Instructions

You may input any prices you need in the second column of the table. If you are using non-standard lots, you may input the size of your lot in the bottom cell.

Other currencies with same USD pip value EUR/USD GBP/USD, AUD/USD USD/JPY EUR/JPY, GBP/JPY, AUD/JPY USD/CHF EUR/CHF, GBP/CHF USD/CAD EUR/CAD

Quick Review

Pip (or Points) is a term used in Forex market to indicate the smallest incremental move an exchange rate can make. Depending on context, normally one basis point (0.0001 in the case of EUR/USD, GBD/USD, USD/CHF and .01 in the case of USD/JPY).

Lot or Contract is the standard unit of trading on certain exchanges

While we briefly covered candlestick charts in the previous lesson, we’ll now dig in a little and discuss them more in detail. First let’s do a quick review.

What is a Candlestick?

Back in the day when Godzilla was still a cute little lizard, the Japanese created their own old school version of technical analysis to trade rice. A westerner by the name of Steve Nison “discovered” this secret technique on how to read charts from a fellow Japanese broker and Japanese candlesticks lived happily ever after. Steve researched, studied, lived, breathed, ate candlesticks, began writing about it and slowly grew in popularity in 90s. To make a long story short, without Steve Nison, candle charts might have remained a buried secret. Steve Nison is Mr. Candlestick.

BID RATE:

The rate at which traders can currently sell a particular currency.

Okay so what the heck are candlesticks?

The best way to explain is by using a picture:

Candlesticks are formed using the open, high, low and close.

• If the close is above the open, then a hollow candlestick (usually displayed as white) is drawn.
• If the close is below the open, then a filled candlestick (usually displayed as black) is drawn.
• The hollow or filled section of the candlestick is called the “real body” or body.
• The thin lines poking above and below the body display the high/low range and are called shadows.
• The top of the upper shadow is the “high”.

1. The bottom of the lower shadow is the “low”.

Relative Strength Index, or RSI mean
A technical indicator used to compare the magnitude of recent gains to recent losses to determine overbought and oversold conditions in the market. . It can be calculated using the this formula:

Rsi=100
100- 1+rs

readings below 20 refer to oversold, while readings over 80 indicate overbought. the RSI ranges from 0 to 100

Using RSI
Relative Strength Index is used as the stochastics, you can see From the chart RSI dropped below 20, it will be an oversold market., the price back up After the drop

The RSI is best used as a valuable complement to other stock-picking tools. Relative Strength Index, or RSI, is like the stochastics in that it means overbought and oversold conditions in the market. It is scaled from 0 to 100. readings, while readings over 80 indicate overbought, below 20 indicate oversold


USING RSI
RSI can be used like stochastics. From the chart ,you can see that when RSI dropped below 20, it is an oversold market. After the drop, the price shot back up.

RSI is a famous tool because it can be used to indicate the trend formations. When you find a trend is forming, you can take a look at the RSI and look at if it is up or under 50. If you are looking at a possible uptrend, you should be sure to make the RSI up 50.and when f you are looking at a possible downtrend, you can make sure the RSI is under 50.

We can see in the chart that a possible uptrend was forming. To avoid the fakeouts, we should wait for the RSI to cross above 50 to confirm the trend., It will be a good indication that an uptrend has formed, When the rsi passes up 50

We have many types of indicators, let's see how we can put all of what you just learned together...