The Williams %R indicator uses highs and lows within its calculation, so this is a bonus, and it is inverted by multiplying it by -100 to give the ‘low' and ‘high' figures.
The COT is quite useful to forex traders especially when observing market reversals. However, it is still better to study and even do some back testing on COT reports and incorporate the trader's own feelings of what may actually work. After all, what really drives market prices are the peoples reaction to reports such as the COT, on politics and the economic movement. What is best is to use the COT, or other tools such as the Fibonacci numbers and the Stochastics, and combine it to what is actually happening in the world. This way, the trader may be able to gain an insight of the markets probable movement and may be prepared to do something about it.
Above all, the most important thing to understand about Forex trading is that it is completely personal to you. For you to be successful it is all about you, your personality, your attitude to risk, your personal and financial requirements. Every single trader is different - if you think that there is some 'holy grail' or automated strategies or rules that you can be taught and follow don't you think that the largest of institutions with their unlimited budgets and rocket scientist traders would have found it?
Nonetheless, when choosing a Forex broker, it's important to consider the spreads of distinct brokers. You need to evaluate Forex brokers and try to find a broker with low spreads. Obviously you do require to look at a broker's overall service, but if you are tied in between a couple of brokers or even a few, do think about the currency trading expenses that each and every broker will present you with.
Moving averages have the same goal. They are the ones who identify the forex trends in a particular period and they iron out the price fluctuations day to day. The equation they use is adding the closing price and dividing it by the period where it is calculated. This is mostly used by technical forex traders since it is a great tool in identifying trends.
4. Many Forex trading methods demand a trader to "day trade" Forex. In other words many of the methods and systems will require you to sit in front of your computer practically 24/7 to be able to 'react'. For most would be Forex traders this is basically impossible.
How volatility affects the option pricing is reflected in the in Vega. In other words, its sensitivity to volatility. Options tend to have price increases when the underlying asset's volatility increases. In this case, volatility is good for the buyer of an option and bad for the seller of an option. Vega is positive for long option and negative for short option.