How to find the best trade setup in Forex marketby Dwayne Buzzell Forex
Everyone can trade the Forex market just by opening a trading account with the Forex brokerage firm. But this doesn’t mean that everyone is making money by trading the financial instrument. If you do some research then you will be surprised to see that most retail traders are losing money due to their lack of trading knowledge and discipline. But if you look at the successful traders in the United Kingdom then you will be surprised to see that most of them are very good at finding the perfect trade setup. Do you think that they are born talented? Every single one of them has worked really hard to understand the basic nature of this market. Based on their trading knowledge they have developed a balanced trading system which helps them to make money on regular basis. Today we will discuss how to find the best trade setup to maximize the profit potential in trading.
Trading with the market trend
Most of the time the traders are not able to spot the perfect trend in the most traded currency pairs. They are simply trading against the long-term market trend and losing a huge amount of money. The full-time traders in the United Kingdom are very smart in finding the right trade setup. They always do the daily time frame analysis so that they can easily find the long-term market trend. Once the trend is identified they spot the key support and resistance level in the higher time frame. Instead of placing trades in favor of the market trend they simply wait on the sideline to for the right price action confirmation signal. It’s true that you can trade the market without any confirmation signal but it will increase your risk exposure in Forex trading.
Using the price action trading strategy
When you are dealing with the dynamic nature of this market you have developed a unique trading system. Most professional traders prefer price action trading strategy due to its simplicity and extreme level of profitability. You can use this system to place high-quality trades in the most traded currency pairs. But before you start trading with price action confirmation signal you need to demo trade the market to understand more about this trading system. If you are taking too much risk then you are not going to make any real money. So consider your demo trading account as your learning platform. Try to develop a solid strategy based on price action trading system to place high-quality trades in favor of the long-term market trend.
Avoid the indicators
The retail traders are always facing losing trades since they use too many indicators. Indicators are nothing but the trading tools which will help you to find the false trading signals. But if you consider them as your prime tools then you not going to make any money. You need to understand that indicators are basically two types. The first type is the leading indicators which will always give you early trading signals. So it means you will never be able to trade with the live market movement. The second type is the lagging indicators and it will never allow you to ride the long movement of the market. So instead of trading with the indicator based trading system, you need to develop a simple but reliable system based on price action trading strategy.
Do the fundamental analysis
Fundamental analysis helps the traders to find the trend strength of the currency pairs. it’s true that being new to this industry analyzing the fundamental data will be a little bit complicated for you but if you try hard then within a short period of time you can easily make a good trading decision. You must develop a trading system based on technical and fundamental factors or else you won’t be able to place high-quality trades.
Created on Jan 2nd 2018 04:41. Viewed 140 times.