Below is an Article that will help you trade forex in a profitable way like the Top Dogs. The below strategies are pefect when you use a Forex Trading System.

WHAT YOU NEED TO GET STARTED

• A computer, Internet connection,

• A system to trade with such as my Pivot trading system.

• A funded account at a forex market maker broker 

You only need a few tools to locate profitable set-ups: 

• Price

• Price Bars,

• MACD Divergence

• Pivot Point

• Breakout/test/violations

• Trendline breakout

That and of course your passion to succeed is all it takes in this wonderful business of Forex trading. No other bells and whistles or toys are required - contrary to what you may have learned before. The hardest part for you will be to "unlearn" all the nonsense you've been fed about trading prior to coming here. (Just give your head a good shake; maybe it will go away).

PRICE CHARTS

I use mainly daily, hourly, 15 minute, and five minute charts. The daily chart will help you define the overall trend from a position trading point-of-view, and the hourly chart will give you a feel for the intraday trend.

The 15 minute chart is used for entry and exit - with assistance from the five minute chart, where price is moving quickly, and you need to be closer to the action. Please note that the five minute is not to be used for scalping, as there is a lot of noise there,  and you could easily get whipsawed.

Make sure you are using charts that are generated from the same data source that feeds the dealing engine, as is the case with both platforms mentioned above. That way, what you see is what you get when you buy or sell. Some charting packages do not accurately reflect where price is at any given moment in time.

PIVOT POINTS

My trading system is based on pivots. Pivot points are targets, or mile markers, used for assessing price movement and determining direction. If you're unfamiliar with pivot points and how I use them, below is an overview. Used by professional floor traders, pivot trading is one of the oldest and most amazing technical trading methods available.

Professional traders calculate pivot points in preparation for each trading sessions. The pivot lines system is an indispensable guide for making profitable decisions. For an active trader, the pivots can mean the difference between winning and losing.

The Pivot techniques work well in markets with a wide daily trading range, such as the Forex. Pivot lines steers traders away from "no man's land" and identifies "high activity" areas in which the equity has a high probability of reversal. These areas are important trading zone watched daily by floor traders and computer trading systems.

The levels for the trading ranges and pivots are the support and resistance levels of the market in the next time interval. It is important to note that the predicted levels only give the range in the next time interval. They do not indicate when the levels will be reached by the currency price action. The pivot is a level at which the underlying asset can be expected to change direction and/or move rapidly away from.

My pivots program provides not only Pivot, R1, R2, S1, and S2, but also the M1, M2, M3, and M4 points as well. It is common to find many traders calculating only the Pivot, R1, R2, S1, and S2 levels. In the Forex market, however, you will find my additional points of support and resistance to be very significant indeed.

After you have calculated the pivot numbers for the day, place horizontal lines on your 15 minute and 1 hour charts at the pivot numbers for the day, or at least as many lines as your chart has room for.

These pivot points will guide your trading throughout the day.

INDICATORS

Today's Content focuses on MACD. - one of my favourite indicators. The MACD acronym stands for Moving Average Convergence Divergence. The MACD is a trending indicator which means that it follows price action and as traders we look for a divergence between price action and MACD to help us in determining the best trading opportunities.

The MACD graph is a representation of the difference between the fast and slow moving averages of a session's price action. When there is a difference between the direction of the slopes of the price action line and the MACD graph then this is known as MACD Divergence.

As price moves up or down, the MACD indicator usually follows closely creating similar waves i.e. the highs and lows on the Price chart will correspond to the highs and lows on the MACD chart. However, at times price and MACD will appear to go in different directions.

When this happens price and MACD are said to be diverging and is often a harbinger of a change in price action thus a potential opportunity. MACD Divergence is simply price and MACD going in different directions i.e. not following each other.

It is important to note that there are many technical indicators used in forex trading and many people forget the role of indicators.  An indicator is a tool that interprets some sort of information and presents us with some meaningful value.

A speedometer is an indicator that measures the speed of a car, giving us a meaningful value so that we drive appropriately and do not receive a speeding ticket.  Would a speedometer be useful to measure the temperature of a room?  To effectively measure the temperature of a room you should use an indicator called a thermostat.

This helps us to appreciate that using the wrong indicator to measure the wrong thing will not give you meaningful values for you to make important decisions.  Just like a thermostat cannot show you how fast you are moving when the speed limit sign tells you to reduce your speed.

Please keep these facts in mind when considering which indicators you use in your trading. And I would recommend that you learn about MACD and include it as one of your major indicators when analysing trading opportunities.

Remember AvaFX.COM is offering a FREE forex trading account. To take advantage of this special offer please goes to: AvaFX.COM

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