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ADX, or Average Directional Index, is a tool that is designed to help us anticipate the strength of a trend to avoid these kinds of situations. In combination with other Forex trading strategies the ADX can allow us to fully understand the trend and thus only enter trades that will yield big profits. Forex Factory is for professional foreign-exchange traders. Its mission is to keep traders connected to the markets, and to each other, in ways .
Vinay negi December 15, at 4: Ramlee December 3, at 2: Marko Graenitz November 23, at Sachith October 13, at 8: Mariano Jc October 12, at 7: Manjula October 9, at Nice lesson as always. Thank you for coaching Reply. Lyte October 9, at Thanks Nial for sharing todays lesson on risk reward and stop placement. Tomson October 8, at 9: Thanks again Nial, Great with those examples of how you read the charts, it really helps when trying to understand how you look at different setups.
Darrell J October 8, at Great information about stop loss and price targets. Nabs October 8, at 7: Akintola Mojeed October 7, at 2: Marcel October 7, at 1: Greetings from Holland, Marcel Reply. Alan October 6, at 9: Paul October 6, at 8: Hi Nial Excellent article as always. This article is priceless , the info is instructive. Nial, you are too much! Pavel October 6, at 5: Excellent stuff as usual. Khairul Azan October 6, at 5: Great post about how you place your stop loss and take profit..
This make me more clear about when should I get out from the market after make an entry. S October 6, at 3: Maurice October 6, at 1: Pham October 6, at 1: Shyam October 6, at 1: Wilson Pon October 6, at 1: Nial, Great article Reply. October 6, at Thank you, Nial Reply.
Jean-Francois October 6, at Excellent timing — just what i needed when i needed it. Steve October 6, at Daniel October 6, at 9: Souto October 6, at 8: John October 6, at 8: That last chart and explanation is gold. Cherie O'keeffe October 6, at 6: Jason Prince October 6, at 5: Naman October 6, at 4: Nial, The way you present and explain yet keeping it simple, its gr8.
Flash October 6, at 3: Boone October 6, at 3: RSE October 6, at 2: Teaching real trading strategies and practical questions. Alex October 6, at 1: Great article and well illustrated! Peter Miller October 6, at 1: Invaluable Regards Peter Miller Reply. Patrick October 6, at Simple… miss next great contribution… Reply. Andres October 5, at Thanks Nial, you have been an inspiration, I read all your articles Reply.
Dominik October 5, at Many thanks for the article! Connie October 5, at It can never be stressed too much! Kenny R October 5, at Brett Reynolds October 5, at Michael Tottman October 5, at Nial, absolute goldust as always. Dave October 5, at Thanks for your interest.
October 5, at Nial As always, really excellent material! Nadeem Q October 5, at 9: Zarshad October 5, at 9: T Allen October 5, at 9: Thanks Nial — great article and well illustrated Reply. Leave a Comment Cancel reply Your email address will not be published. Recent Popular Comments Nial Fuller. Price Action Trading Patterns: Can Forex Trading Be Taught? Worth its weight in Gold. Great article, thank you Nial!!! It took years of being a loser befo This lesson is the apex of my study. Nial I am still struggling.
A risk to reward ratio is a measurement of how much profit you are anticipating in exchange for the maximum potential loss you can suffer. When setting your profit targets it is very important to trade with a positive risk to reward ratio.
When a setup occurs that does not offer an appropriate risk to reward ratio, it is always best to leave the trade and wait for a more profitable scenario later on. Get month Premium Membership for free.
Deposit and send us an email to premium tradimo. Tradimo helps people to actively take control of their financial future by teaching them how to trade, invest and manage their personal finance.
Trading in financial instruments carries a high level of risk to your capital with the possibility of losing more than your initial investment. Trading in financial instruments may not be suitable for all investors, and is only intended for people over Please ensure that you are fully aware of the risks involved and, if necessary, seek independent financial advice.
The educational content on Tradimo is presented for educational purposes only and does not constitute financial advice. Profit targets are the most important part of your trading.
It is not your entries where you make a profit or loss, it is your exits. Every trader needs a trading journal. Use this link to get the discount.
A risk to reward ratio is a measurement of how much profit you intend to make in exchange for the maximum potential loss you can suffer. Why Get month Premium Membership for free. The Basics of Money Management. Money management — protecting your capital 3 minutes. Money management — protecting your capital 7 minutes. How much money trading capital do you need to trade? Sometimes switching to a longer time frame will reduce the number fractal signals, allowing for a cleaner look to the chart, making it easier to spot trading opportunities.
This system provides entries, but it is up to the trader to control risk. In the case above, the pattern isn't recognized until the price has started to rise off a recent low. Therefore, a stop loss could be placed below a recent low once a trade is a taken. If going short , during a downtrend, a stop loss could be placed above the recent high. This is just one example of where to place a stop loss.
One of the issues with fractals is which one of the occurrences to trade. Traders also tend to focus on trades at certain Fibonacci ratios. This may vary by trader, but say a trader prefers to take long trades, during a larger uptrend, when the price pulls back to the Fractals could be added to the strategy: Strategies for Trading Fibonacci Retracements. The chart below shows this in action. The price is in an overall uptrend, and then pulls back.
The price forms a bullish fractal reversal near the 0. Once the fractal is visible two days after the low , a long trade is initiated in alignment with the longer-term uptrend. Taking profits could also involve the use of fractals. For example, if going long on a bullish fractal, a trader could exist the position once a bearish fractal occurs.
Other exits methods could also be used, such as profit targets or a trailing stop loss. Fractals may be useful tools when used in conjunction with other indicators and techniques.
John October 6, at 8: Your actual trading may result in losses as no trading system is guaranteed.
He has a monthly readership of , traders and has taught over 20, students.