Forex traders often look at indicators such as Bollinger Bands, Pivot Points, MACD, Moving Averages and the such to help them determine where to enter or exit trades. Using technical indicators is fine, however many traders overemphasize their importance or just plain misunderstand them.
Many forex traders think that they can simply download an indicator and then mechanically apply it into their trading and do so profitably. This is just a plain illusion. Successful traders realize that there is a lot more to using indicators than just asking them to generate buy/sell signals or pin-point exact entry points. Technical indicators for them represent just one part of their trading strategy.
Let¡¯s take a look at some of the reasons why you should not put all your faith into those sometimes confusing little indicators.
Take Moving Averages (MA¡¯s) for example. They are "supposed" to show the direction of the trend. The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and the 21day MA but they are only valid on daily graphs. Some forex day traders say that a good signal is when the 50day MA is crossed by the 13day MA and that when this occurs you should trade in the direction of the cross.
The problem with this (apart from the fact that it only works on daily graphs) is that these types of ¡°crosses¡± do not occur often enough for traders to exploit them. This can often lead to a situation where traders are seeing what they thought was a cross now reverse and uncross. Even worse, it can lead to a situation where day traders are "chasing" and trying to anticipate a cross. If you are doing this, you are distancing yourself from the market which you are trying to trade. Not only are you trying to guess what the price is going to do next but you are guessing what the indicator, based on the prices, is going to do next.
Other problems with technical indicators involve issues with the quotes and prices given to you by your broker. Forex brokers are market makers and as such different brokers will give you different quotes and prices at a specific point in time. Naturally, a different price could lead to a situation where different traders, trading the same market have the same indicators giving them different responses. That¡¯s how arbitrary technical indicators can be.
Finally, a lot of these technical indicators were developed by people trading the stock market. With the growth of computers and software packages that incorporate these indicators, technical analysis has become very popular and spread to other markets such as the forex market.
Sigma Forex is leading European professional online trading Brokers registered in the Switzerland and most of the EU countries. It was founded by professional private investors including (banks, traders, brokers, and software developers), which enabled Sigma to identify the essential needs of the Forex participants from the start.
Since 2003, Sigma’s aim has been to provide the best, powerful and most suitable currency trading technology along with superiority in execution, competitive services, and dependable customer service. Over the past years, Sigma has quickly become one of the world’s leading online retail currency trading institutions, providing integrated global trading systems, analysis techniques and the most reliable and sophisticated online trading software. We offer internet trading through Meta Trader. This trading platform is very stable and reliable. It is highly regarded and very popular among traders.
How does the SHI Channel indicator work?
The SHI Channel indicator and as the all of the channel indicator uses the highest high and lowest low of the price to determine the upper and lower bands of the channel.In the SHI Channel The channel is calculated according to the given period of calculation and the time frame of the used chart, and the channel is self-adjusted (Like the Bollinger Bands).As you see in figure 1 there are two thick lines that indicates the upper and lower channel and a dashed center line.
The channel gives the overall direction of the price movement - up or down - and may change from time to time, specially if it used with a low timeframe (1, 5 and 5 minutes).
How to trade using the SHI Channel indicator?
Actually you can’t trade with the SHI Channel indicator alone, it will not tell you when to enter the trade neither when to exit, The SHI Channel indicator telling you the overall direction of the price trend and the channels with the middle line warn you how much the trend is strong or weak, however , you have to use another indicators to generate the entry/exit signals
So.. for entry and exit.. i will use chart pattern.. you don't have to be an expert in chart pattern.. to make hundred bucks a month in fx.. i only focus on double top or bottom pattern, head n shoulder pattern, inverse Head n Shoulder, Ascending and descending triangle (the breakout of these triangle at 4h can give you about 400 pips)
Why day trade once you get a good seat and the market is going your way. It is always more profitable to ride even the short wave for 2-10 days by adding up. In general, you must day trade only when you are losing. To find a buy entry seat for short-term trades, you can study the "accumulation and distribution patterns and 20 MA" in 8, 4 hourlies or 30 min "Line Charts" (or Candle Charts), together with MACD "overbought and oversold indicators" with its Patterns. If you study them for awhile you will understand when it the best entry point. The remainder is for money management and discipline and of course, experience. Good trades. 
On technical side of the trading, the first thing to do is to find out the trend in ones trading time frame and the proper trading strategy for that trend. Some ride positions for months, while some ride positions for less than an hour or a day and their views of the trend obviously differ. For a trader who is running a position for months, a daily fluctuation may be just a meaningless noise while for a daytrader or an hour trader, a daily fluctuation could be a monstrous tsunami. Having a precise definition and a technique of identifying a trend and the turn of a trend in a trader`s time frame, and adopting the right strategies for that trend is the first elementary step in a hard school of trading. Imho.
I keep my technical side on any pair as simple as possible largely relying on other`s moves to see how I can take advantage of the situation. So for me the strategy is to "range trade". Please always give stop order per your risk profile when you open any new position. Medium-term reversals can be confirmed only in monthly, weekly and daily charts.
Chart reading is not to predict the tops or bottoms of any move, but to confirm the change of trend as soon as they are made and adopt right strategies in that new trend.
Good trades.
How to use SHI Channel?
Now we will explain how to trade with this method step by step.
Step 1. Open GBP/USD chart and use 30M Timeframe with candlestick pattern.
Step 2. Attach SHI Channel indicator, the Stoch (5,3,3) and RSI(7).
Please see the figure below to make sure that you have a right chart :
Wait for the price touch the lower/bottom line of SHI Channel, check the other indicators mentioned above, if it has an oversold condition at the same time we could enter buy order with TP 20-50 Pips. Check the example below :
As seen above, GBP/USD have an oversold condition at May 23 2007 and our indicators offering buy signal. We could put buy order at closing of bear candle or at price 1.9723 with TP 50 pips (1.9773) and SL 40 Pips (1.9683).
We will see how this method working :
As figured above our buy order hit the TP 50 pips at price 1.9773. Now we will learn to catch the sell signal.
Sell Signal :
Wait for the price touch the upper line of SHI Channel, check the other indicators mentioned above, if it has an overbought condition at the same time we could enter sell order with TP 20-50 Pips, as figured below :
In the chart above GBP/USD have an extreme overbought condition at May 23 2007 and our indicators offering sell signal. We could put sell order at closing of bull candle or at price 1.9888 with TP 30 pips (1.9858) and SL 40 Pips (1.9928).Once again we will see how this method working :
Yup, our 30 pips target price executed at 1.9858. So totally we have 80 pips form both buy and sell order in one day.
So simply method?
Yes, this method is simple and profitable, especially we have sideaways market. But please note that the strong signals is only generated when price touch Top/Bottom line of SHI Channel and the other indicators have an overbought/oversold condition at the same time also an extreme overbought/oversold are highly recommended to enter the market.*
If you want to keep your hand on the pulse of financial markets and to assess trading opportunities on the Forex market, Sigma Forex is the right place for you. We offer a powerful Forex trading platform to engage on Forex market and online trading. Forex market quotations, Forex market order placement and confirmations are available online 24 hours a day and 5 days a week! At Sigma Forex you have the opportunity to take advantage of mini Forex trading with flexible lot sizes and trade in any fractions of a low in base currency.
Do you think it's too hard to open your account and start Forex market trading? Here are Sigma Forex Financial Company you will find various useful aspects, such as around-the-clock trading, up to 1:100 leverage (please note that high leverage is associated with high risks make sure to read Risk Warning on this website), mini Forex accounts and transactions in a fraction of a lot - and many other tools to engage the Forex market. Sigma Forex allows our clients to trade 14 currency pairs. If you are looking for flexible FX online trading platform, Sigma Forex offers you all new Rumus 2 platform loaded with FX tools essential for trading, analysis. Beside the traditional functionality of "stop" and "loss", our FX currency trading system accepts orders to close, reverse, increase or decrease size of your position.
Whether you are the beginner, who wants to start with mini Forex trading or advanced trader; whether you prefers fundamental or technical Forex market analysis, our Forex online trading platform may meet the needs of different investors' groups. Internet dealing FX currency trading system gives you real-time market quotes, fast order executions, integrated streaming Dow Jones News, generated reports and much more. RUMUS2 analytical Forex market platform allows you to keep track the real time data feed, historical quotes database, variety of tools and indicators. With Sigma Forex Financial Company you have a chance to create your own indicators and trade the full value of your account.
Irregardless of your investment size (standard or mini Forex trading), we at Sigma Forex will make everything possible to provide you with superb service, while delivering a true FX online trading experience. Please note, before you start trading you should read about terms and conditions as well as Risk Warning displayed on this website.
Forex Indicators
Whether you are an experienced Forex trader or just starting out with your first account, you will agree that knowing what prices will be tomorrow, next week or next year can make investment much easier. Such tools as Forex indicators and Forex signals are dedicated to help you achieve the maximum results in Forex trading allowing you to profit from the market trends. However, you should never forget that Forex trading is associated with significant risks, especially in case of highly leverage transactions. If market moves against you could lose your entire deposit.
Forex currency trading is the fascinating way to earn money online, but if you are serious about entering this lucrative market, you should consider the learning and understanding of the number of Forex trading indicators and Forex trading signals that will give you an invaluable help on predicting with the high probability the direction of foreign currency rates fluctuations. Sigma Forex is proud to offer you Forex indicators and Forex signals that have proved to be valuable tools for beginners and expert traders.
Using reliable Forex trading indicators and Forex trading signals will help to read the market movements and raise a profit margin. The first step to profit from both short and long-term trends in to understand what affects the particular trend and know how to identify these factors. The next step is the employing a worked out trading strategy that is specific for particular trend. A combination of real time market news, Forex indicators, Forex signals, forecasts, reviews and daily market comments will help traders to make more deliberate decisions.
If you are interested in benefits from the superior profit potential of the Global foreign exchange market and going to achieve stable trading profits for years, Sigma Forex makes it possible for the individual traders and small business investors to make consistent trading profits by using our powerful platform with Forex trading indicators, Forex trading signals, forecasts, tutorials, real-time breaking world news and reliable comments. However, since Forex trading is inherently risky, Sigma Forex does not recommend using a leverage highter than 20:1. Please sepdn some time reading about Risks involved in Forex trading in our Risks section.
Learn How To Find The Best Forex Trading Platform
won't we all want expert staff available for us at all times, anytime. Preferably, the forex trading platform will have an account service manager working closely with traders. The perfect forex trading platform should have customer service
staff that speak with forex traders over the phone, over e-mail, or over an advanced online CHAT system.
The spread is the difference between the bid price and the ask price for the currency being traded. The broker adds this spread onto the price of the trade and keeps it as their fee for trading. So you can consider this as a hidden commission.
One good thing about the spread is you pay it when you buy and not when you sell. A trading of 4 pips vs. 5 pips makes a difference of 25% on your trading costs! This makes the point clear why you would need a low spread Forex trading platform.
I do not want to have to download software and wait for the proper set up and getting rid of the bugs before being able to trade. The questions to ask are: Is their internet platform friendly and easy to use? Do you need to download any software? Can the trading be performed immediately, without any obligation to a certain configuration or a computer?
Of course it goes without saying that any forex trading platform you decide on should be highly secure to protect your account and private information. It should allow you to fund your trading account securely with a variety of options including credit card, western union and PayPal if needed.
The trading platform should be easy to use and understand. It should be reliable during fast moving markets. The platform should offer services like one click buying or selling, trading directly from a chart, supports mobile devices, trailing stops, etc.
