There are many factors that determine how a trader can achieve success in forex trading. In particular, the sixth following tips is very important for you to be a good forex trader:
- Identification ofthe trends thatwillbe traded
- Always checknews
- Identification ofthe level ofsupport andresistance
- Usetechnical indicators
- Buywhen the priceis down, andsellwhen the pricerally(followthe direction ofthe trend)
- Usepropermoney management.
Identification of the trends that will be traded
As traders in the currency market (forex), you will quickly feel at ease with a time interval that is best suited to your trading style. Although there is no specific time frame which works 100%, I recommend You to start with the long-term chart, then gradually using short term chart.
By analyzing the daily chart first, You will be able to determine the long-term trend. This long-term trend, there are three: the trend going up, down, or sideways. Determine the positions that may be taken on a daily chart will help you to look for certain indicators in the chart on the lower timeframe in order to find the price and time of entry. If not daily chart showing the direction upwards or downwards, you can observe the 4 hour chart or chart 6 minutes. This also applies for active traders using super-chart-per-minute for entry and exit signals.
Identifying trends is one of the most important decisions that you will make after a review of the short and long term trends, as well as check the announcements and news of what will be released in the near future. The saying "the trend is your friend" is still valid today, as long ago, and is the number 1 tool most widely used in history. It is very crucial for you to follow the trend and do not anticipate the trend by opening the entry too early. While you study the chart and timeframe, you will probably see any possibility of reversal (inversion)
Always monitor the news
A good strategy is to make sure that you know of a potential news if you intend to open a trading position before the news was released. If you really decide to open position before important news is released, make sure that you're applying stop loss too. A number of news will affect the market very quickly and dramatically. While other news like war, elections, leisure, and bad weather, may have a significant impact that typical only applies to each pair at forex.
Therefore, it is very important to recognize the character of currency pairs. EURUSD, for example, relate to the difference between the interest rates of the European Central bank (ECB/European Central Bank) and the US central bank (the Federal Reserve/FED). Also, the strong Dollar could push the EURUSD down. Such examples can be found in almost all the major currencies. Due to the difference in character between currency pairs this is, I recommend you to learn some of them in depth and trade only pair-pair that you recognize. Find out how and why a currency pair did the movement will give understanding and can so increase your profits.
Identification of the level of support and resistance
Level-level of support is very important to be known and used appropriately. The levels is not only used for menentukn the price of entry and exit, but also to set stop loss and limit orders. Many of the trend reversal occurred immediately after the price bounces from the level of support or resistance is important. Identify the level of prices it could help you to understand why tern a currency change. Many newcomers wonder why the trend of a currency change soon after their opening position. Well, the level of support and resistant this is what being a big factor for the trend reversal.
Use technical indicators
The proper entries in a position trading is the most important part when trading in any market. By mastering a few charts and indicators, you will be able to make better decisions in any market conditions. The most important here is to have some indicators that indicate the same trend and does not open position when the indicators showed a different signal (mixed signals). Seek confirmation from a number of indicators before you open a trading position. When you monitor the trends in the short term or long term, don't miss checking out indicators such as MACD, RSI, stochastic indicators, and to investigate the possibility of signal overbought or oversold. Despite a currency pair are quite strong and resistant or not near support, but the possibility of reversal remains there when the couples are already on overbought or oversold conditions.
Buy when prices fall, sell when the price rally (follow trends)
When the market moves follows a certain trend, there are times when turning small steps will occur (the retracement). To maximize profit, you need to open a trading position or open a second position in the lower level when prices fall or on top of the price rally.
In this way, you will be able to set a stop-loss limit on the real trend reversal and avoids losses due to position is closed by a retracement. The levels of resistant and support to assist you in determining the likely entry points as well as a retracement. By using the indicator Fibonacci Retracement, you can calculate the price of "buy" and "sell", also determines the potential of retracement of a pair of currencies. I strongly recommend that You check out the history trends of a currency pair to determine percentage retracement that is common.
Use proper money management
Using money management is your last step on the road to success, but it could be the most important step. Proper money management will minimize losses and maximize profit. I never stopped stressing that the use of proper money management will be the most powerful tool and be Your key to success in forex trading.
As I said before, it is very important for the trade with sufficient capital. Sufficient capital will allow you to maintain a trading position along with the movement of prices, and doesn't force you to experience profit or loss too fast. Be patient. Apply the ratio risk/reward that will make you reach your profit in the long run, although some positions do not provide profit. Follow the same rules at any time, and accept your loss. Trade on the forex market or other financial markets when you're afraid of losing money is a bad idea. It will make you jittery, traders and emotions will move trading-trading. Last but not less important is, always use the stop limit (SL)!
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