Forex Trading Strategies

Traditionally, trading involves the exchange of items between two parties. In most cases, this interaction often yields some kind of benefit for either party. All forms of trading follow the same give-and-take principle with the desire to earn a profit.

However, there is not a single market on which you can trade. This is because one can trade in several different financial instruments which are all processed differently. Therefore, the diverse options up for trade bring about differing trading markets.

What Is A Financial Instrument?

These are the commodities that you can buy and sell as you trade. The advent of the internet has made trading these items incredibly simple. Nowadays, you do not have to be physically present to buy gold, oil, or currencies. The global village phenomenon has made trading as easy as the click of a button.  

There are different options to trade in, and each one holds its advantages and shortcomings. As such, each one has a dedicated market on which you can participate in its exchange.

Types Of Trading Markets Available Today

1.      Forex Market

Ever since the introduction and widespread usage of currencies globally, there has developed a need to trade in this item.

For instance, if you want to do any business in a different country from yours, you need to comply with their financial laws, which include using their currency. To get it, you have to buy the same by exchanging your home country’s currency.

This sort of transaction takes place all over the world at a minute-by-minute interval. That said, the Forex Market is rightly so, the largest trading market with trillions of dollars’ worth of currency traded daily.

As the largest market, forex offers the best prospects of success when it comes to trading. This is ideal because of the vast information sources available on the market as well as trading resources tailored to trading in it.

Typically, traders buy and sell currencies in pairs, and along the way, specific pairs stood out as stable and hence offered a degree of predictability. These popular pairings are EURUSD, USDJPY and GBPUSD.

2.      Derivatives Market

Derivatives are a type of financial security whose value comes from a principal asset or assets. Derivatives’ reliance on an asset contributes to their price fluctuations. However, the cost of any derivative is tied to an agreement between two or more parties. Assets that linked to derivatives are often stocks, currencies, Contract for Difference (CFDs), and bonds.

Trading derivatives may occur over-the-counter or like other financial instruments on an exchange. At first, derivatives offered a standardized way to trade goods on the global market with balanced exchange rates. Today, derivatives are employed across a wide range of markets for speculative purposes and, by some, to evade risks.

Derivatives take several forms to fit into any investment need

Futures

Traded on an exchange, Futures oblige two parties to live up to an agreement to buy an asset at a price agreed upon and at an agreed-upon date.

Options

Unlike futures, options are not binding agreements. Instead, options provide a buyer with the opportunity to buy or sell an asset; it is not mandatory.

Swaps

Swaps allow you to switch from one cash flow option to another. Swaps will enable you to manage your interest rates by exchanging a variable rate of interest to a fixed interest rate.

Forwards

Like Futures contracts, forwards compel parties to hold their end of the trade agreement at a specific date. However, forwards are an over-the-counter transaction and as such, carry a higher risk of loss for either party. If one party is unable to hold its end of the deal, then the other one loses out on the trade.

3.      Commodities Market

Tangible commodities are often traded physically. The physical trade usually necessitates from the need to take delivery of your product. However, today’s commodities market has made it possible for prospective buyers to buy and sell hard goods remotely.

Commodities like oil, gold, grain, and other livestock items are available for trade via buying stocks, options or futures.

4.      Capital Markets

The Capital market is another well-known trading platform. The main items of trade here are stocks and bonds.

The stock market deals with companies whereby the shares of a company, private or publicly-held, are usually liable for trade.

Traders exchange company shares periodically as they aim for profit. Additionally, this market highlights the value of a company at a given time, hence the need to sell stocks when their value increases and vice versa when a company’s value drops.

In a nutshell, the stock market is another type of market where buyers and sellers of securities interact. As the number of market participants is large, the stock market can guarantee fair and transparent practices.

Just as in the FX market, the internet has a pronounced influence on the stock exchange. Earlier on, paper-based trade was the norm. However, traders can today carry out stock trading remotely from any corner of the globe without much hassle because of modern computer-dependent markets.

Additionally, government-issued securities are often used as debt instruments and traded in the capital market. The main aim of such a trade is to raise capital through the sale of bonds, the most common instrument issued out.

Which Market Should You Go For

It is without a doubt how great the diversity of financial instruments is. It comes as no surprise then, the ease with which traders opt to trade in only one market. As a beginner, this would needlessly make sense as you get to know your option of interest in the initial stages.

Seasoned traders are all too aware of the advantage of familiarity. It will be pointless to learn a new market instead of fine-tuning one in which you are well-versed.

There are some markets, however, that are better suited to newbies in the trading game than others. Tried and tested financial instruments are always the go-to for anyone getting into trading. That is why Forex rules the roost. Regardless, get a real feel for all the trading markets available before focusing on any single one.

Like any other income-generating activity on earth, forex trading is not easy. The market changes every passing minute due to external factors, the actions of other traders, and the news. Any successful trader knows the importance of keeping up with economic news and political events. Learning how to trade on forex without indicators, also known as price action trading, can make your life a little easier in this field.

What is forex price action trading?

Price action is the same as trading on forex without indicators. It is a theory of market behavior that uses the psychology of market markers, traders, and the market itself. It tries to explain why the market is volatile without using indicators, news, or other external factors. Instead, it uses the charts of the currency pairs and their patterns. Price action traders, therefore, analyze charts to understand the market and to predict the future. Some also use the Price action – moving average tool to determine trends.

What are the pros of forex price action?

• As a trader, you will not need derivative indicators, expert advisors, or any other tools that usually come at a cost.
• It is easy to understand the basics and to analyze the state of any currency pairs of your choice without too much strain.
• It saves you the hassle of trusting indicators and other unreliable sources of information that may mess you up.
• In most cases, you trade with delayed orders, so there is absolutely no risk of slippage.
• You gain skills and knowledge that are useful in other security markets and stock exchanges when you use price action.

Limitations of price action trading

• Before using it, you need a deep understanding of how the market works.
• You do not have precise guidelines and instructions on when to enter or exit a trade.
• You are tasked with the responsibility of predicting what will happen in other participants in a trade with the hope that most of them are at least profitable traders.
• You must always use strategic think and understand situations before making any move. Emotions may ruin you. Since there are no rules, you have to use the universal guidelines and decide how you will follow them.

Must-know information before trading with price action alone.

Before you learn how to master price action, you need background information, and you must also have a few basic skills. These include the following;

Knowing how to read candlesticks

Candlesticks are the most crucial elements in a financial chart. Each candlestick comprises a body and a shadow. Shadows, also called wicks, will show you the maximum and minimum price during the period a candlestick exists. On the other hand, the body will give you the opening and closing price during the same period. The candlestick’s color shows you the direction the price has shifted.

Candlesticks have three moods, the first being bullish, which means that the candlesticks close above the opening price. The neutral mood means that the candlestick closes at almost the same price, while the bearish mood means it closes below the opening price. In the traditional charts, the bullish candlesticks are white, and the bearish are black, but more modern software may use different colors.

Japanese candlesticks

These are somewhat new to the western markets, and they replaced the traditional charts in the 1990s. They report the dynamics of the trends during a given time frame in addition to the opening and closing prices that charts provide. Here is how they work;

• The body gives you the asset price at the beginning and end of a given timeframe.
• The shadow display the maximum and minimum price during the period in which the candlestick exists.
• Colors show the direction of the price movement within a given timeframe. Green candles move up while red ones move down.

Candlestick patterns

Candlestick patterns offer the precision for real-time trading that chart patterns do not. They are a great way of trading without charts. Here are the different candlestick patterns and what they imply;

Internal/ inside bar

In case you have been asking yourself ”how to master pin bar strategy I will show you how it works and when its useful. You need first to know what it is and how its formed. This a large candlestick without any shadows whatsoever and is usually followed by a smaller opposite candlestick. i.e. the high is lower than the previous bar’s high, and the low is higher than the previous bar’s low as shown below.

The bigger one should be at least twice the size of the smaller one. To enter a trade in an internal bar, you ought to create a Pending order using the direction of the larger candlestick.

Pin bar Pattern

This is a candlestick with no body or has a very small one and a long shadow/tail on one side, and it often precedes a shift of trend. There should be some movement before a pin bar, but if the market is mainly flat, you can ignore the pin bar. The best point to enter the market is in the direction of the new trend, right behind the shorter arrow.

I would like to add that, many people make mistakes when trading this pin-bars but I want to show you how to trade them correctly today.

A trader need to ask themselves why these pinbars are there. usually, it means that, whichever the direction they were moving they got bounced back but closed either below the open or below the close

I want you to start thinking of how these pin bars will look in a timeframe deeper than what you are using to trade them for a better understanding.

What I wanted to know is that, you need always to know how that candle looks like in a lower timeframe for you to decide the direction.

Outside bar

This forms when a larger opposite candlestick follows a smaller one. To enter the market, you ought to set up a pending order in the direction of the smaller one.

Fake breakout

This happens when a candlestick breaks the level with its own shadow, but it closes in another direction. Do not enter the market at this point!

Double High/ Double Low (DHDL)

This forms when two candlesticks are unable to break through an arbitrary level, and the pattern only becomes viable in longer timeframes.

What is a Pending order?

An order in forex trading determines how much currency you are willing to sell or buy, and it can either be market or delayed. Usually, market orders are executed at the prevailing market price, and if this price changes between creation and processing, the order is processed at a new price. A pending order, therefore, refers to an order that is executed at a price that was previously determined but is ignored until the market price is the same. pending orders usually require much planning, but they also come with reduced inherent risk.

An example of a delayed order is when the market seems bullish, so you create a pending order that is above the local extremum to buy. In case the price shoots up, you will still purchase it but not make any loss. You will also not lose anything if the price falls.

NB: The extremum means the minimum or maximum value of the graph.

There are different types of delayed orders, which are;

• BuyStop: This is a delayed purchase order for a price that is higher than the current one.
• BuyLimit: This is a delayed purchase order for a price that is lower than the current one.
• SellStop: This is a delayed sale order for a price that is lower than the current one.
• SellLimit: This is a delayed sale order for a price that is higher than the current one.
• StopLoss: This allows you to set the limit on the order loss. If the loss surpasses a certain limit, the order closes automatically.
• TakeProfit: This allows you to set the limit on the order profits. If the profit reaches a certain limit, the order closes automatically.

How to Know when the market is intrending, channelling or ranging state?

Trend refers to the direction of the market movement within a given timeframe. It can either be ascending or descending.

• Ascending trend: This refers to a series of increasing maximums and minimums. If the price is below the previously recorded minimum, it signals that there will be a change of trend soon.

This is when the market is making new HHs or new LLs

• Descending: This refers to a series of decreasing maximums and minimums. If the price is above the previously recorded minimum, it signals an upcoming change to ascending.

This is formed when the market starts making LLs and LHs

What you need to know is that, regardless of the timeframe you are trading, when the previous LH was broken, that Is when trending state ( upward started) And when the previous HL as indicated in the chart, that is when the downtrending state started. You need to study this very carefully as it will give you some insights on when to know which is the market conditions you have.

For traders using MetaTrader 4, it is possible to mark all the minimums and maximums with rectangles on each chart.

When is the best moment to enter a trend?

This is during a correction, meaning a movement against the trend. You can also enter during a consolidation, which refers to a flat movement of the price. Entering a peak will reduce your profits. If you do not identify a trend clearly, it is best not to do anything and wait to see how the situation unfolds. This will shield you from losing your deposit.

You can determine a trend in the market, either using trendlines or moving averages. A moving average is a useful indicator that shows you the long-term activity on the market, and it shows its direction. Alternatively, you can use trend lines through the minimum and maximum values in the chart. Trend lines are not reliable, but they can help you to predict the market patterns.

What are best indicators for day trading?

Before starting any trading day, you need to follow some intraday tips. To maximize your profits, you need to understand the market, and this is something that I cannot overemphasize. Some of the best trading indicators that you can use to maximize your profits include;

• Moving Averages
• Bollinger Bands
• Momentum Oscillators
• Relative Strength Index (RSI)
• Support and resistance level

Resistance and support trading levels

A level refers to the zone where a trend changes and the collective consciousness of forex traders determines it. A support level is typically created under the pressure of the buying traders, and it shows you the minimum possible price of a specific currency pair. It acts as a floor in the market. Usually, the buying traders start buying at this level, causing the price to go up and reach the resistance level when they start selling.

The resistance level is formed under the pressure of the selling traders. It acts as the ceiling in the market, and it shows the maximum possible price of a particular currency pair. At this level, the selling traders begin by opening short positions, causing the price to fall to the support level, where they close positions. In a descending market, you can make money using short positions.

A trader should understand that, a resistance or support should NOT be a marked by a line but rather, it should be a zone. I am going to show you how to use those support and resistance lines today to improve your trading. I have illustrated using a chart for you to understand.

Trend breakout

This refers to two consecutive candlesticks that close outside the trend. After a trend breakout, the resistance level becomes the support level.

Fibonacci levels

These are levels based on the Golden Ratio. They form at 38.2%, 50%, 61.8%, and 78% of the previous market impulse. An impulse means the initial movement of the market, so it is a trend that is created when either the selling traders or the buying traders gain dominance in a market. The strength of each level is dependent on how many traders believe in it.

Chart patterns

Whether you are seeking information on trading without indicators Reddit or any other platform, you will realize that there are many chart patterns in forex trading. However, I will focus on the most important ones, that is the triangle and the flag. A triangle forms when the support and resistance lines cross, and there are four types of triangles;

• Ascending triangle: This one forms when the support line rises towards a stable resistance line, and it indicates an impending breakout.
• Descending triangle: It forms when the resistance line descends towards a stable support line, and it indicates that a breakout through the support line is imminent.
• Symmetrical triangle: It forms when both the resistance and support lines meet at a middle point, and it indicates a consolidation pending a breakout.
• A ranging triangle: It forms when the support and resistance lines move further away from each other, and it shows an increase in the instability and volatility of the market.
• On the other hand, a flag forms when the support and resistance lines are parallel to each other, and it can be ascending, descending, or rectangular. A rectangle flag signifies instability in the market.
•  

How can I trade without indicators?

I cannot exhaust the information you should have before you master how to use the price action easy indicator in one article. However, you now have a few basics that will be helpful. You can proceed to the steps below to use the price action trading technique;

Step 1: Read the existing market conditions

Many traders cannot read the existing market conditions before making crucial decisions. Some do this out of ignorance, while others do it because of a lack of knowledge. Understanding the market conditions means analyzing a chart to determine the direction the wind is blowing. It is seemingly easy to do, but most traders forget its importance.

The market structure refers to technical analysis of the high and low points of price in a market that helps you to know the state of the market at a given time.

The results of the analysis offer you solid information about where the market is or is not moving to. You are then able to know if the market has a bullish, bearish, or an emerging trend. The market can also range between the two levels.

In trading without indicators PDF documents as well as other online sources, you will learn that the following terms are crucial;

Trending conditions

How can I trade intraday without indicators? You can do this by determining whether or not a market is trending. While there are numerous software to help you determine this, they are unnecessary. Typically, a trending market is one that makes higher highs and higher lows or one that is making lower highs and lower lows. Trending markets are idea for making money, but they can also burn you because they may be trading in the wrong direction. To prevent losses, you should wait for the prices to retrace into either swing lows or awing highs before joining the trend.

Ranging market structure

It is sometimes easy to determine ranging markets. Ranging conditions pose the challenge of being neutral such that anything goes, so they create an undesirable environment for trading. These markets are observed when the price is stuck between two major levels, that is, you will continuously see highs and lows appearing in the same horizontal levels.

Ranges are ordinarily turbulent and lack defined upper and lower limits, so you have to mark the swing points that occur in the same area. Due to the lack of defined boundaries for the top and bottom, it becomes hard to pinpoint reversal trades, so you must always be extra cautious when using ranging market structures.

Unreadable market structure

These are charts that are so crazy that it becomes hard to make sense out of them. This erratic behavior is often unexplained. If you cannot make sense of the situation, it is best not to join a trade.

Step 2: Establish the market rotations

After reading the chart, you should know the exact direction you want to be trading. Next, you should find the most likely place at which things will make a turn. When you establish this point, you need to use tools like horizontal levels, trend lines, Fibonacci levels, and pivot points to conduct technical analysis.

Markets will seldom move in a straight line, so the trend has to become your ally. Usually, the price moves in one direction almost half the time while it spends the other half rotating against the trend or in periods of consolidation. In a trending market, you will observe a move in the direction followed by short periods of counter rotations. The ultimate goal is to buy low and sell high, so being aware of these rotations will be very helpful.

Step 3: Determine the critical levels of support and resistance

These step helps you to determine the trading levels that will give you the most profits. Here, you need to use the “Keep It Simple” mantra. Focus on the key daily, weekly, and monthly lows and highs, which are easy to spot.

Step 4: Identify the low-risk trading opportunities with candlestick patterns

While it is difficult to weed out the most reliable candlestick patterns online, I can assure you that the engulfing and doji patterns are reliable. Other reliable ones are hammer or dragonfly dojis as they guide you on when to prey on pullbacks. When using candlestick patterns, remember to apply the following tips;

• Note the location as it is crucial. The setups are more likely to benefit you if they occur at key resistance or support zones.
• The market is always telling a story, and it is your duty as a trader to decipher it.
• Do not pay too much attention to individual candlesticks. Instead, focus on the clues that the price is leaving in the chart.
• The higher the timeframe you have, the stronger the signal is.

Learning how to trade on forex without indicators or price action trading is something that any trader can do. In this technique, you master how to analyze the market using candlestick patterns and price charts. Usually, this is not exclusive, but it can improve your trading system remarkably. Remember that price action trading is not foolproof, so you need to use other indicators for the best outcome.

       Difference between Scalping and Swing Trading

Difference between Scalping and Swing Trading

Scalping vs. Swing Trading: An Analysis Most people interested in the financial markets, some as creditors, others as traders. Investing is carried out with a view to the long term — years or even decades in mind. Trading, meanwhile, frequently shifts to pocket gains.

The time span during which a trader keeps a stock is a popular tool during separating one form of trader from another — a variation that may vary from a few seconds to months or even years.

The most common trading strategies include day trading, swing trading, scalping, and position trading. For long-term performance, it is important to select a design that fits your own trading personality. This paper describes the variations between a scalping approach and a swing trading approach.

NB:

1.  Scalping and swing trading are two of the more common short-term investment tactics that traders employ.
2. Scalping means doing hundreds of daily trades where positions are held quite quickly, often only seconds; as such, profits are low, but the risk is also minimized.
3. Swing trading uses statistical analysis and charts to map and benefit from market trends; the time period is moderate, typically a few days to a few weeks.

Scalping:

 Scalping policy exploits small shifts in the intra-day action of stock markets, frequently joining and leaving during the trading day to maximize income.

Often considered as a subtype of the day trading strategy, scalping requires several transactions, from a few seconds to minutes, with very brief holding times. Since markets are kept for very brief times, returns on each single deal (or earnings per transaction) are small; as a consequence, scalpers conduct multiple trades — into the hundreds during a typical market day — for profit-making. Exposure to the market for limited time decreases scalper risk.

Scalpers are quick and seldom follow any specific style. Scalpers go short in one trade, then long in another; their goals are small openings. Acting generally around the spread of the bid-ask — buying on the bid and selling on request — scalpers leverage the spread for profit. Those opportunities to leverage effectively are more common than big moves because only relatively small businesses see small movements.

Scalpers typically follow fast time maps, such as 1-minute maps, 5-minute charts, or transaction-based tick charts, to research market change and take calls on other transactions.

For its consistency with the trading frequency, scalpers seek sufficient liquidity. For such traders, access to reliable data (quote network, live feed), as well as the ability to conduct trades rapidly is a must. High commissions continue to minimize income from buying and selling regularly because they raise the costs of doing business, so direct broker exposure is usually preferred.

Scalping is ideally fit for those who are willing to dedicate time to the markets, stay concentrated, and move quickly. Impatient people are generally said to make good scalpers because they prefer to abandon a deal because soon as it is lucrative. Scalping is among those who can deal with pain, assess easily, and respond accordingly.

Swing Trading

The swing trading approach includes defining the trend and then playing inside it. Shift traders, for example, will typically pick a fairly trendy stock after a decline or contraction, and right before it’s about to climb again, they will leave after any income was pocketed. These forms of buying and selling are replicated to extract money.

Traders switch to the other side in situations where stocks collapse without funding, going low. Swing traders are typically “trend followers,” if there’s an uptrend, they go long, and if the overall trend is downward, they might go short. Swing trades remain available from a couple of days to a couple of weeks (near-term)—sometimes up to months (intermediate), but usually only a few days.

The swing trading falls between day trading and pattern trading in terms of timeline, flexibility needed and future returns. Swing traders use technical analysis and charts that indicate market movements to help them find the best entry and exit points for lucrative trades.

Such traders research resistance and help, sometimes mixed with other trends and strategic indicators using Fibonacci extensions. Any variance for swing trading is good, as it provides incentives.

Swing traders remain watchful for a chance for greater returns by indulging in fewer securities, helping to hold brokerage charges small.

The technique fits best for those who are unable to stay committed to the markets full-time, keeping track of events a minute by minute. This technique is mostly selected by part-time traders who take time to look at what happens during job periods. As is flexibility with overnight stocks, pre-market and post-market assessments are key to effective swing trading.this makes it not suitable for those who get nervous in these circumstances.

Below is tabular illustration of the major differences between the two styles of trade

	Scalp Trading	Swing Trading
Holding Period	A few seconds to minutes, never overnight	A few days to weeks, even months at times; most commonly held for few days
Number of Trades	Can be hundreds during a day	A few
Chart	Tick chart or 1-5 minute charts	Daily or weekly charts
Trader character	Vigilance, impatience work well here	Greater patience and precision required to understand trends
Decision-Making Time	swift	steady
Strategy	Extreme	medium
Stress Level	High	Manageable
Profit Target	Small, big	Few but wide
Tracking	Monitoring constantly during the Trading Period	Fair monitoring; Includes up-to-date news and business occurrence details
Suitability	Not for newbie traders	Ideal for all, from beginners to intermediate and experienced players
Waiting period	A few seconds to minutes, never overnight	A few days to weeks, even months at times; most commonly held for few days

Each and every type of exchange comes with its own range of threats and rewards. There is no single ‘right strategy’ for all traders, making it possible to select a trading strategy based on your expertise, personality, amount of time you can spend, size of your portfolio, trading experience and personal risk tolerance.

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“I Wish You Well In Your Journey & In Your Trading.”-

Basic trading concepts which are overlooked by almost all forex traders.

Many traders out there are looking for the best trading strategies. Some have gone to an extent of complicating it just by forgetting the basics.

Any trader both new and advanced should always keep trading simple as much as possible. For one to understand what forex trading is, you need to understand why the market moves. In simple terms, market moves due to human psychology. There is greed and fear in the forex markets and this causes the move we see in the market. In my course, I always advice my students to keep forex as simple as it was meant to be by understanding some aspects which I want to share with you.

Trending market condition.

Many traders out there have the general knowledge of what a trending market is, but many do not apply this simple concept.

We all know that, when the market is going up, or making higher highs or higher lows the market is in uptrend movement. When it’s making lower lows or lower Highs it’s in downtrend movement. Simple right? Those are some of the information as a trader you need to have before you click a buy or a sell.

That simple concept is well-known to all traders who have been in the market for a couple of years but they do not know how to use it. I am here to show you how to read the market correctly and avoid guess work this year. Happy? I just repeat this mantra if you are happy so far …. It’s not hard, it’s easy. Said it loudly now!

Okay well, let’s have an illustration of what I mean;  

I want us to study the above illustration of what Higher Highs (HH) and Higher Low (HL) for uptrend look like. For the downtrend, its Lower low (LL) or Lower High (LH)

As a trader you need to ask yourself why the uptrend/ downtrend movements happen. The simple answer to this is that the larger players ( banks, hedge funds etc. are desperate of  that commodity or currency and they fear that, if they do  not buy NOW, they will never get that cheap price hence the uptrend happens. He is interested buying higher and higher at an expensive price as the desperation escalate. The downtrend also happens with a notion that, the price is very expensive and we need to have a small discount for us to buy again. Just an example, there was once you bought an item at a cheap price and may be after 2 months it rose to the double the price. Have you? Okay. Let me explain. Since the memory for the initial price is still in your mind, when the market comes back to the price you bought, you will be interested again. The same case in currencies stocks or any commodity out there.

Since now you have understood this small logic of HH HLs and LL and LHs, let me now teach you how to use this basic concepts  to make money in forex trading. Before that, lets us discuss why the ranging market happens.

A range in a simple terms means that the larger players are building up orders to continue moving in the direction of the main trend.  Wait, what do you mean by main trend? What timeframe is the best for trading forex? These are some of the questions my students ask me all the times. I would like you to know that, any timeframe you open your chart you should be able to read what the market is trying to tell you. For one, if you are trading 4hrs chart your main direction of the market is daily and in case you are trading 1hr your main direction of the market should be 4hrs. That means;

In case you open daily chart and you see that, its making HH, or LLs you should jump down to 4hrs and then ensure that in case its downtrend ( the 4hrs are now showing lower lows as well  and the moment you see a range building up, it should be your time to hit it. Just assume that the above chart is in a downtrend (daily) and in the 4hrs, the market is making (higher highs and High lows (Discount period) if this is not there the trade will be a risky one. Then, you find out that the previous HL is being taken, that did not make a HH (as shown above) you now wait for a range to occur. A range is when the market is not making HHs or LLs.

Before I learnt how the trading works, I used to guess or even chase the market when I see a big move. I want to warn you, you should never chase that big move you see. Are you there? YOU SHOULD never chase that big move at any given time….. Fundamental traders are planning how to kill me! Yes, that is it. Many fundamental traders gamble their money for no reason. Wait for the move to happen and then trade the pullback. Simple as that.

Just wait the market to retrace (pullback mode) to be activated. In this case, you are now waiting the big player to lure more people in an opposite direction. The moment you now see the above pattern happening, you should be ready to do some actions and make money. The basic I am giving you here should double your trading account after 1 month or even make more. Hold on!

I am sorry that I am showing all the examples in sell trades, please note that, all these basic concepts of trading I am offering here works in all the direction of the market, timeframe etc.

Okay? Let’s now discuss the above chart.

The moment you see a single move as shown above, you should be ready to trade that market for a sell. Remember all the aspects we said for downtrend and uptrend. In case, that single push of the market caused a lower low in the higher timeframe above you, in your trading timeframe, you should now wait for pullback to be activated. NOTE! When the market hit that support and it started it moving up struggling and in many swings should be a confirmation to you that your sell must work now. What you need at this time is just to wait the pull back to be activated and start making HH and Higher lows as shown above.

The reason big player does not hit it when there were only 100 orders is that, those orders are not enough for them, and they will fake that pullback mode to be an uptrend as shown and many people will start following it like sheep. You can see, when the market reached at 900 orders, the larger players came in and drove the market back to 300, at 300, the larger player is not interested in that price and now, he awaits retail traders to activate buy trades as with general knowledge  of demand and supply it’s a good spot to hit buys. You should be always aware that, the larger player controls the market, for him to make money, all retail traders who have no clue of how the market works must be wrong.

I think if the information I have provided here is practiced with passion, your account will start growing. This is just a tip in the iceberg, in case you would like to get a full mentorship and become a better trader, feel free to send me an email at myforexglobal@gmail.com or admin@myforexglobal.com.

Last week alone, I received many emails asking me which broker I use, which criteria I use to choose a broker and what is the difference between ECN and market maker brokers. To answer that, I would like to give you my recommended broker which I have used for a couple of years now and all has been good for me. They have either MT4 or MT5 whichever suits you best.

Any aspiring forex trader should take time to familiarize with the aspects involved in forex trading.  Trading may appear easy; however, it is not. Although, people earn a living through forex trading, losing money is easy. Therefore, a newbie in forex trading is advised to use demo trading before he/she starts live trading.

Some traders argue that demo trading does not allow a person to trade with discipline as one uses demo money. They maintain that beginner traders may end up failing in the forex trading as they may not have the discipline required to succeed in the field. According to them, when one is trading with virtual money, they do not mind about the losses they make. Hence, there is room for mistakes such as taking positions with trade setup and taking positions with no trade setups.  People using demo trading may also end up over-trading which may become a habit.

Nevertheless, I do not agree with these sentiments as demo trading has major benefits to any novice trader. You are likely to adopt bad habits from demo trading in case you are not a serious forex trader who does not care if you lose.  However, if you are a serious trader you have a high chance of learning a lot from demo trading. Every novice trader should take demo trading serious for them to benefit in the field of forex trading.

Demo accounts enable a person to use virtual money to trade in an idealized trading environment. One has a chance to practice the concepts of trading without losing real money. A new trader can also test new and unproven trading approach.

Demo trading is a good way to save money, time and effort.

Saving Time and Efforts

In trading, your time invaluable and most traders cannot trade the entire day. Demo trading allows a trader to practice and prepare themselves for live trading.  Hence, a smart trader should take time to demo trade. Many brokers would advise you to open a live account as it is the way they make money. However, you may find yourself using a lot of effort due to a lack of familiarity with forex trading. You may end up getting stressed due to losses and even doubt your ability to trade.  A new trader may end up quitting forex trading due to such reasons.  

Save Money

Trading should be a long-term goal rather than a short-term objective. Hence, practicing using demo trading is a sure way for a first-time trader learn. Training for 3 or 4 months is a short time for any person focusing on forex trading as a long-term objective. There is a high chance that if you trade on your live account you will experience huge losses. You might end up losing hope and abandoning forex trading as a whole.

Demo trading is meant to help a person become a profitable trader before they trade in their live account. Some of the brokers offer Risk and Psychological Factors

Trading with stimulated money saves a person from any risks that are linked to trading using live accounts. For a new trader using a live account, they may experience heavy losses due to lack of experience and understanding. It may lead to mental issues, as one is likely to feel down and quit trading.  

Many traders tend to start live trading with little experience which is a huge mistake. Nevertheless, in case you feel that you are not ready to trade live, you can still go back to demo trading. Do not dive headfirst into forex trading as it may lead to major losses and later psychological issues. It is good to wait for at least one year before you start trading in your live account. It will take you 3-5 years to full understand what is forex trading and you can trade it full time.

Most traders tend to miscalculate the difference between trading with virtual money and using real money. Although one uses the same mechanics in both cases, trading with real money may lead to behavioral changes thus making different decisions. While using virtual money, one is not predisposed to any consequences due to the decisions they make. However, when trading with real money one is likely to go through different emotions, greed, and regrets due to missed opportunities.

Using a demo account over a period of time allows a person to master certain specifics of market entry and exit. One is also able to understand how market changes may occur.  Also, one gets to learn how to make target goals. In this case, one easily makes decisions on how much money you want to spend. A trader can gauge how much he/she is prepared to lose in case the market moves in an unfavorable direction.  One gets to understand the right time to exit a particular investment and use stop-loss and limit orders.  

A new forex trader should take things slowly as one gets to learn how the forex market is active and ever-changing. The approach will enhance a person’s market knowledge and minimize psychological issues.

Any trader using a demo account should consider diverse factors. First, you should choose a demo account that is closest to the account that you plan to use when trading. For instance, do not use a $100,000 demo account trading standard lots when you plan to use a EUR 250 micro account. One should keep in mind that utilizing a realistic account size as well as current will play a huge part with familiarizing with the market. One gets to learn about the sizes, profits as well as the losses on every trade. In case one trades with a high cash balance on your demo account, you may have an unrealistic sense of the margin error. A new trader should ask his/her, trader, to adjust their account balance to match their preference.

Trade Selection Techinque

                                         The Best Trades

Trade Strong Versus Neutral In 4hrs  

Trade WEAK Versus Neutral in Daily

Strong <<<+7,+6 +5

Weak <<<<<-7,-6-5

Neutral >>>>-4,-3-2-1   0,1,2,3,4join Our Community on our site and get these posts in your email:

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A major problem with most aspiring traders is that they lack an understanding of how to grow their trading account.  They have an end goal of owning either a large account or simply a small one. However, whatever their goal is, growing an account is possible and an efficient way of earning a living. There is no specific way of growing your trading account, nevertheless, there are different points that one can consider.

Let’s explore some of these points and learn how to boost your forex account in an efficient way and quicker.

Account Funding

Keep in mind that in forex trading you should consider the percentage of capital you are prepared to chance. The amount of capital you invest is relative to your profit. Hence, if you invest large capital you generate more capital. Let’s give an example of an account which is worth $1,000 and you have a return of 5% per trade. In this case, you will generate up to $50 every time you win and lose the same. With such percentage of what you are okay to risk, you do not have to overleverage your account. In fact, I would recommend a leverage not more than 100 if you want to be in the industry for a long time. Newbies think having 1000 leverage is your way to make money. Let me explain what leverage is in a simple terms. Leverage is the money your broker lends you. That is it allows you to either place a big trade or multiple of them that your original capital could not allow. Do not take leverage as a way of making millions. It works well to experienced traders because they can raise just a small account from like $100 to $1000 within a month.

In this case, you need to invest more money into your account for it to grow quickly and effectively.  Nevertheless, one may encounter issues. Therefore, if you are a beginner it is important to start small when trading lives.

When you start trading one should add capital to the account every month. As it is better to start small and reap great benefits later rather than to invest all your savings and suffer psychological issues in case anything goes wrong.

Overtrading

Overtrading can either be steering off from your trading plan or lack of a plan. At times trading can be compulsive as one seeks to make profits while ignoring the losses. One can also be overconfident thus opening more trades than they can handle thus causing more harm than good. In most cases, traders who end up not making money in trading are overtrading. As a trader, it is important to be conscious at all times and avoid taking every potential trade. Overtrading can have a grave impact on the growth of your account. One thing that every beginner should keep in mind is that even though our goal is to grow an account, we also need it to be efficient. Overtrading tends to affect the account’s efficiency if not taken care off.

Apart from over-confidence, overtrading is caused by one’s behavior. As a trader seeking to grow your account, it is important to understand psychology and ways to suppress some behaviors. For instance, one should avoid disposition effect, whereby, one holds on to losing positions for a long time while cashing winners at a fast rate.

A trader should avoid over-analyzing to be able to grow a trading account quickly and efficiently. Some traders tend to overanalyze positions and regularly monitor positions. It may lead to one making bad choices such as overtrading. 

Risk-to-Reward Ratio

Risk-to-Reward Ratio is the calculation of the amount that one is able to risk in a trade versus the profit target. Every trader needs to understand RR as it is significant in growing the trading account quickly and efficiently. Its approach involves looking for opportunities where the rewards are more compared to the risks. If you have more possible rewards you have a minimal chance of having more failed trades than your account can handle. A trader seeking to grow their accounts needs to use a good risk-reward-ratio by putting the odds in their favor. One should have a minimum RR of 1.5. In case you have a potential setup that gives you a 1.3RR, it cannot qualify for a trade entry. Therefore, it is important to make sure that you do not go below 1.5RR.  One reason that you should ensure your RR is 1.5 is that you just need a win rate of more than 40% to be profitable. However, with the 1RR minimum, you may need to have a win rate of more than 50% to be profitable. With a 1.5RR minimum, one requires to win 2 trades in every 3 losses to cover their loss. A trader will have less pressure to win all their trades. Thus, you will have the opportunity to trade at a higher level.

As a trader, you need to understand that it is important to protect your capital as it will allow you to grow your account fast and efficiently.

Trade Multiple Time Frames

Every trader has their trading approach that they feel comfortable with.  Despite this, flexibility plays a major role in trading. Nonetheless, a trader should focus on trading on multiple time frames especially when one is focusing on growing their account fast. The approach allows a trader to learn more about trade setups.  It will open up various opportunities that will allow you to separate great trades from good trades.  

With this approach, you will have an opportunity to grow your account quickly and efficiently.

Consistency

Being consistent with your account is a good approach to growing your trading forex account quickly. In most instances traders loose hope and rarely take time to check their charts. It is important to constantly check your charts and do not let losses deter you from trying. Every day small decisions allow a trader to develop a constant level of development and minimal chances of huge setbacks.  You do not need to spend the whole day in front of your computer trading, instead, you can take small steps such as checking your charts once per day. It will allow you to keep updated with major pairs. Also, it is important to have rules that will enable you to be consistent. You need to consider setting rules that match your personality. It will help in ensuring that you are not affected emotionally while trading. For instance, you will not have to spend more time thinking instead, you will spend time making the right decisions.  You will understand the mistakes that you have made in the past and focus on avoiding them.

Hence, consistency involves having a working plan, which will help in growing your account quickly and effectively.