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The most basic forms of forex trades are a long trade and a short trade. In a long trade, the trader is betting that the currency price will increase in the future and they can profit from it. A short trade consists of a bet that the currency pair’s price will decrease in the future. Traders can also use trading strategies based on technical analysis, such as breakout and moving average, to fine-tune their approach to trading.

Depending on the duration and numbers for trading, trading strategies can be categorized into four further types:

A scalp trade consists of positions held for seconds or minutes at most, and the profit amounts are restricted in terms of the number of pips. Such trades are supposed to be cumulative, meaning that small profits made in each individual trade add up to a tidy amount at the end of a day or time period. They rely on the predictability of price swings and cannot handle much volatility. Therefore, traders tend to restrict such trades to the most liquid pairs and at the busiest times of trading during the day.

Day trades are short-term trades in which positions are held and liquidated in the same day. The duration of a day trade can be hours or minutes. Day traders require technical analysis skills and knowledge of important technical indicators to maximize their profit gains. Just like scalp trades, day trades rely on incremental gains throughout the day for trading.

In a swing trade, the trader holds the position for a period longer than a day; i.e., they may hold the position for days or weeks. Swing trades can be useful during major announcements by governments or times of economic tumult. Since they have a longer time line, swing trades do not require constant monitoring of the markets throughout the day. In addition to technical analysis, swing traders should be able to gauge economic and political developments and their impact on currency movement.

In a position trade, the trader holds the currency for a long period of time, lasting for as long as months or even years. This type of trade requires more fundamental analysis skills because it provides a reasoned basis for the trade.

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Where is Forex Traded?​

Forex is traded primarily via three venues: spot markets, forwards markets, and futures markets. The spot market is the largest of all three markets because it is the “underlying” asset on which forwards and futures markets are based.

Why Do People Trade Currencies?​

Companies and traders use forex for two main reasons: speculation and hedging. The former is used by traders to make money off the rise and fall of currency prices, while the latter is used to lock in prices for manufacturing and sales in overseas markets.

Are Forex Markets Volatile?​

Forex markets are among the most liquid markets in the world. Hence, they tend to be less volatile than other markets, such as real estate. The volatility of a particular currency is a function of multiple factors, such as the politics and economics of its country. Therefore, events like economic instability in the form of a payment default or imbalance in trading relationships with another currency can result in significant volatility.

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What Is a Spot Trade?​

A spot trade, also known as a spot transaction, refers to the purchase or sale of a foreign currency, financial instrument, or commodity for instant delivery on a specified spot date. Most spot contracts include the physical delivery of the currency, commodity, or instrument; the difference in the price of a future or forward contract versus a spot contract takes into account the time value of the payment, based on interest rates and the time to maturity. In a foreign exchange spot trade, the exchange rate on which the transaction is based is referred to as the spot exchange rate.​
  • Spot trades involve securities traded for immediate delivery in the market on a specified date.​
  • Spot trades include the buying or selling of foreign currency, a financial instrument, or commodity​
  • Many assets quote a “spot price” and a “futures or forward price.”​
  • Most spot market transactions have a T+2 settlement date.​
  • Spot market transactions can take place on an exchange or over-the-counter.​
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Understanding a Spot Trade​

Foreign exchange spot contracts are the most common type and are usually specified for delivery in two business days, while most other financial instruments settle the next business day. The spot foreign exchange (forex) market trades electronically around the world. It is the world's largest market, with over $5 trillion traded daily; its size dwarfs both the interest rate and commodity markets.

The current price of a financial instrument is called the spot price. It is the price at which an instrument can be sold or bought immediately. Buyers and sellers create the spot price by posting their buy and sell orders. In liquid markets, the spot price may change by the second, as outstanding orders get filled and new ones enter the marketplace.​

 

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Difference Between Spot Rate and Futures Rate
The currency spot rate is the current quoted rate that a currency, in exchange for another currency, can be bought or sold at. The two currencies involved are called a "pair." If an investor or hedger conducts a trade at the currency spot rate, the exchange of currencies takes place at the point at which the trade took place or shortly after the trade. Since currency forward rates are based on the currency spot rate, currency futures tend to change as the spot rates changes.

If the spot rate of a currency pair increases, the futures prices of the currency pair have a high probability of increasing. On the other hand, if the spot rate of a currency pair decreases, the futures prices have a high probability of decreasing. This isn't always the case, though. Sometimes the spot rate may move, but futures that expire at distant dates may not. This is because the spot rate move may be viewed as temporary or short-term, and thus is unlikely to affect long-term prices.​

 

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Two effective Trading Strategies using Williams % R​

Williams % R for Trading Strategies is a very simple but effective is a technical analysis oscillator described by Lary Williams in the year 1973. It measures the capacity of bulls and bears to close prices each day near the edge of the recent range. Williams % R confirms the trend and gives us a warning of the upcoming reversal.

Williams % R gives us 3 types of trading signals. They are as follows-

1. It defines the overbought and oversold zone
2. It defines failure swings
3. It identifies bullish and bearish divergence

Case 1:
When the price closes below the 100 DMA and the Williams % R is below the 50 line, a short signal is generated. We will remain in the trade until the Williams % R gives closing above 50 line and the price closes above 100 DMA.

In the first scenario, as we can see in the chart, that when the price closes below the 100 DMA and the Williams % R was also below the 50 line, we could have taken a short trade. However, when the Williams % R crossed back above the 50 line, we could book our trade, thus making a fair amount of profit in the process.

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Case 2:
When the price closes above the 100-period moving average, from below, and the Williams % R is above the 50 line, a buy signal is generated. We will be there in the trade unless the Williams % R gives closing below 50 line or the price closes below the 100 DMA.

In the second scenario, we saw that as the price closed above the 100 DMA and as long the Williams % R is above the 50 line, we could remain in the trade. However, when the Williams % R closed below the 50 line, we could have exited the trade. This trade could give us very good profit.​

 

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Trading with Elliott Wave (Part 1/2)​

Technical analysis’ Elliott Wave theory is used to explain price changes in the stock market. Ralph Nelson Elliott created the hypothesis after observing and identifying recurrent, fractal wave patterns. Consumer behavior and stock price movements both exhibit waves. The theory holds as these are recurring patterns, the movements of the stock prices can be easily predicted. Investors can get an insight into ongoing trend dynamics when observing these waves which also helps in deeply analyzing the price movements.​

What is Elliott Wave?​

The Elliott wave principle is a form of technical analysis that helps traders in analyzing the financial market cycle. With the help of this Elliott wave theory, traders can forecast market trends by identifying extremes in prices and investor psychology. Elliott Wave Theory suggests that movements of the market follow a sequence of crowd psychology cycles. The Elliott Wave Patterns are formed according to the ongoing market sentiment, which alternates between bullish and bearish cycles.

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How does Elliot Wave work?​

The Elliott wave theory is a type of technical analysis that aids traders in understanding the cycles of the financial markets. By spotting extremes in price and investor psychology, traders can predict market patterns using the Elliott wave theory. According to Elliott Wave Theory, market movements are said to be influenced by a series of cycles in crowd psychology. The current market attitude, which alternates between bullish and bearish cycles, determines how the Elliott Wave Pattern is generated.

The concept of wave analysis as a whole does not equal to a typical blueprint formation where you just follow the instructions, unlike most other price formations. Wave analysis provides insights into trend dynamics and aids in a deeper understanding of price movements.​

Decoding Elliott Wave Impulsive Pattern​

Five sub waves make up an impulse wave, which moves overall in the same direction as the trend of the largest degree. The most prevalent and straightforward to identify motive wave in a market is this pattern. It is made up of five sub-waves, five motive waves, three of which are likewise motive waves, and two corrective waves. This is classified as a 5-3-5-3-5 structure, as was previously illustrated.

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Its creation is governed by three unbreakable rules:​
  • Wave two cannot retrace the preceding wave more than 100%.​
  • Of waves one, three, and five, the third wave can never be the shortest.​
  • Wave four cannot ever advance past the third wave.​
The structure is not an acceptable structure if one of these rules is broken.​

 

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Trading with Elliott Wave (Part 2/2)

Decoding Elliott Wave Corrective Pattern

Corrective waves, also known as diagonal waves, are composed of three sub-waves or a combination of three sub-waves that result in a net movement that is perpendicular to the trend of the next-largest degree.

Its objective, like with all motive waves, is to move the market in the trend’s direction.

There are five sub-waves in the corrective wave. The diagonal is different because it might seem like a wedge that is either extending or contracting.

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Depending on the sort of diagonal being observed, the sub-waves of the diagonal may not have a count of five. Every sub-wave of the diagonal, like the motive wave, never exactly repeats the previous sub-wave, and wave number three of the diagonal may not be the shortest wave.

Elliott Wave with Fibonacci
Corrective wave application emphasises the potential for cross-studying Fibonacci retracements. Fibonacci levels were not directly used by Elliott, although traders have done so to make the conventional theory more complex.

Which Fibonacci retracement levels might be applied at different stages in the trend are highlighted by the previously stated principles. The 23.6 percent -50 percent levels would be of special interest to a trader searching for a fourth wave given rule three, who would also be looking for it to be reasonably shallow.

Additionally, we can look for the correct A, B, and C move to represent a retracement of 50% to 61.8% of the overall 1-5 impulse move.

Bottom line
For many people all across the world, Elliott Wave theory continues to provide markets a sense of structure. The capacity to constantly adjust the theory whenever a rule is breached can make it difficult to employ the theory as a trading tool.

But it also significantly improves trend recognition’s level of clarity. Elliott’s original principles can be made as complex as a trader wants, but it is unquestionably an approach that many traders choose to prioritise in their market tactics.

We hope you found this blog informative and use it to its maximum potential in the practical world. Also, show some love by sharing this blog with your family and friends and helping us in our mission of spreading financial literacy.​

 

Solid ECN

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How to trade with High-Wave Candlestick Pattern?
Indecision candlesticks that resemble long-legged Dojis are known as High-wave candlestick patterns. Their lower shadows are lengthy, and their top wicks are long. They also have a larger physical body. They’re common near support and resistance levels, as well as during periods of consolidation. Bullish or bearish high wave candles are possible.

What is High-Wave Candlestick Pattern?
A high wave candlestick pattern is an indecisive pattern that indicates neither bullish nor bearish market conditions. It generally happens at the levels of support and resistance. This is where bears and bulls compete to drive the price in a specific direction. Long lower shadows and long higher wicks are used to show the design of candlesticks. They, too, have little bodies. Long wicks indicate a lot of price movement throughout the period. However, the price eventually settled near the opening level.

In most situations, buyers attempt to raise prices but are met with fierce opposition. Similarly, sellers attempt to cut prices but find fierce opposition. Both fail to drive price in a specific direction, resulting in the candlestick closing near to where it began.

Formation
The high wave candlestick is a unique type of spinning top basic candlestick with one or two lengthy shadows. The prices at the open and closing are not the same. They differ slightly from one another. The color of the body has no bearing here. The pattern looks like a long-legged Doji.

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The High wave pattern indicates that market changes are rapid, just as most candles have long shadows. This could put the current trend in jeopardy. The significance of the candle, like in so many other examples, is highly dependent on the market setting.

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How to interpret this pattern?
A high wave candlestick pattern can appear anywhere on the price chart of a stock or currency pair. This High-wave candlestick pattern could be regarded as part of a continuation pattern if it appeared in the middle of a move, either an upward trend or downwards trend. For example, if a stock is heading up and the high wave candlestick pattern appears, a consolidation could occur. After a few swings, the price of a range’s highs and lows may break out of the range and continue to rise.

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If the high wave candlesticks appear in a stock that is going lower, a range may emerge, resulting in a sideways activity. When the consolidation period ends, the price may break out and continue to fall in line with the long-term decline.​

 

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About us​

Solid ECN Securities is a team of experts with more than a decade of experience in trading, IT, and brokerage development. Gradually over the years, we collected priceless information about the market demands. We have learned how to safeguard and secure the trading environment on contracts.

It was in 2017, that we were determined to establish an independent hub to protect our accounts and trades. It was at that time we came up with the idea of Solid ECN Securities. We started with a self-developed platform, but due to the trading demands, the platform could meet our minimums only. Therefore, we stepped up and made it to the next level.

We formed the company and hired more experts to expand the Solid ECN brand worldwide. The pillar of the company is to provide secure trading without discrimination.​

 

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Understanding On-Neck Candlestick Pattern​

The On-Neck Candlestick Pattern is made up of two candlesticks: a tall down candle and a much shorter up candle that gaps down on the open but closes at or near the previous candle’s close. The pattern is called “On Neck” because it produces a horizontal line that can be interpreted as a “neckline” or “neck” when the two closing prices are the same (or nearly the same) throughout the two candles.

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What is On-Neck Candlestick Pattern?
When a long real body down candle is followed by a smaller real bodied up candle that gaps down on the open but closes near the prior candle’s close, the on neck pattern occurs. The pattern is known as a neckline because the closing prices of the two candles are the same (or nearly the same), forming a horizontal neckline. In theory, the pattern is considered a continuation pattern, implying that the price will continue to fall as a result of the pattern. In actuality, this happens just about half of the time. As a result, the pattern frequently implies at least a short-term upward reversal.

Formation
Look for the following characteristics to identify the On Neck pattern:

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  • First, there must be a downward trend going on.
  • There must appear a towering black (bearish) candle.
  • Finally, the black candle must be followed by a smaller white (bullish) candle.
  • The white candle’s close should be virtually identical to the previous candle’s low. Therefore, it should not climb above the low price of the black candle.
  • Look for a black candle on the third day to confirm the On Neck pattern and continue the downward trend. A long body, as well as a gap between the second and third days, demonstrate strength.

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Trading with On-Neck Candlestick Pattern
The security is in a primary downtrend or a significant correction inside a primary uptrend. A long black genuine body is displayed by the first candle. Bearish complacency grows due to the weak market action, while weakening bulls retreat completely. On the second candle, the security gaps down and sells off to a new low, but buyers seize control and boost the price back to the preceding close, but not above it. According to the bears, the bulls were unable to drive the price above the previous close. The bears will seize control of the next few candles, sending the price lower according to the idea. But, as previously stated, this only happens roughly half of the time in actuality.

Difference between On-Neck and In-Neck Candlestick Pattern
The in-neck pattern, which is also a two-line continuation candlestick pattern, is another option. This is also a bearish pattern in a downtrend with the first candle being bearish. The second candle is a bullish one, with a slightly higher closing price than the prior candle’s closing price. The closing price level shows the distinction between an in-neck and an on-neck candlestick pattern.​
  • The in-neck pattern indicates that the trend is still bearish and will continue, but it is not as intense or severe as the on-neck candlestick.​
  • Because the two patterns are so similar, you’ll have to scrutinize them closely to figure out which is which.​
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Limitations
The price could move higher or lower with about equal probabilities if the pattern is followed. The pattern’s moves to the upside tend to be larger than the pattern’s moves to the downside. Trading based on the pattern could lead to a variety of outcomes. While a lower breakout is as simple as a dip below the low (or close) of the second candle, the trader must decide whether they consider a move over the high (or close) of the second or first candle to be a higher breakout point. Because the candlestick pattern lacks an intrinsic profit goal, a mechanism of profit-taking must be established. The pattern works best when combined with additional technical indicators and procedures for confirmation.

Bottom-line
We hope you found this blog informative and use it to its maximum potential in the practical world. Also, show some love by sharing this blog with your family and friends and helping us in our mission of spreading financial literacy.

 

Solid ECN

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Triple candlestick patterns: Understand Three Outside up and Three Outside Down Candlestick Patterns
  • The outside three up/down candlestick patterns are variations of chart candle reversal patterns. They are usually used to indicate a trend reversal.
  • The three outside up/down candlestick patterns are distinguished by one white or black candlestick immediately followed by two candlesticks of the opposite hue.
  • These varieties of the three outside patterns aim to read near-term changes in trader sentiment by leveraging the market’s psychology.​
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What is Three Outside Up Candlestick Pattern?
Three successive candlesticks form the three outside up pattern, which usually appears after a bearish trend. The movement of these candles always indicates whether or not a trend reversal is imminent.

A single bearish candle is followed by two bullish candles to form the pattern. For counter-trend trading tactics to work, accurate detection of this pattern is critical.

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Formation
Below is the formation of the Three Outside Up Candlestick Pattern-

1. The market must decline for a three outside up pattern to appear.
2. The pattern’s first candle will be black, signifying a downward trend.
3. A large white candle will be formed next. It will be long enough for the first black candle to be completely contained within its true body.
4. The third and final candle, which indicates three outside up, must also be white. This candle, however, should close higher than the second candle. This shows that the downward trend is changing direction.

What Traders Interpret from a Three Outside Up Pattern
With the closure lower than the open, the first candle maintains the bearish trend, showing significant selling interest and building bear confidence.

The second candle begins lower but quickly reverses, crossing through the first tick in a bullish showing. This price action raises a red flag for bears, signaling that those gains should be taken or stopped because a reversal is possible.

The stock continues to rise, with the price now above the first candle’s range, completing a bullish outside day candlestick. This boosts bullish sentiment and triggers buy signals, verified when the security makes a new high on the third candle.

Trading Example
One of the important characteristics of this technical indicator is that the size of the engulfing candlestick, which is the second of three, determines its power. The three outside up patterns is more prominent the larger the second candle.

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The smaller the negative downtrend becomes, the weaker its indication becomes. As the price movement increases with the second candle, bullish sentiments appear to be outnumbering bearish sentiments.​
 

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(RSI) Range Shift- A Simple but Effective Trading Strategy​

The Relative Strength Index (RSI) is the most popular technical indicator among traders worldwide. It was created in the 1970s by Wells Wilder. In his 1978 book New Concepts in Technical Trading Systems, Mr Wilder advised that the indicator’s default setting be 14 days (half-moon cycle). The RSI is commonly used to determine overbought and oversold levels. Divergence, Reversal, and Failure Swing are other terms associated with using RSI. However, Andrew Cardwell, commonly known as Dr RSI, discovered the Range Shift idea. Furthermore, he found that the RSI indicator may be applied to trending and non-trending markets.

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What is the RSI Range Shift concept?
RSI Range Shift is a phenomenon that occurs when the RSI indicator ‘shifts’ from one specified range to another in response to changes in the price movement of an underlying asset. There are five different types of RSI ranges.

Super Bullish Range-60-80
Bullish Range-40-80
Bearish Range-20-60
Super Bearish Range-20-40
Sideways Range-40-60

Trading Examples


1. Super Bullish Range
In this situation, the RSI refuses to fall below 60 and seeks support near 60. RSI tends to swing between 60 and 80 during this highly bullish era. Consider the following Reliance example.

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2. Bullish Range
When a stock is rising, the RSI will not fall below 40. Instead, it looks for help around the level of 40. For example, see the Lupin chart below, where the RSI refused to move below 40 and fluctuated between 40 and 80.

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$50 No Deposit Bonus​

Solid ECN offers its clients multiple trading benefits to stay at Solid ECN, starting with a $50 Trading Bonus. In other words, we give you $50 worth of credit (non-withdrawable) just for opening your first Real Account, allowing you to test our products and services by starting to trade with no initial deposit.

Who Can Claim it?​

This promotion is available to all traders opening a Solid ECN Real Account for the first time. This promotion is not available for the citizens of Indonesia, Russia, Uzbekistan, Tajikistan, Egypt, Iraq, Pakistan, Syria, Afghanistan, and Palestine.

There is a 5-day limit from the date of opening your account in which time you must claim the bonus before it is rendered unavailable.

How to Get the Trading Bonus?​

To claim the Bonus, you need to follow a few simple steps:​
  • Open a Real Account​
  • Log in to the Members Area using your credentials.​
  • Provide the relevant identification documents to validate your account (ID - Address - Valid cell phone number)​
  • Click the Create No Deposit Account button to Claim your Bonus​

 

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ASK (OFFER) PRICE​

The price at which the market is prepared to sell a product. Prices are quoted two-way as Bid/Ask. The Ask price is also known as the Offer. In FX trading, the Ask represents the price at which a trader can buy the base currency, shown to the left in a currency pair. For example, in the quote USDCHF 1.4527/32, the base currency is USD, and the Ask price is 1.4532, meaning you can buy one US dollar for 1.4532 Swiss francs.

In CFD trading, the Ask also represents the price at which a trader can buy the product. For example, in the quote for UK OIL 111.13/111.16, the product quoted is UK OIL and the Ask price is £111.16 for one unit of the underlying market.

 
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