan frame by showing you how to create a FOREX trading system.
 Specifically, we would like to teach you all about FOREX mechanical trading systems.
Mechanical trading systems:  This comprises the systems that generate trade signals for a trader to take. These are named mechanical as a trader will take the trade regardless of what is happening in the markets now and then.

KNOW THE DIFFERENT TYPES OF TRADING STYLES

FOREX traders are unique from one another.
More than8 billion people work in this FOREX World (including space aliens disguised as humans) and not one person is exactly the same as another. Even identical twins will have different fingerprints.
Each one has their own look, personality, style, talents, and pizza topping preferences (we like pepperoni and potato chips). We all like different things and are unique in our own way discrete.

WHAT IS A TRADING PLAN?

We already have completed more than half of the way through college, this is one of the most important pieces of advice you should always keep in mind.
Be your own trader.
We can say: Don’t follow someone else’s trading advice blindly! Just because someone may be doing well with their method, it doesn’t mean it will work for you well.
We are going on all in different situations in life, and we all have different market views, thought processes, risk tolerance levels, and different market experiences. You need to have your own personalized FOREX trading plan and update it as you learn from the market.
With rock solid discipline, your trading could look like this.

THE FOREX TRADER’S GUIDE TO MAJOR ECONOMIES

Now, we’re going to make small travel around the world, but it will not take 80 days.
When you’re fast enough to keep up, we can probably get around in just 80 seconds!
…Not!
If, we make you sure that you learn about the nitty-gritty of each major economy and what makes its engine go.

FOREX AND GLOBAL EQUITY MARKETS

Have you ever heard that equity markets can also be used to help gauge currency movement? In a way, you can use the equity indices as some kind of a forex crystal ball.

With the thing idea, what you see on the television, what you hear on the radio, and what you read in the newspaper, it seems that the stock (equity) market is the most closely covered financial market. It’s definitely exciting to trade since you can buy the companies that make the products you can’t live without.

HOW GOLD AFFECTS AUD/USD AND USD/CHF

At first are going to detail the relationship between the com-dolls and gold before. Keep in mind the U.S. dollar and gold don’t quite mesh very well.
Generally, if the dollar moves up, the gold falls.
Here is a traditional logic that during times of economic unrest, investors tend to dump the greenback in favor of gold.
Dissimilar to other assets, gold maintains its intrinsic value or rather, its natural shine!

WHAT IS THE US DOLLAR INDEX?

When you trade stocks, you must be know all the indices available such as the Dow Jones Industrial Average (DJIA), NASDAQ Composite Index, Russell 2000, S&P 500, Wilshire 5000, and the Nimbus 2001. Oh wait, that last one is actually Harry Potter’s broomstick.
Good, when U.S. stocks have an index, the U.S. dollar can’t be outdone. For currency traders, we have the U.S. Dollar Index (USDX).
The U.S. Dollar Index comprises of a geometric weighted average of a basket of foreign currencies against the dollar.
Say whutttt!?! Okay before you fall asleep after that super geeky definition, let’s break it down.
This is very common to how the stock indices work in that it provides a general indication of the value of a basket of securities. Of course, the “securities” we’re talking about here are other major world currencies.

WHAT IS CARRY TRADE?

Have you ever heard there is a trading system that can make money if price stayed exactly the same for long periods of time?
Well there is and it’s one the most popular ways of making money by many of the biggest and baddest money manager mamajamas in the financial universe!
It’s called the “Carry Trade“.

NEWS MAKES THE FOREX MARKET MOVE

This is not sufficient to only know technical analysis when you trade. It’s just as important to know what makes the FOREX market move.

Similar to the great Star Wars world, behind the trend lines, double tops, and head and shoulder patterns, there is a fundamental force behind these movements. This force is called the news!

To assess the importance of the news, imagine this scenario (purely fictional of course!)

Say, on your nightly news, there is a report that the biggest software company that you have stock with just filed bankruptcy.

FOREX MARKET SENTIMENT

How’s Mr. Market Feeling?

Most time, FOREX traders will have an opinion about the market.
“this a bear market, everything is going to hell!”
“Things are looking too bright. I’m pretty bullish on the markets right now.”

Almost all traders will have their own personal explanation as to why the market is moving a certain way.
In trading time, traders express this view in whatever trade he takes. But sometimes, no matter how convinced a trader is that the markets will move in a particular direction, and no matter how pretty all the trend lines line up, the trader may still end up losing.
Most FOREX trader must realize that the overall market is a combination of all the views, ideas and opinions of all the participants in the market. That’s right… EVERYONE.
This comprises the feeling that market participants have is what we call market sentiment.
this is the dominating emotion or idea that the majority of the market feels best explains the current direction of the market.

Congratulations! You Made It!

You would be able to make it!

You’ve already read all six gazillion pages of the School of Pipsology.

 Now, you belong to everything you need to conquer the FOREX world, retire in a year or two, and then go travel the world in your Gulfstream jet, right?

Make a tour on your mind again.

We are sorry to burst your bubble, but you have just barely scratched the surface.

We never sugarcoat things. We told you early on that it was going to be difficult.

When you’re a noob and just finished the School, you’re most likely going to be horrendously bad at trading.

WHAT ARE OPTIONS?

This is very important to get a basic understanding of what options are and how they work before diving into binary options

By tradition, an “option” contract gives the holder the right to buy or sell an asset at a predetermined price within a certain period of time (or by an expiration date). Note that the holder is not obligated to buy or sell at the predetermined price, he merely has the option to do so if he wishes to. That’s why they’re called options, yo!

We found two kinds of options there: calls and puts. And for this brief overview, we’ll only quickly cover the mechanics of option buying.

1.      Call

2.      Buy

FOREX MANAGED ACCOUNTS

Don’t have time to learn how to trade FOREX? Want to be part of the Billionaire’s Club?

If you answered “yes” to these two questions, the FOREX managed accounts scam is the fraud for you!

You can call our hotline at 1-800-4XFRAUDS!

This scam operates by having an investor “invest” with a “professional” trader, who trades the investor’s capital for a percentage of the profits.

This can sound appealing, especially to beginners who have no idea what they are doing or don’t have the time to learn.

They make out, “Well, he’s a ‘professional’ – he must know what he’s doing! It’s 100 times better than if I traded by myself!”

There is a problem that the user is placing complete trust of his/her money into the hands of a complete stranger.

READING THE CORRELATION TABLE

With this knowledge of correlation, let's look at the following tables, each showing correlations between the major currency pairs during the month of February 2010.

The upper table above shows that over the month of February (one month) EUR/USD and GBP/USD had a very strong positive correlation of 0.95. This implies that when the EUR/USD rallies, the GBP/USD has also rallied 95% of the time. Over the past 6 months though, the correlation was weaker (0.66) but in the long run (1 year) the two currency pairs still have a strong correlation.

CURRENCY CORRELATION EXPLAINED

 Did you see that when a certain currency pair rises, another currency pair falls? Or how about when that same currency pair falls, another currency pair seems to copy it and falls also?
If you reply “yes,” you’ve just witnessed currency correlation in action!
And if you say “no,” you need to stop doing less important things like sleeping, eating, playing Candy Crush or Angry Birds, and instead spend more time watching charts.
But, don’t be worried about. We are going to start with the basics and break it down yo…

SCALING IN AND OUT OF POSITIONS

By now, you are able to set proper stops and calculate the correct position size, here’s a lesson on how you can get a little creative in your trading.
As for those trading multiple position sizes, you can get really flexible and creative on how you manage your risk by “scaling” in and out of your positions.
 Do you know what “scaling” is and why you use it?
Scaling never means weighing yourself before, during and after a trade (although it doesn’t hurt to monitor that too!).

4 TYPES OF STOP LOSSES

Come forward to face it. As the market will always do what it wants to do, and move the way it wants to move. In each new second coming is a new challenge, and almost anything from global politics, major economic events, to central bank rumors can turn currency prices one way or another faster than you can snap your fingers.

Position Sizing

By now, you have already learned the hard lesson of trading too big, let’s get into learn properly the usage of leverage using proper “position sizing.”

Position sizing is setting the correct amount of units to buy or sell of currency pair.

This is one of the most crucial skills in a FOREX trader’s skill set, in deed.

IGNORING LEVERAGE: WHY MOST NEW FOREX TRADERS FAIL

Almost all of the  professional FOREX traders and money managers trade one standard lot for every $50,000 in their account.
Whenever they traded a mini account, this means they trade one mini lot for every $5,000 in their account.
Think a moment.
When pros trade like this, why do less experienced FOREX traders think they can succeed by trading 100K standard lots with a $2,000 account or 10K mini lots with $250?
It is not a serious matter what the FOREX brokers tell you. Never open a “standard account” with just $2,000 or a “mini account” with $250. Heck, sometimes you may be able to open accounts with just $25.
The most important cause is new traders fail is not because they suck, but because they are undercapitalized from the start and don’t understand how leverage really works.

TRADING MULTIPLE TIME FRAMES IN FOREX

What the heck is multiple time frame analysis? Multi-time frame ana… WHAT?! Chill out young padawan, it ain’t as complicated as it sounds! You’re almost done with high school – now’s not the time to get senioritis, although you probably got that way back in Grade 12. Ha!

What is a Currency Cross Pair?

Come back to few years ago.
 Then, whenever someone wanted to change currencies, they would first have to convert their currencies into U.S. dollars, and only then could they convert their dollars into the currency they desired.

For example, if a person wanted to change their U.K. sterling into Japanese yen, they would first have to convert their sterling into U.S. dollars, and then convert these dollars into yen.

Whenever the currency crosses invented, individuals can now bypass the process of converting their currencies into US dollars and simply convert it directly into their desired currency. Some examples of crosses include: GBP/JPY, EUR/JPY, EUR/CHF, and EUR/GBP.

What is Fundamental Analysis?

On the way travels, you must come across Gulliver, Frodo, and the topic of fundamental analysis.
Wait a minute…
You have already been provided a teaser about fundamental analysis during Kindergarten! Now let’s get to the nitty-gritty!
Do you the exactly usage of it? Well, fundamental analysis is the study of fundamentals! That was easy, wasn’t it? Ha! Gotcha!
There is really more to it than that.  Really much more than you imagine!
If you hear people mention fundamentals, they’re really talking about the economic fundamentals of a currency’s host country or economy.
The economic fundamentals cover a vast collection of information – whether in the form of economic, political or environmental reports, data, announcements or events.
Even a credit rating downgrade qualifies as fundamental data which do you need to look how Pip crawler turned this news into a winning short EUR/USD trade.

What are breakouts and how can I take advantage of them?

Unlike the breakouts you might have had as a teenager, a breakout in the trading world is a little different!
A breakout happens if the price “breaks out” (get it?) of some kind of consolidation or trading range.
A breakout may also happen when a specific price level is breached such as support and resistance levels, pivot points, Fibonacci levels, etc.
In breakout trades, the goal is to enter the market right whenever the price makes a breakout and then keep it continue to ride the trade until volatility dies down.

Know Your Trading Environment

If two people go to war, the foolish man always rushes blindly into battle without a plan, much like a starving man at his favorite buffet spot.

On the contrary, the wise man will always get a situation report first to know the surrounding conditions that could affect how the battle plays out.

Trading Divergences

How is it if there be a low risk way to sell near the top or buy near the bottom of a trend?
How is it if there be already in a long position and you could know ahead of time the perfect place to exit instead of watching your unrealized gains, a.k.a your potential Aston Martin down payment, vanish before your eyes because your trade reverses direction?
What will be it if you believe a currency pair will continue to fall but would like to short at a better price or a less risky entry?

HARMONIC PRICE PATTERNS IN THE FOREX MARKET

We hope that you know the basic chart patterns down, it’s time to move on and add some more advanced tools to your FOREX trading arsenal.

In the lesson, we are going to discuss on harmonic price patterns. These bad boys may be a little harder to grasp but once you spot these setups, it can lead to some very nice profits!

The whole idea of these patterns is that they help people spot possible retracements of recent trends. In fact, we’ll make use of other tools we’ve already covered – the Fibonacci retracement and extensions!

Combining these wonderful tools to spot these harmonic price patterns, we’ll be able to distinguish possible areas for a continuation of the overall trend.

What is the Elliott Wave Principle?

The Elliott Wave Principle is a detailed description of how groups of people behave. It reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific and measurable patterns.

One of the easiest places to see the Elliott Wave Principle at work is in the financial markets, where changing investor psychology is recorded in the form of price movements. If you can identify repeating patterns in prices, and figure out where we are in those repeating patterns today, you can predict where we are going.

FOREX PIVOT POINTS

Do you feel excitement!  It’s the last year in junior high before you send to high school!
 Pivot points are used by the professional FOREX traders and market makers to identify potential support and resistance levels. Simply put, a pivot point and its support/resistance levels are areas at which the direction of price movement can possibly change.
Do you know why pivot points are so enticing?
It is for their OBJECTIVENESS.

CHART PATTERNS SCHMATTERNS

We hope that you have achieved an arsenal of weapons to use when you battle the market now. In this lesson, you will add yet another weapon: CHART PATTERNS!

Imagine chart patterns as a land mine detector because, once you finish this lesson, you will be able to spot “explosions” on the charts before they even happen, potentially making you a lot of money in the process.

 Before you let a fart explode chart patterns are like that funny feeling which you get in your tummy right

Leading vs. Lagging Indicators

You are provided a lot of tools that can help you analyze potential trending and range bound trade opportunities. Still doing great so far? Awesome! Let’s move on.

We are going to streamline the use of these chart indicators in this lesson.

We desire you to make properly understood the strengths and weaknesses of each tool, so you can determine which ones work for you and which ones don’t.

Come to the some basic concepts first.

 There are two types of indicators:

1.      Leading indicator

2.      Lagging indicator

 Leading indicator

How to Use Bollinger Bands

Congratulations!  You have made it to the 5th grade! Each time you make it to the next grade you continue to add more and more tools to your trader’s toolbox.
“What’s a trader’s toolbox?” you may ask.
 It is simple!
Compare trading with a brick building of home.  Which tools is used to the building? You wouldn’t use a hammer on a screw, right? Nor would you use a buzz saw to drive in nails. There’s a proper tool for each situation.
It is similar to in trading business, some trading tools and indicators are best used in particular environments or situations. So, the more tools you have, the better you can adapt to the ever-changing market environment.
Or if you want to focus on a few specific trading environments or tools, that’s cool too. It’s good to have a specialist when installing your electricity or plumbing in a house, just like it’s cool to be a Bollinger Band or Moving Average expert.
There are billions different ways to grab some pips!
For this lesson, as you learn about these indicators, think of each as a new tool that you can add to that toolbox of yours.
You need not use all of these tools, but it’s always nice to have plenty of options, right? You might even find one that you understand and comfortable enough to master on its own. It is enough discussed.
Now, come to start!

WHAT ARE MOVING AVERAGES?

Moving average indicates a way to smooth out price action over time. By “moving average”, we mean that you are taking the average closing price of a currency pair for the last ‘X’ number of periods. On a chart, it would look like bellow this:

A moving average indicator is used to help us forecast future prices as every indicator does. It is better to determine the potential direction of market prices by looking at the slope of the moving average.

As we said, moving averages smooth out price action.

There are different types of moving averages and each of them has their own level of “smoothness”.

Actually, the smoother the moving average, the slower it is to react to the price movement.

The choppier the moving average, the quicker it is to react to the price movement. To make a moving average smoother, you should get the average closing prices over a longer time period.

Now, you’re probably thinking, “C’mon, let’s get to the good stuff. How can I use this to trade?”

In this lesson, we first explain the two major types of moving averages:

1. Simple moving average
2. Exponential moving average

We’ll also let you know how to calculate them and give the pros and cons of each. Just like in every other lesson in the forexmic.com, School of Pipsology, you have to learn the basics first!

Know about Fibonacci Trading

Fibonacci ratios is used a lot in our trading so you better learn it and love it like your mother’s home cooking. Fibonacci is a huge subject and there are many different Fibonacci studies with weird-sounding names but we’re going to stick to two: retracement and extension.
Lets come to start introducing you to the Fib man himself…Leonardo Fibonacci.

What is a Japanese Candlestick?

As we briefly discussed Japanese candlestick charting analysis in the previous FOREX LESSON, we’ll now dig in a little and talk them more in detail. Let’s do a quick review first.

PLOTTING FOREX SUPPORT AND RESISTANCE

An important thing to keep in mind that support and resistance levels are not exact numbers.
Often times you will see a support or resistance level that appears broken, but soon after find out that the market was just testing it. With candlestick charts, these “tests” of support and resistance are usually represented by the candlestick shadows.

Notice how the shadows of the candles tested the 1.4700 support level. At those times it seemed like the market was “breaking” support. In hindsight we can see that the market was merely testing that level.

FOREX SUPPORT AND RESISTANCE

This is one of the most widely used concepts in FOREX TRADING. Surprisingly, everyone seems to have their own idea on how you should measure FOREX support and resistance.
Let’s see the basics first.

Put your eye before the diagram above. As you visualize, this zigzag pattern is making its way up (bull market). If the FOREX market moves up and then pulls back, the highest point reached before it pulled back is now resistance.

As the market continues up again, the lowest point reached before it started back is now support. In this way, resistance and support are spontaneously formed as the FOREX market oscillates over time. The reverse is correct for the downtrend.

3 TYPES OF FOREX CHARTS AND HOW TO READ THEM

Look at the three most popular types of FOREX charts:

1. Line chart
2. Bar chart
3. Candlestick chart

Here is the well explanation of each of the FOREX charts bellow…

3 TYPES OF FOREX MARKET ANALYSIS

3 TYPES OF FOREX MARKET ANALYSIS

Now, you’ve already learned some history about the FOREX, how it works, what affects the prices, blah blah blah.

ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ.

This is all obviously super important, but know that you’re now thinking…

BORING! SHOW ME HOW TO MAKE MONEYALREADY!!!!

Well, say no more friends because here is where your journey as a FOREX trader starts…

This is the chance you would be able turn back…

HISTORY OF RETAIL FOREX TRADING

As you are known a little to FOREX now, you’re likely to itch to start your pippin’ adventures. But before you set off on your journey, you must need one more thing… An actual account with a broker!

 In the sector, you have to work with a broker that will provide the right services for your individual needs. So we decided to come up with this section to walk you through the right things to consider when you need choose one!

But first, we’ll begin by revisiting the pages of history to find out how brokers came to life. Name the best thing that the mighty powers of the Internet have brought us. YouTube, Facebook,

HOW TO MAKE MONEY TRADING FOREX

The main objective of the FOREX market is  to buy or sell currencies of the differrent countries.
Making a trade in the foreign exchange market is very simple: the mechanics of forex market are almost similar to those found in other markets (like the stock market), so if you have any experience in trading, you might be able to pick it up pretty quickly.

WHEN CAN YOU TRADE FOREX?

FOREX TRADING SESSIONS

 You have been learnt what forex is, why you should trade it, and who makes up the FOREX market, it’s about time you learned when you can trade.
It’s time to learn about the different FOREX trading sessions.
The FOREX market is open 24 hours a day, but it doesn’t mean it’s always active the whole day.
You can make money trading when the market moves up, and you can even make money when the market moves down.
Actually, you will have a very difficult time trying to make money when the market doesn’t move at all.
Do believe us, there will be times when the market is as still as the victims of Medusa. This lesson will help determine when are the most suitable times of the day are to trade.

WHO TRADES FOREX

FOREX MARKET STRUCTURE

As a comparison, let us first examine a market that you actually very familiar with: the stock market. This is how the structure of the stock market looks like:

“I have no choice but to go through a centralized exchange!”

 The stock market tends to be very monopolistic in nature. There is only one entity, one specialist that controls prices. All trades are confined to go through this specialist. Because of, the price may easily be altered to benefit of the specialist, and not to the traders.

WHY TO TRADE FOREX

ADVANTAGES OF FOREX TRADING

There are a lot of advantages and befits of trading Forex. Here are just a few factors included why so many people are choosing the market:

No commissions

 There is no clearing fees, no exchange fees, no government fees, and no brokerage fees for the market. Most of the retail brokers are recompensed for their services through something called the “bid-ask spread“.

WHAT IS FOREX?

Whenever you travel abroad, you may usually see a currency exchange booth at the airport, and then you need to exchange the money you have in your wallet (if you’re a dude) or buy (if you’re a lady) or man buy (if you’re a metrosexual) into the currency of the country which do you are visiting in.

You need to go up to the counter and notice a screen displaying different exchange rates for different currencies of the different countries. You may find “Indonesian rupiah.” and think to yourself, “WOW! My one dollar’s worth is12925 rupiah?! And I have ten dollars! I’m going to be a rich!!!” (This excitement is quickly killed when you stop by a shop in the airport afterwards to buy a banana to have a small breakfast, suddenly, you may find that half of your money is gone.)

By doing this, you participate in THE FOREX market! You’ve exchanged one currency for another. Or in FOREX trading terms, presuming you’re an American visiting Indonesia, you need to sell dollars and buy rupiah.

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