Day Trading Forex Live – Advanced Forex Bank Trading Strategies

How Our Daily Forex Market Analysis Can Improve Your Trading

October 29
03:27 2012

How can our daily forex market analysis increase your chances of success in the forex market? It really boils down to one word….experience. With over 10 years of live trading experience Chad knows what is important and whats not. Furthermore he boils down the most critical information you need to know no matter what forex trading strategy you may use. There is a reason over 12,000 forex traders every month take advantage of this free trading tool! It is because of the quality of this daily market analysis, major industry pillars such as FxStreet are beginning to syndicate this information. More importantly though, how can you benefit from this information? Lets examine 3 ways you can start benefiting from it now!

Understand Forex Market Daily Trends

The basic starting point for anyone’s day regardless of your trading strategy or system is overall market direction. Understand market direction is essential in order to avoid figuratively “swimming upstream”. It is unfortunate but determining market trend is not always the easiest task as you more than likely well know. Why? The classic definition of an uptrend for example is higher highs and higher lows and the opposite for a down trend. Many try to use this in their trading but always seem to sell near the bottom of any down trend, and buy near the top of any clear uptrend. This is not uncommon, as the classic definition of a trend often means you will identify a nice move near its ending point rather than near its beginning. This can be extremely frustrating as well as discouraging to struggling forex traders. With over 10 years of market experience and a proper understand of how the banks tend to move the forex market, Chad has a nose for market trends.

Everyday the expected direction of both the EUR/USD and the GBP/USD is discussed in the daily market commentary. For many beginners to the forex market this can be a great starting point to begin your trading day. If you as a retail trader get the direction right, you have essentially won half the battle! For those already experienced, it can be a great second opinion you can use to cross check with on a daily basis. It is important to remember that the banks rule the forex market. 10 banks control well over 70% of the daily volume, and therefore they dictate intra-day trend. If you can identify the next direction of the mega banks, you can identify the next direction of the market with a high degree of certainty. This tracking of the banks is at the core of our daily market analysis, and thus why it is so powerful when it comes to giving us probable market trend. How else can you benefit for this daily commentary?

Picking Your Entry Points

As a day trader in the forex market your success or failure relies not only on understanding the most likely direction in the market (trend), but it also relies on precise trade entries. Without precision day trading forex profitably becomes nearly impossible. As a short term trader our advantage comes from our ability to place tight stop losses. Without a tight stop you lose your ability to achieve high risk/reward ratios which is key to day trading successfully. Although precise entries are more often related to short term trading strategies, all trading styles (swing traders & position traders alike) can benefit from selecting better entries points. How then can we select better entry points?

Because banks move such massive positions they struggle for liquidity. This struggle for liquidity makes them predictable which is a massive advantage for us….but only if we know how to use it.  To understand this we must first understand how any transaction in all markets actually takes place. If for example you are looking to buy the EUR/USD you must find someone willing to sell an equal amount of EUR/USD. You cannot buy what someone is not willing to sell, and you cannot sell what someone is not willing to buy. Because banks move such large positions they have to create a massive supply to satisfy their demand. Often this is done through what is know as a “false push” or a stop run reversal. Essentially by pushing the market in the opposite direction they can either sell into artificially created buying pressure, or buy into artificially created selling pressure. This is why so many traders feel like they get into the market at exactly the wrong time. This is neither a coincidence nor does it happen by accident, rather it is a well executed plan banks repeat over and over on a daily basis.

Why is that information important in regards to selecting better entry points? It is really quite simple. If you understand where there will be a massing of orders you will have a good indication of where the banks are likely to drive the market, in an effort to accumulate those orders before reversing the price. The beauty is retail forex traders are predictable, and most place not only their stop orders but entry orders as well in very predictable spots. A few of these key price points are covered in the daily market commentary, with the complete list and further detail outlined in the video daily market review. However the entry is not taken blindly as price reaches these levels. It is critical that we see the market break through and then reverse back below or above that price point such as you would see in a stop run reversal setup. Our daily market analysis will point out multiple manipulation points with a high probability of seeing a positive response. Once you spot the manipulation around these key price points covered in the daily commentary it will allow you to take more precise entries, therefore enabling you to maintain a much better Risk/Reward ratio.

Important Forex News & Tape Bombs

As the market began to crash in 2008 everything began to change. Through 2006-2008 we had some of the best most consistent price action in the forex market in and around financial news. Not only did the brokers have no idea how to stop spike trading auto click software, but the overall reaction to market news was very consistent. More often than not it would spike, retrace 6.18% of the move which would give a great chance for an entry, and then continue off in the original direction of the spike. Trading forex news was extremely straight forward and quite frankly many made a small fortune. During this time I was using the original piece of spike trading software. Brokers were completely caught off guard and really had no way to stop it. To fight back they began much more aggressively using the dirty tricks you see as common place today today. Until that time massive spreads, re quotes, and huge slippage was more of a rarity than a market standard. Now a days however those things are the market standard, with honest forex brokers being the rarity. We have moved from a much more “simpler” trading environment to a dynamic one that is always changing to say the least. How can you stay on top of forex news important to you?

First of all not all financial news is important, and just because ForexFactory labels it a “high impact” news release doesn’t mean it will necessarily move the marketplace. Times are changing and the impact financial news has on markets will change even faster. What’s important today will not necessarily be important 6 months from now. How can you keep an eye on a market changing so fast? One way is to keep up to date on the response you should expect with each release. As we mentioned an important piece of financial news will not necessarily move the market, and therefore it is critical we understand how a specific piece of news will move the market, and what type of deviation does it take from the expected number to do it. We can do this by using tools such as ForexPeaceArmy News Calendar which is able to show you actual charts of all past releases. This is critical information as you can see how the market responds to the news.

Additionally the current days forex news is covered in the daily market commentary. What is nice about the commentary is how all the information is already boiled down for you. Hours of research go into each daily market review saving our 12,000+ monthly readers massive amounts of time they can spend elsewhere. Remember the second part of this sections heading….”tape bombs”. What is a tape bomb? A tape bomb is an unexpected major news release that was not scheduled. Often comments from influential financial leaders, or comments from a central bank can makes massive spikes in the market leaving traders more often than not frustrated. You will never be able to avoid every unexpected news release. With that being said you can however take certain steps to be as prepared each trading day as possible. How so?

Knowing what is happening in the financial world can keep you abreast of the potential for a tape bomb. More often than not meetings between financial heads cannot be found on news calendars. Not knowing when these meetings are to take place can be devastating as you are left not knowing the cause of the massive market move or major volatility increase. Because of this I always start my trading day by first reading through Chad’s commentary, and as a general rule of thumb the most important information I need to know is covered saving me a huge amount of time daily.

Happy Trading,


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