Investors face a lot of difficulties during their trades. Every professional Forex trader always recommends that newbies follow a guide to making progress in their trading career. Before they start trading, they should develop a trading plan and follow it. Many businessmen use tools and indicators to analyze the market and the price. An ideal way to improve the trading strategy is to develop your process to make decisions.
This process begins by observing the basics of the markets, as well as the currency pairs. An investor has to start with a higher timeframe and gradually move to a lower one. Eventually, they should concentrate on the higher timeframe on a daily basis. Depending on the volatility and the market condition, investors may enter either into the 4-hour or 1-hour trading chart. By progressing with this procedure, you can observe a wider view with minimum resistance. Elite investors in Mena region also encourage rookie traders to learn from the top traders at Saxo. To find more info you can visit their website.
Identify the trend and the market conditions
A trader can label the movement of the trend as lower, higher, or ranging. There are several paths in which the FX investors can identify the movements of the price. However, anybody can determine the approach by simply looking at the swing-lows or the swing-highs. The uptrend can be marked by a complete series of higher-lows and higher-highs. In contrast, the downtrend is marked with some lower-highs and lower-lows. Finally, the sideways market, which is also known as the ranging market, doesn’t have a clean sequence. The maximum and minimum peak values remain at the same level.
Sometimes, market volatility is also taken into consideration. Generally, the highly volatile environment will have greater chances as the market moves faster. This market condition will give the trends a fresh and clearer look if the Forex trader is interested in trading in the shorter timeframes.
Realize and use the resistance and support level wisely
You must understand the resistance and support level of the chart. It is used as initial input for figuring out the quality setups. A Forex trader can find several ways to identify the resistance and support level. However, the most popular method is the most superficial resistance and support with the trend-lines and analyzing the slope. Don’t ever think that the price will touch the same point often. It can go close, but it will hardly ever be at identical points.
Analyzing the candlesticks
The analysis of the candlesticks is another effective method to be a better Forex trader. Candlesticks are regarded as the triggers for entering a trade. Sometimes investors also use them to place the stop-loss order. Remember that a candlestick can start the entry of a trade.
Observing and realizing the chart patterns
Observing the chart patterns can help an investor identify the upcoming movement of the market. There are several kinds of chart patterns, like descending and ascending wedges or head-and-shoulders. The ascending wedges are marked by the higher lows with a flat top, and the descending wedges work conversely. A descending wedge is identified by shorter highs with a flat bottom part. The head-and-shoulders pattern is a traditional pattern with bullish and bearish movement.
Getting everything together
All the points mentioned above are the constituents parts of a trade execution, but matching and mixing them can bring your conviction to a particular point and help you set up the trades. For instance, a bullish movement can pull back to the confluent price. But the situation may not be so perfect. A few factors may align with one another, but you may receive the edge and the advantage of it.
Following this simple guide can make a newbie businessman be a professional one gradually. Many beginners come to start their trading career to make profits, but most of them lose money. This guide can help them realize essential things about the market.