This is based on my personal experience for the little years I have been on this, precisely eight. It makes forex trading simple and profitable. Reduce your fears and emotions and build your trading confidence. This can make you a good account manager rather than investors breathing down your neck. This 5Ps’ may be more comprehended by those who have started live accounts and demo. Practicability on live accounts will yield better result on profitability and confidence level as your real investment (money) is involved. On demo accounts, the issue of confidence level may not arise because you have nothing to lose and when you make money, it is virtual.
The market is a repeating pattern they say in forex trading. What we do in forex trading to make profit or loss is simply buying and selling. Taking buy position or sell position I will call it because a new trader be asked to trade his account funded in say USD or NGN(Nigerian naira) but converted into USD, to go for a move in a pair like EURJPY, and he/she does not have euro(€) nor yen(¥).
Position here is described as the current market price in a broader outlook of the chart of the currency pair based on periodicity in use. Periodicity is one of the 5Ps’ and determines also the category of trader you belong to, be it, scalper, short term, Intra-day, swinger.
Taking a cursory look I said, the market position may be up (good for sellers) or down (good for buyers) or in the middle (which you may have to avoid, though not completely depending on your experience and skill in market analysis). I will do an expose on EURGBP pair based on my candlesticks analysis of the weekly and monthly charts.
On weekly chart, the broad view position of the EURGBP market is down. Penultimate week had an inverted hammer which portended a bullish trend in the next to follow, precisely last trading week of August 31 to September 4. The market obeyed. Last week bullish candlestick also gives an indication that the market might continue in that direction. On monthly chart, it looks sweet to make money on bullish trend in this month of September in EURGBP and even till next two months. Here the position is fair, down, and has a long previous decline. Though this is not sacrosanct, but chances of losing in this pair are very low unless you fail to employ good money management. Give or take, I give it ninety percent success on uptrend. BUY position is good.
As earlier said, it is a component of the winning 5Ps’ ways. On MT4 Platform periodicity or time frame ranges from one minute (M1) price chart up to one month (MN). In between are M5,M15,M30,H1,H4,D1 and W1. The time frame you employ most in place in your orders determine if you are scalper, intra-day or swinger. Market analysis of longer time frame do override short time frames. Presently on lower time frame the market be selling say on H4 but analysis on W1 may support buy. Candlesticks analyses on EURGBP on weekly and monthly chart support bullish trend. These are the highest periodicity time on MT4 and still give the much reliability to depend on or uphold that trade decision. The Penultimate weekly chart had an inverted hammer which suggested a bullish market of last week. The market obeyed. A bullish market of last trading week August 31st to September 4th strengthens the bullish nature of this pair in some time to come.
Monthly chart supports Position as the pair is at its low. Candlestick analyses of August gave a bullish engulfing, hence you can ride on to at least 0.8000 for a TP (Target profit). You have two of the 5Ps’ in your favour. With good money management, let us ride on this. The fear may be your entry point, the lower and earlier you are in, the better . As the two higher time frames technically, do an analysis on lower time frame to see what the market is actually saying. This may be some support levels, setting buy limits and other market analysis tools you have at your arsenal.