China’s consumer price index (CPI), a major gauge of inflation, rose to a 28-month high of 5.1 percent in November, the National Bureau of Statistics (NBS) said Saturday.

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Profitable Day Trading with Precision: The Golden Secret of Price, Time and Market Symmetry

Day Trading With Short Term Price Patterns and Opening Range Breakout

Why are support and resistance levels crucial when participating in the Forex day trading market?

Simply put, they represent key, strategic price points at which traders processed orders involving millions or even billions of dollars. No wonder price at times has a hard time getting past a previous high or low. Those levels are being fiercely defended by traders who have large amounts of money at stake and who do not want to see price break those levels.

For this reason anyone who engages in Forex day trading should learn how to trade support and resistance. The following checklist provides crucial guidelines:

1. Support and resistance levels are much more significant on the higher time frames. Pay particular attention to price highs and lows on the daily chart as this time frame is commonly used by big traders.

2. A price high or low has more significance when it has a number of candles either side of it which are lower (in the case of a price high) or higher (in the case of a price low).

3. Before you consider Forex day trading at a support or resistance level, see if there are more factors that would indicate this is a key price level.

For example, does a trendline intersect at the same point? Does the support or resistance line match up with a Fibonacci level, either a retracement or an extension? Does the support or resistance level coincide with a pivot point if you are in the practice (and it’s a wise one) of calculating pivot levels when Forex day trading?

4. Has a key support resistance level been broken? Then look to see if price will come back to test that level. Remember, resistance once broken can become support in the future and support once broken can become resistance in the future.

These Forex day trading scenarios can present excellent trading opportunities as you put an entry order in at the key level and wait for price to come back and pull you in. Within a short time your dealing spread is covered and you are in profit.

5. The market spends most of its time in trading ranges or consolidation channels. You need to accept that this is a characteristic of Forex day trading and adjust your mindset accordingly. Identify the high and low of the trading channel and manage your trades accordingly.

6. After identifying a trading channel or range and you see a trading opportunity, set your entry level at the base of the channel if you are going long or at the top of the channel if you are going short.

Don’t chase after price once it breaks out of the channel (although many who engage in Forex day trading do so). You will not get the optimal entry point. Waiting for price to take you in either at the top or bottom of the channel means you can have a smaller stop and your price target is closer.

7. Pay particular attention to the previous day’s high and low. Price will often hesitate and retrace at these levels. If you are a Forex day trading scalper, you can often grab a nice pull back of 10 pips or more at these strategic levels.

Note: Although there are various ways to calculate the previous 24 hour period depending on where you live, using GMT as a standard is often beneficial. Midnight GMT is a time when the market is generally very quiet and unlikely to make new highs or lows.

Succeed Or Fail?

It is unlikely you will succeed at Forex day trading if you fail to understand or take into consideration support and resistance. This indicator is that crucial! Yes there may be fancy indicators out there with all the bells and whistles, but this simple indicator, marking where price reached a high or low during previous trading sessions, can be one of the most powerful and effective Forex day trading tools available.

Be sure you spend sufficient time studying it, examining your charts, marking off the key levels each time you begin a new Forex day trading session.

Article written by Michael A. Jones

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Day Trading Options: Profiting from Price Distortions in Very Brief Time Frames

Moving averages are an integral part of most day traders indicator arsenal, and getting two traders to agree on which indicator is the best, or which configuration yields superior results is an argument that will rage on forever.  There is simply no agreement as to exactly what works best-and that is as it should be, because no two traders trade with same mind set and personality.

In the world of moving averages there are two contenders for consideration.  The diminutive simple moving average (SMA) and the more complicated exponential moving average (EMA).  Because the EMA has a more sophisticated method of calculation, many consider it to be the superior of the two averages, but that would be jumping to unfounded conclusions.

The SMA is a basic arithmetic mean: you add together the closing prices from the last 10 periods then divide the product by 10.  As I said, the result is a simple arithmetic mean.  Pretty simple?  Too simple for some people, especially those who tend to associate complexity with efficiency.

Complexity does sometimes yield superior results, but that is not always the case.

EMA’s are really not that much more difficult to calculate.  The formula is simply 2 (n+1), and the result is added to the prior days exponential calculation.  With some simple deduction you will see that an EMA emphasizes the most recent days prices, or weights the most recent days prices more than prices early in the exponential sequence.  Since any moving average uses historical data, or data that has already occurred to calculate the average, any moving average can be considered a lagging indicator.   It should be obvious, then, that the purpose of the EMA is to “speed” up the lag factor that is inherent in all moving averages.

Do EMA’s really speed up the lag factor?

To a certain extent EMA make the lag factor in moving averages less distinct, but like all things, there is a cost.  EMA’s are notorious for causing a raft of early buy and sell signals,  as the last variables in the sequence overweight the average.  For that reason alone, I am not a huge fan EMA’s and prefer SMA’s.  Does that mean SMA’s are better than EMA’s? Not at all, all it means is that in my trading mentality I am far more comfortable with the results from an SMA than I am an EMA.

I always strike an 89 period SMA on my charts and watch the price action relative to the price action and the SMA.   If the price action in more than 3 or 4 points below the SMA(on the ES contract) I immediately decide that long trades are out of the question until the price action moves closer to the SMA, and visa versa on price action about the 89 period SMA.   I can also glean some nearly instant information regarding the trend of the market by looking at the slope of the 89 period SMA, and the sharper, or more pronounced the slope appears, the stronger the trend.

I also use a number of paired moving averages to back up some of my entry and exit points.  I generally use Fibonacci numbers starting with 5 and up to form my two moving average lines.  I find it best, on short term trading, to use to SMA’s that are within 15-20 points of each other.  I will leave to you to discover which set of moving averages intersect at point which best suit your trading style.

So we’ve talked a bit about moving averages today, and seen some applications for the SMA.  The EMA’s are also used by many traders and I would encourage you to explore the applications for this moving average.

I endorse a state of the art trading program for beginners at Trading Concepts, Inc It’s an awesome product that will have you well on your way to success. Plus, it has a money back guarantee…you have nothing to lose and thousands to gain.

Article Source:http://www.articlesbase.com/day-trading-articles/es-emini-day-trading-exponential-moving-averages-vs-simple-moving-averages-1596186.html

In recent years there has been a growing trend toward “black box” trading systems, which are programmed computers that trade on signals generated by market position and price and automatically execute and exit trades.  In using these systems, the user sits back and the computer does all the work and the user checks his account every night to see how he has done. Many of these systems claim fantastic rates of return through using their system.   These systems, quite simply, should be considered trading bots.

This is in sharp contrast to another group of traders that are adamant that no oscillators or momentum indicators are required to trade, and price action is the prime methodology for entering and exiting trades.  Chart formations and market movement is the prime variable in  this style of trading, and some traders claim some fairly impressive returns.

The third type of trader uses observed price movement along with a battery of oscillators and momentum indicators to bolster their investment decisions.  From the onset, I will admit that I fall into this category, as I feel the more information at your disposal the better your trading decision.  In the extreme, I have observed some traders who may have two or three screens of oscillators they use to determine their trades, and I have thought to myself, “how in the world could someone possibly keep track of all those different indicators?”

For example, I am an instrument rated pilot and when flying in IFR (zero visibility) situations we are taught a scanning technique to watch seven indicators simultaneously.  This technique is practiced at length and is no small skill to develop.  Of course, the secret is to move you eyes from instrument to instrument without stopping for any period of time on a single instrument, thus scanning the instrument panel for any abnormalities that may crop up.  I can scan seven instruments, but I don’t think that I have the ability to do many more, so I have serious doubts that these multiple screen of indicators are of much value to a trader in that it is practically impossible to interpret the results simultaneously.

So I am going to throw the multiple screen watchers out of this discussion as their methodology is nothing more than overkill.

The bots, though, are a different story.  I actually purchased one of the most famous forex bots just to see how it worked and determine whether I could figure out the formulae it used to buy and sell.  Unfortunately, I never fully understood it’s buying and selling signals fully.   On the other hand, the bot did not perform as advertised.  To be sure, it made some good trades and I actually ended up with my account in black at the end of the month, but the results were less-than-impressive.  I have read non-scientific and unsubstantiated posts on chat boards that claim a similar experience as mine.   I shut the bot down and haven’t used it since, but it was an interesting experiment to perform and perhaps I will fire the software back up sometime and give it another chance.

Hedge Funds have been notorious users of automated trading systems over the years, and there has been no small amount of debate as to whether they are good for the market, as oppose to detrimental.  In times of market turmoil, there are regulations on the NYSE which require the hedge funds and institutional traders to cease an automatic trading activity.  There is no doubt in my mind that bots create a degree of volatility in the market that would not be there if they were not used.  The ES Emini contract is starting to have a larger number of bots in use, and this may account for some of the absolutely irrational price action behavior you see on the chart from time to time.  (I want to point out that opinion is purely my own, not based on science but observation)

The price action alone guys, the ones who don’t use indicators and abhor bots, are another matter all together.  Past experience has taught me that it is entirely possible to trade the markets on price action alone, though it is my opinion that you lose a bit of your accuracy and precision in trading when you intentionally exclude helpful information.  This only makes sense to an extent, the more information you have at your disposal should give you a better view of what the market is actually doing, which can be difficult to discern in situations that are extremely chaotic.   Just the same, I will give the price action guys their due, they are able to make money trading on chart formations and  price action, though I think they are missing the boat.

As for me, I prefer to use four  momentum and price oscillators and chart study to trade.   This has produced optimum results in my personal trading for more than a decade, and I am often able to discern market trends the price only guys can’t see yet.  As for the bots, I have no idea what they are seeing, and that alone worries me.  I would prefer my future in my own hands, not a machine.

I endorse a state of the art trading program for beginners at Trading Concepts, Inc It’s an awesome product that will have you well on your way to success. Plus, it has a money back guarantee…you have nothing to lose and thousands to gain.

Article Source:http://www.articlesbase.com/day-trading-articles/es-emini-day-trading-how-far-to-go-with-automation-1572872.html