Here we will give you some tips on how to use Forex charts correctly and it's a fact that technical analysis works and is a great time efficient way to make big gains. Let's get started and find out how to enjoy Forex charting success...
Firstly before we begin, there are a few key errors traders make which you must avoid and they are:
Charts are not a way to predict the future! You don't predict you wait for confirmation of price action, charting is an art not a science and the simpler your Forex trading system is the better - complicate it and it will have to many elements to break.
So how do you put together a simple Forex trading system based on technical analysis? Let's take a look.
1. Support and Resistance
You will see levels on charts that support or resistance and your aim is to decide whether these levels will hold or break. You can see them on Forex charts and now you have to make money from trading these levels and next we will look at how to do this.
2. Use Breakouts
Most traders like to buy into support and sell into resistance and that's fine so long as you confirm first the level has held - don't predict. The most profitable way of trading however is to trade breaks to new highs or lows. It's a fact that all major trends start from and continue from, new highs or lows and buying these breaks can be hugely profitable.
3. Confirm Confirm Confirm
So you don't predict what may happen use a few momentum indicators to confirm if a level will hold or break and the RSI and Stochastic indicator are great for this. Look them up, as you can learn them in about 30 minutes and they will visually show you if momentum is accelerating or declining and make sure momentum supports your view.
For example, if prices reach resistance and prices turn down supported by momentum, you can go short. If prices breakout and momentum is accelerating, you can go with the break.
Always use momentum, get it to support your view and you will increase your odds of success.
4. Be Patient and Trade Longer Term
You don't get rewarded for trading often, you get rewarded for being right and you need to wait for high odds set ups. Try and focus on the longer term trends that last for weeks or months and don't trade short term.
Keep It Simple
If you were to trade using just simple bar charts and focus on key support and resistance levels, with a couple of momentum indicators to confirm your view, you will have a simple robust Forex trading strategy which will work and help you spot some high odds set ups.
Never over complicate you're trading - keep it simple, employ sound money management, trade with discipline and you could be making big money with Forex charts in around 30 minutes a day.
Firstly before we begin, there are a few key errors traders make which you must avoid and they are:
Charts are not a way to predict the future! You don't predict you wait for confirmation of price action, charting is an art not a science and the simpler your Forex trading system is the better - complicate it and it will have to many elements to break.
So how do you put together a simple Forex trading system based on technical analysis? Let's take a look.
1. Support and Resistance
You will see levels on charts that support or resistance and your aim is to decide whether these levels will hold or break. You can see them on Forex charts and now you have to make money from trading these levels and next we will look at how to do this.
2. Use Breakouts
Most traders like to buy into support and sell into resistance and that's fine so long as you confirm first the level has held - don't predict. The most profitable way of trading however is to trade breaks to new highs or lows. It's a fact that all major trends start from and continue from, new highs or lows and buying these breaks can be hugely profitable.
3. Confirm Confirm Confirm
So you don't predict what may happen use a few momentum indicators to confirm if a level will hold or break and the RSI and Stochastic indicator are great for this. Look them up, as you can learn them in about 30 minutes and they will visually show you if momentum is accelerating or declining and make sure momentum supports your view.
For example, if prices reach resistance and prices turn down supported by momentum, you can go short. If prices breakout and momentum is accelerating, you can go with the break.
Always use momentum, get it to support your view and you will increase your odds of success.
4. Be Patient and Trade Longer Term
You don't get rewarded for trading often, you get rewarded for being right and you need to wait for high odds set ups. Try and focus on the longer term trends that last for weeks or months and don't trade short term.
Keep It Simple
If you were to trade using just simple bar charts and focus on key support and resistance levels, with a couple of momentum indicators to confirm your view, you will have a simple robust Forex trading strategy which will work and help you spot some high odds set ups.
Never over complicate you're trading - keep it simple, employ sound money management, trade with discipline and you could be making big money with Forex charts in around 30 minutes a day.
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Article Source: http://EzineArticles.com/?expert=Samuel_Leslie_BerkovitsFor free 2 x trading Pdf's, with 50 of pages of essential info on Forex Charting Success visit our website at: http://www.learncurrencytradingonline.com
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