Specifically, there are two key aspects of your account statement that give a valuable insight into how well you are performing as a trader. Essentially, these two key aspects are the relationship between your average winning trade to your average losing trade and the win per trade ratio or also known as the winning percentage.
When trading using trend lines, you are waiting for a moment when the price of an instrument gets to a certain price level, off of which the market is very likely to bounce.
When using this strategy, every trader has to remember that the market can react two different ways:
Whether we like it or not, trading is about estimating and probability that can lead us to our estimations.
That is why this article should not primarily be a guide to profitable trading strategies based on Pin Bar patterns, but an assistant to those who use these patterns so they can eliminate patterns that have a low chance of success.
Let’s go through some techniques that more experienced traders use to eliminate undesirable patterns and false signals.
Their initial optimist often speeds things up at the beginning, and that is why new traders often forget about preparation. Nowadays, it isn’t possible for a person to become a successful trader right away.
Finance, whether we like it or not, is a serious topic that requires a cautious approach. This article attempts to explain (not only to rookie traders) how to execute contracts on the financial markets and have a regular job.
This is why most traders prefer only one of those styles and usually stick to it throughout their trading careers.
However, that is not always the best way to go about trading. The Forex market is a 24-hour market that offers the opportunity to profit in both bull and bear markets – contrary to stocks or other markets.
If we wait for a trend to develop in order to take a trade we might have to wait for quite a while, and, in fact, also miss many other opportunities to make money in the periods when the market is not trending.
Let’s mention a couple of examples that make this statement considerably relevant. One great example is the changing of the seasons. Our lives happen in cycles as well, because we experience good and bad life periods that alternate.
And if we look at life outside of the context of our own existence on this planet, we’ll see that the cycle of life consists of microcycles and that those microcycles are our individual lives.
One such possibility is investing in the strategies of experienced traders who trade for a living either on Forex or on other markets. But to be able to legally manage their clients’ funds, they must get the necessary authorization or licenses, which is not an easy task.
A range does not have to be a horizontal one, however, rather it can be in any form inside of which the price is contained for a certain period of time. Consolidation patterns, such as flags, triangles, and channels can also be considered ranges that can be traded if they appear on the larger timeframes. In general, the trading range will be defined on a larger-scale timeframe while traders will look for entry opportunities on lower timeframes.
However, in the real market things are not always so simple and the price doesn’t always bounce between two perfectly horizontal lines. That’s why different indicators were constructed to try and predict the most probable trading ranges in the market. One of the best indicators for this purpose are definitely Bollinger Bands.
While demo trading is definitely beneficial and a must do before trading live, there are certain aspects where backtesting superior over demo trading.
In this first article of the series on Pivot Points, we’ll discuss one of best ways to use them in your trading which is the 70-80% rule. In this introductory article here you can read about the basics of pivot points and how each of the Pivot Point levels is calculated, while in subsequent articles in this series, we’ll discuss some additional great ways in which Pivot Points can be used to gain an edge in the markets.
Combining Fundamentals with Technicals to Trade the Crosses
Some additional common trading errors or pitfalls that can arise from failing to follow a trading system are discussed further in the sections below.
However, it’s important to realize that it’s a normal part of trading the Forex market and it’s best to be viewed as part of the learning process. By understanding these situations, we can better protect ourselves from losses and make profits as well.
Concepts like the 5-wave impulsive structure and the 3-wave, overlapping - corrective structure, are as clear as day to Elliott Wave traders when they spot them on their charts.
On the contrary, an ordinary trader, unaware of the Elliott Waves may often get trapped in overlapping price action believing that it’s the main trend when in fact the price doesn’t go anywhere and will only reverse in the end.
Its core states that market trends develop, last and end in a very orderly and predictable manner, rather than being chaotic and random as it was believed by many at the time and is still believed by some today.
The Master Candle trading strategy is famous for the fact that it provides clear patterns and also helps in the identification of breakout points, making it especially useful for traders in the long run.
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