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.
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.
Having realistic expectations before you make a trade is essential to long-term success. That is why, as a newbie, you should stay away from anyone promising fast returns and quick wealth while trading forex.
A lot of people who get into FX trading do so because of the promise of striking gold early on. This notion is perpetuated all over the world on social media and a host of other internet platforms. If you lie in this group, you have just fallen prey to human greed.
Nonetheless, you are not doomed just yet. But you will have to alter your mindset and reconfigure your FX goals to get to profit.
Why Your Expectations Matter In FX Trading
Before you complete your first trade, you must have at least considered some information about the market and have a rough idea about how it operates. All of this goes on in your head and often affects your next play.
If you buy into the idea of quick money, then your mind detours from understanding the trade to thinking about the potential profits. You basically switch off from learning the way to really earn money.
As you sidestep these crucial lessons chasing that elusive fortune, you burn through your investment and leave the trade altogether. You could have avoided this unfortunate scenario with a little patience and most significant of all, an understanding of the FX world.
Get The Truth About Forex Trading Before Getting Started
For starters, forex trading is not a get-rich-quick scheme. Forget about expecting a freak result from your investment that will make you an overnight millionaire. That is not how it works.
However, this is not to mean that the FX trade lacks the potential to make you wealthy. On the flipside, FX trading, appropriately done just like any other business, will give you decent returns in the long run. So if you are still on the payroll somewhere else, hold on to that job for now.
Set Your Goals In FX Trading
Having an objective for anything we do tends to streamline our actions towards attaining it. The same applies to FX trading. Setting goals should be your next move once you get an idea of what the FX world entails.
As a trader, your primary goal is to make money as you navigate the currency market. Therefore, everything you do should lead to getting returns. It doesn’t have to be pot loads of money but any addition to your portfolio is welcome. Be wary of moves that would put your account at a greater risk of making losses.
Moreover, unless you have been in the market long enough, then profit-making can take a back seat meanwhile. Learn the ropes instead and build your knowledge on the intricacies of the forex market.
It is common knowledge that you have to spend money to make more money. This is no different in the forex market as you have to make an investment in which you expect to accrue some interest that is subject to your market analysis. Nevertheless, unless you control a hedge fund with access to a sizeable piece of wealth, then you don’t need to throw in thousands of dollars into your account.
Your account should only grow as does your level of forex expertise. This way, your investment acumen also grows. In due course, you will be in a better position to make more money and draw further satisfaction from forex trading with a bit of know-how.
Remember, you won’t get rich with a single day of trading. Successful trading companies and investors have been at the game since it began. Therefore, don’t dive in just yet.
Patience Is Key
Patience is not a virtue by mistake, and even successful traders understand its importance. Do not hurry your trade but rather take time to study and analyze your every move and double-check that everything is in line with your expectations.
There shall come a time when you make a losing trade, and your money is lost. Do not chase losses trying to recover your loss. Rather accept defeat and re-strategize. Both winning and losing are part of learning and we need to experience both to understand the value of one and learn to avoid the other. As long as you have money in your account, you will always live to fight another day.
Generally, once you realize the importance of knowing the trade, you will appreciate the gains you make on your initial investment, however minor. And it is these slight gains that impart vital lessons that will be the building blocks to your future successes.
Perfect Your Trading Strategy
The initial stages of every trader’s debut into the game should be about learning. That is why starting small on your investment is the way to go. Minor gains and losses serve to teach us what to expect from the market. From any loss, you will learn the market conditions that took a chunk of your investment and so will a profitable trade.
The FX market is immense and spans the global arena. No one person controls it but rather the forces of demand and supply. However, other factors come into play and affect the values of different currencies bringing about both profit and loss depending on the kind of trade made.
As a trader, accept this fact and teach yourself to identify these market influences. Doing so will enable you to develop realistic expectations once you put in your hard-earned money. With realistic expectations, it is then easier to fine-tune your trading strategy into a winning approach.
Our expectations stem from the information we take in. We develop such thoughts as a way of strategizing for the future. Exaggerated information only causes us to have unlikely expectations and once these do not come to pass, chances are you will stop trading altogether.
Therefore, get your facts right to strategize correctly and start reaping from the business.
How lovely would it be if a robot traded on your behalf, and you made good profits? In the contemporary world, human beings, including you and I, are looking for ways to make life simpler.
Finding a fully functional computerized trading system is no longer a dream. It guarantees a trader profits without the hassle of making the trades in person. However, before you use the automated trading option, you must learn quite a bit about it.
Today, automated trading forex is rather common. For most people, numerous questions remain unanswered. Is it a profitable venture? How does it work? How can I do it? What are its pros and cons? Is it safe? All these questions are valid, but it is time to stop scratching your head. I have complied a great article below that answers all your questions and teaches you a lot more about automated trading strategies.
This is a program that lets forex traders set their own rules for joining and exiting a trade. All these rules are programmed, meaning that the computer system gains the ability to execute trades electronically on your behalf.
An automated trading system is also known as algorithmic trading. This option works relatively well for novice traders whose knowledge in this field is limited. The rules for entry and exit can be simple, for instance, Moving Average (MA) crossover.
Some traders may set more detailed rules and strategies that require vast knowledge in the programming language used in a particular trading platform. Generally, automated trading is widely used because most traders are not very knowledgeable about the trading process. It is also simple to use because all you need is a computer and a stable internet connection.
Do scammers run automated trading systems? Most of us have been told time and again to think twice whenever the deal is too good. Running a program that does what you should ideally do as a trader sounds like a dream come true. The truth is that some federal governments have listed these programs as scams, but not all of them are.
Sometimes, the scam claims are just robot merchants claiming that the robots being sold by their competitors are scams to make more sales. If you really want to use automated systems, it is your responsibility to conduct thorough research before investing in one. There are some expert designers and developers who do their best to ensure that the user gets the best possible products and services.
Can I create an automated system?
If you have been asking about how to build automated trading system, you should know that it is a task that is both time and labor-intensive. How do you set up automated trading? Any trader can create their system, either using their skills or by outsourcing help from experts.
You can program the system using the strategies you developed earlier if you have the necessary skills. Alternatively, you can give your strategy to a professional programmer to do it for you, usually at a cost.
In the typical scenario, most of the self-coded systems generate signals that use both risk management and entry criteria. The systems are usually connected to a direct access broker.
This comes after the requirements for entering a trade have already been programmed in the platform. Platforms have software that allows the trader to generate ideas, test them for feasibility, and implement them directly via a broker.
In larger organizations with better financial muscles, a group that strictly does the programming automated trading systems is hired. These employees design all the components of a trading environment without getting any software from an outside source.
While this is expensive, their proprietary systems usually are more advanced. Most organizations use automated trading python, C, or C++ as their coding language.
On the other hand, you can use vendors who provide trading strategies at a fee. Usually, they sell you a graphical user interface that allows you to create your rules or strategy in simple steps, even if you barely have any programming language.
Most even offer trading wizards who guide the trader to develop a model that uses technical indicators to come up with a set of rules. They allow back-testing for you to test your strategy before you risk your hard-earned money.
How does automated trading work?
Both experienced and inexperienced traders can use automated trading systems. These work by having computer programs installed in your device to analyze market activity and the price charts in real-time.
The software then identifies critical signals, including any discrepancies in the spread, news that impact on transactions, price instability, and currency fluctuations. It conducts trades while making sure that there is minimal risk of making losses.
The systems also identify the more profitable currency pairs before placing any trade. Some of the systems have inbuilt wizards that guide traders entering a trade using technical indicators.
A user can also have the option of imputing the type of order and set when the transaction will be triggered. Many of them, however, prefer to program their own trading strategies and indicators. This requires one to hire a programmer, and it provides a higher degree of flexibility.
Classification of automated forex trading systems
There are only two categories of automated forex trading systems;
Expert Advisors (EAs)
Highly skilled and experienced professionals create EAs. They write algorithms to analyze market trends and to conduct trades. Usually, they are chosen depending on their knowledge and accomplishments to avoid causing panic to their clients.
How can you get a reliable EA? Most people are on the lookout for an EA that would do precisely what a human being would but in an automated manner.
The trader would then get more time to focus on developing a working strategy to amass more wealth and not have to implement it themselves. People who use an MT4 trading platform can use MQL programming language to create their personalized EA, which is reliable. Those who lack the skill can hire programmers to do it at an affordable cost.
Forex robots
These are software programs that are designed to analyze the market before conducting a trade. Unlike EAs that do not actively make trades and a person has to decide if they will open a transaction manually, robots do everything automatically. Automated trading thinkorswim is an example of forex robots.
How effective are forex robots? Most robots promise to make profitable trades, but to be honest, not all do what they promise. Sometimes, clients have excessively high expectations, so they end up feeling disappointed when these expectations are not met. The truth is that robots scan numerous charts within seconds, but 90% will give you incorrect information.
Even though they are designed to conduct sophisticated tasks, robots cannot think creatively. Their inability to imagine what will happen in the future inevitably affects their functionality. They are restricted to how they were programmed, so they may sometimes fail you.
To cope with this deficit, traders who use robots are encouraged not to entirely depend on them for all trading activities. They should do some human observation and research as well as make follow up to know the prevailing economic conditions.
Remember that to be a successful trader like me, you need to think critically, and show proficiency and skill in your decisions. You have to be wise as you use forex robots.
Can Forex robots and EAs lose your money?
At this juncture, you and I can agree that both EAs and robots are a good idea. Before you use any of the two, you must know that they trade within a specific range. They can only make a certain number of pips in a tight range, and they regularly have a few pip targets.
Like any other human trader, both EAs and robots face a risk of failure. In such circumstances, you will get a message that seeks your approval before any transaction is done. In an uneven forex market, some robots can lose money.
Is automated trading profitable?
Yes, I can assure you, from my experience, that you can accumulate wealth through automated forex trading, but only if you are patient, consistent, and flexible. There is, however, no guarantee that you will make profits. The EAs and robots are articulate and coherent, meaning that they ensure that you will get some benefits from the market movements.
The excellent aspect about them is that even people who lack training in this field can use them and earn some cash. Whether you are conducting automated trading India, Africa, Europe, America, or any other part of the world, you will certainly reap some benefits from using EAs and robots.
What is the best automated trading software?
Numerous firms claim that they have the best software, and most are offered without any charge. However, the market is diverse, and so are trading strategies and personal preferences. As a result, it is difficult to determine what the best software is. At the same time, you have to remain vigilant because some of them are run by scammers. Even so, we have a list of some of the most commonly used software that you should consider;
ProfitSource
MetaStock
E-Trade
Yewno|Edge
TradingView
Ally Invest
eSignal
INO MarketClub
Ninja Trader
TD Ameritrade
EquityFeed Workstation
VectorVest
Pros of automated trading systems
Forex trading is a premiere market, and the life of a trader can be made simpler using computerized systems that instantly execute transactions. Whether you are searching for information on automated trading Reddit or any other platform, you will realize that these systems offer the following benefits;
They are easily accessible
Both beginners and pros who find these systems helpful can easily access them. Numerous vendors are available, and the prices are different depending on the level of sophistication. Usually, these systems come with free demo models to familiarize yourself with them before using them on live trading accounts.
They eliminate all the emotions of trading
Human traders often have negative and destructive emotions that may affect their work adversely. Automated systems do not have any feelings, and they place a trade as soon as all the criteria are met. The system will open and close trades for you as you sit and relax. When emotions are removed, a trader can stick to their original plan or strategy since they do not have room to question things. The systems also prevent overtrading, which many people do.
They allow the user to conduct back-tests
Interactive brokers automated trading and all other available systems allow foe practice before a real trade is made. During back-tests, historical market data is used to test the viability of the idea. Remember that once you set the system in place for live-action, you should have absolute rules that have no space for interpretation as a computer does what needs to be done. Back-tests, help to ascertain that the rules the trader applies are feasible beforehand to avoid losing real-time trades.
The systems promote discipline
Computers join and exit trades automatically, so discipline is maintained even in highly volatile markets. Human beings often lose this kind of discipline because of fear of making losses, greed for making a lot more money, and other emotional factors. Unlike humans, the computer system ensures that the trading plan is followed without fail.
EAs assist the trader in becoming consistent
Most traders struggle with coming up with the next move after a trade. Sometimes, there is an almost guaranteed chance to make more profits, but they lose out because they ignore some rules which then alter the expectancy that an automated system would have had. Although there is no plan that always wins and losses are inevitable, failures impact on traders negatively. They may thus decide to skip the next trade to recover. However, EAs must continue trading whether a loss or profit has been made, and their consistency is commendable.
The systems improve order entry speed
Computers typically respond immediately to changing market conditions. They can generate orders as soon as all the criteria are met. Their ability to join and exit a live trade very fast greatly influences the outcome. The speed at which markets move may otherwise make a human being to lose their motivation very quickly. Save yourself from this challenge by using EAs and forex robots.
They help to diversify trading
These systems allow one user to trade using multiple accounts, or to use different strategies simultaneously. This brings the potential to spread the risk over different instruments and to mitigate losses. Besides, these systems can scan for trading opportunities across various markets, and they also monitor all trades.
Cons of automated trading systems
There is a flip side to using automated trading systems. The systems are designed to trade after being programmed by human beings. Many times, they fail to deliver the very high expectations that the trader anticipates, and the systems are also not infallible. Their limitations include the following;
They are 100% dependent on technology
In most cases, trade orders are inside the computer and not the server. This means that if you have an unstable internet connection or lose your connection, the order may not be sent to the market.
Besides, there is always the risk of having an incongruity between the hypothetical trades that are generated using the strategy and the order entry platforms that engage in real transactions.
Once you install a system, you must anticipate a learning curve to deal with these challenges. It is always wise to start with small-sized trades as you refine your system to prevent massive losses.
You need to monitor your system
It would be excellent if you could leave your computer on for a few days then come back to massive profits. Unfortunately, this is far from reality as the systems require you to remain close-by for monitoring all operations. This is because the system may experience mechanical failures, issues with connectivity, power losses, and even computer crashes. You should be on your toes to note such anomalies to prevent errant, missing, or duplicate orders.
You can over-optimize these systems
Over-optimization means excessive curve-fitting that would generate a trading plan that is unreliable when live trading. Unfortunately, traders can come up with back-testing techniques that look perfect on paper, but they perform poorly in live trades.
Automated trading systems can revolutionize your trading experience, but only if you choose reliable systems and monitor them closely. They offer several advantages that can make your life easier. However, they also have their limitations, so the best thing to do is to conduct back-tests and always monitor your systems closely to avoid losing trades.
AFFILIATE LINKS
Affiliate Links
I love that you are curious and that you are checking out this page right now. You know me, I love to help and teach aspiring traders something new! You will see throughout the website and in my blog posts links that go to outside sources (other websites and services).
These links may be what is referred to as an affiliate link which means I could earn money if you end up clicking on one and purchase/sign up for that service/product. If I am sending you to an outside source know that it is only because I have tested it myself and believe in it. I am all about sharing my recommendations and providing you with the best service/product and even excellent support.
The money earned through my affiliate links is just another way for me to earn a little extra income so that I can continue doing what I love which is helping aspiring traders with the right resources. If you choose to purchase something through me and use my affiliate links it is greatly appreciated and I thank you!
“I Wish You Well In Your Journey & In Your Trading.”-
Forex trading psychology is the art of managing emotions when trading in the forex market. The success of your profits in the currency market does not rely on the knowledge and experience but emotional discipline.
Forex trading and psychology should be used almost simultaneously to avoid some of the costly mistakes financial traders repeat in the forex market. These failures are a common trend among people from different social backgrounds and culture.
The fight or flee that emanates from fear is a major weakness that leads to failures even among the most respected forex investors for so many years. Changing emotions that cushion us against some pains is not possible, but prudent and successful forex traders can change their response when such feelings are likely to influence thinking and reaction after trading.
Fear limits human thinking especially when it comes to trading because the mind uses it to find a soft landing to make sure you live for another day. Therefore, as a professional forex trader, analyses the fear and ask yourself if pulling out due to fear will sort your issues. Failure to harness and be in charge of your psychological outbursts can cause a diversion from an early planned trading strategy. Fear can also take you out of the winning ways because of the failure to focus on the long-term and opt out when the whole strategy was to keep you on the game to make profits.
You need to understand how forex trading psychology plays within the forex trading market. Knowledge of fear will give you more powers and keep your emotions above worries. Overriding fear as trader gives the power of logic to you, which should be the ultimate goal trading business.
Types of Trading Biases
Before the floor opens all traders and brokers are calm and collected until the clock starts to wind down. Emotions will come in when faced with a financial decision that needs an answer within a short time.
A dedicated trader should always try to be on top of feelings related to fear or greed when the floor is open as this helps avoid costly mistakes. Do a personal analysis of self and decide which one of these forex trading biases you are subject to:
Overconfident: seems to know where the market trend is going
Anchoring: trying to pre-empt possibilities, which could be right or wrong
Confirmation: gives the impression of always getting it right
Loss: giving yourself some hope that the market will rise again to help you regain your loss
All the above biases have one thing in common – FEAR.
The number one way of getting used to manipulating your fears is to get the demo account, familiarize with the live markets, and gauge how you control your reactions to the environment and circumstances when faced with quick decision-making moments.
Here are some of the forex trading biases in details
1. Overconfidence Bias
Trading euphoria is common on trading floors because of the confused nature of humans crowded in one place looking for a solution. Our personal self-esteem elevates us to the point proving that we know what is happening around us and better than the next person is.
The only way to beat this is by owning up when you make mistakes and do not be afraid to be on the wrong. Once you have accepted that mistakes are inevitable when you are top of the learning curve.
2. Anchoring Bias
Traders want to believe that they are comfortable when performing market analysis by theorizing a future that will be the same as now. The tendency to anchor pushes the forex trader into making future decisions today. They do this without looking at the variation in market trends, and exchange rates leading to bad decisions using outdated data.
Once a trader feels comfortable, he will expose himself a little longer in a losing position without considering the changing factors. Always be ready to experiment on new things and strategies when one fails to avoid further loses.
3. Confirmation Bias
This bias affects the experienced and professional traders who will always be having a ready answer to support the decision they have made. Such traders will seek to justify anything as long as it carries their narrative. Confirmation bias leads to repeating the same trading mistakes.
You are likely to lose time and money by lingering for so long without challenging the brain to think of a better solution.
4. Loss Aversion Bias
When a trader takes an opportunity to evaluate their trading performance when making a decision between a lower leverage loss than a high leverage reward, fear takes charge and we lose big time.
Practically a trader will cut on profits when the earnings are still very low.
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Going past the trading bias and willing to move to the next higher level, go for a different experience by downloading and trying out a different platform in the name of MetaTrader 5 for desktop (MT5). Boost your abilities using the latest analysis given by trading central to access global widgets, and free real-time news and more.
Trading psychology and the profits generated
In case you have been asking ”How to change my trading psychology menace and improve my trading performance, write down all the trades you have taken and then check if were emotioanally-based trades.
Knowing how to develop a trading plan and sticking to it is one way of handling fear. Use your years of experience, knowledge, and ability to control your biases and you will be successful. Trial and error could end up to be the best teacher that helps to keep the FEAR at bay.
AFFILIATE LINKS
Affiliate Links
I love that you are curious and that you are checking out this page right now. You know me, I love to help and teach aspiring traders something new! You will see throughout the website and in my blog posts links that go to outside sources (other websites and services).
These links may be what is referred to as an affiliate link which means I could earn money if you end up clicking on one and purchase/sign up for that service/product. If I am sending you to an outside source know that it is only because I have tested it myself and believe in it. I am all about sharing my recommendations and providing you with the best service/product and even excellent support.
The money earned through my affiliate links is just another way for me to earn a little extra income so that I can continue doing what I love which is helping aspiring traders with the right resources. If you choose to purchase something through me and use my affiliate links it is greatly appreciated and I thank you!
“I Wish You Well In Your Journey & In Your Trading.”-
Arguably the most crucial element in the entire forex trading process is a forex broker. If you are just starting currency trading, then be sure that you will require the services of a forex broker. As a beginner, besides navigating through the complex world of forex trading, you should know how to tell apart forex brokers and only go for those who guarantee fair dealing and success while at it.
The global forex market is the largest of its kind as players trade trillions of dollars daily. To achieve this brokers are always making play aimed at turning a profit for their clients. The sheer scale of such a market points to a massive team of experts driving the FX market.
With so many forex brokers operating in the global arena, it can be challenging to select your preferred agent. For starters, their numbers make it a slow process since few brokers are keen on your interests. Unfortunately, a large number of them are only in it for their profit. You should be able to identify these types early enough to avoid losing your money.
Who Is A Forex Broker?
Selecting Your Forex Broker, An Ultimate Beginners Guide
A forex broker can be a person or institution that completes trades on a trader’s behalf. Brokers have access to trading platforms on which you can buy and sell currencies. These platforms allow you, as a trader, into the currency markets via a mobile app, web-page, or downloadable software.
Why Do You Need A Forex Broker?
A good FX broker has the potential to turn your investment into a tidy profit. Additionally, they are trustworthy entities that offer not just your portfolio’s security, but also a peace of mind when trading in currencies.
So how does a beginner get about finding a forex broker or brokerage firm? There are certain factors traders need to consider to get a good broker. Keep on reading to find out.
Brokers, like many businesses, offer a service in exchange for a share of the profits and in the case of FX, the spread. So essentially, you are paying these guys to make you more money.
The kind of customer support offered can, to some extent, determine whether you are making money or not. How responsive are they to your emails and calls? If they are not picking or are hard to reach, chances are they will ignore you during an emergency or even worse, when you lose your money.
Brokerage firms are supposed to encourage you to invest wisely. Be careful not to fall for salesy brokerage firms that are only out to pocket your money.
When opening a trading account, brokers tend to be supportive during the process. Don’t be blinded by this but instead test their after-sales services.
They Must Be Legal Entities That Comply With Regulatory Bodies
Trading in the forex market entails handing over your hard-earned money to a secondary party who then facilitates the actual transaction. Outside the FX arena, you wouldn’t consider handing out your cash to anyone and expecting it to accrue some interest.
The same applies to forex transactions. Before you give out your money, due diligence is essential. Any broker or brokerage firm must be a legitimate business.
Additionally, there are regulatory bodies all around the world that distinguish legitimate brokers from dishonest parties. So before you give away your money, take the time to find out if they are recognized by state regulatory agencies and permitted to do business in the region.
Trading Platforms
A large share of trading activity takes place on the broker’s platform. This is where the actual business goes down. The trading platform is essentially the interface on which you can interact with the actual FX market.
As a new trader, go through this space and check out its ease of use. Remember, you are just starting, and you would want a platform that is user-friendly, easy to navigate and remember and most importantly, has enough information which you would use to trade.
Selecting Your Forex Broker, An Ultimate Beginners Guide
A good trading platform, for instance, ought to avail real-time information. The Forex world is continuously shifting every minute and is characterised by its unpredictability. Having the right information and on time could mean the difference between a profit and a loss.
Leverage
Leverage entices retail traders into the FX scene. This is because, with limited capital, one can still control a sizeable position as opposed to their earlier figures. There is an increase in the reward to be gotten albeit at an equally higher risk.
Forex brokers offer leverage at varying ratios. Higher ratios point to similarly more significant trading risks. Most times, brokers avail capital that traders use to amplify their profit-making possibility. On the flip side, however, devastating losses may occur.
Traders need to understand the implications of using borrowed capital when trading. Additionally, brokers who offer higher than average leverages ought to be ignored.
Loss Protection
Forex trading is a risky affair, and the potential to lose your money is real. That is why traders in this market require a level of passion to continue trading even in the face of uncertainties. Nevertheless, you can offset your fears via loss protection availed by the broker.
A stop-loss order is a means of loss protection initiated by your forex broker. The broker will commence the sale of a security at a particular price, further acting as a sort of insurance policy against the trade making a loss.
As a beginner, it would make sense to go with a broker who mitigates against losses. Doing so ought to raise your trading confidence as your money is protected. Once you get the hang of the risks involved, you can take on even more significant challenges. Even though you will eventually lose money trading currencies, it is always preferable to have a soft landing.
If you are getting started with FX trading, brokers are essential players in the FX market. Because you won’t escape them, master these parameters so that you are aware of your requirements in a forex broker.
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I love that you are curious and that you are checking out this page right now. You know me, I love to help and teach aspiring traders something new! You will see throughout the website and in my blog posts links that go to outside sources (other websites and services).
These links may be what is referred to as an affiliate link which means I could earn money if you end up clicking on one and purchase/sign up for that service/product. If I am sending you to an outside source know that it is only because I have tested it myself and believe in it. I am all about sharing my recommendations and providing you with the best service/product and even excellent support.
The money earned through my affiliate links is just another way for me to earn a little extra income so that I can continue doing what I love which is helping aspiring traders with the right resources. If you choose to purchase something through me and use my affiliate links it is greatly appreciated and I thank you!
“I Wish You Well In Your Journey & In Your Trading.”-
By now, you know that day trading entails coming up with a strategy, implementing it, and, hopefully, making profits. However, this is not all it takes to become a successful trader. There are traits of highly successful day traders without which you will fail. Most beginners do not possess these traits, but they can develop them along the way.
Successful traders are developed through hard work, determination, and commitment. Most of them naturally have a few of the traits of highly successful day traders. They develop others as they master the art and science of day trading. It is, therefore, essential to evaluate oneself periodically to see the progress or lack of it, in your character development as a trader.
Discipline
Discipline is one of the top traits of successful traders. Financial markets offer each person infinite chances to make money. You can choose to trade millions of dollars or even 100$. While each of the opportunities can lead to profits, they can also cause you massive losses in equal measure. If you get distracted, you increase the chances of losing your money. This means that you have to remain disciplined as you trade. It is necessary to have a work schedule and to stick to it. During the hours when you are not actively trading, do not get derailed by things such as social media. Instead, you should be observing and studying the market so that you can take advantage of every arising opportunity.
Discipline means having a plan of action and sticking to it. Whenever you notice flaws in the plan, adjust it, and follow the revised one. Anyone who has a working plan can attest that it is not easy to follow without being disciplined. Over time, you will get used to following it, so start today.
Patience
After learning how to develop a day trading strategy, do not expect to mint millions of dollars from financial markets within three days. Patience is one of the best qualities of a successful trader that you should have. Like any other career, you must work hard and invest your time in trading before you can become a multi-millionaire or even billionaire. Achieving day trading success requires persistence, especially when you seem to be on a losing streak.
Patience means that you will spend time sitting, observing, and studying the market to identify the available opportunities to enter live trades. If you do not do this, you will lose all your capital. As you grow from a novice to a pro, you will realize that discipline and patience are highly interconnected. You will learn that you have to take baby steps before you can invest larger amounts of money. You will also learn that losing is not always a bad thing. From most tips from successful day traders that are available online, it is apparent that accumulating wealth by trading in financial markets is a long journey that should not be rushed.
Adaptability
What makes a good day trader? Flexibility or adaptability contributes to being a successful trader. The theory you learn from different sources on how to be a good trader is not set on stone. In fact, there may be some theoretical information that may not necessarily be useful when you start trading. In the same fashion, there is plenty of information and skills that you can only acquire by making an actual trade.
One fact about your day trader daily tasks that you must always remember is that no trade will ever be the same way another was. The market is always changing, so you cannot have textbook answers on how to start day trading and achieve success within a certain timeframe. After acquiring the basics, you will think that you have developed a perfect strategy only to realize that it is not feasible when you try to implement it.
Despite the continually changing market dynamics, one can be successful only if they are adaptable to the current conditions. This means that you should adjust your strategy as quickly as possible to recognize and take advantage of the available opportunities. Adaptability is not limited to the plan you have on paper, but also your mental state. Mental flexibility is crucial in real-time trading as it helps you to know when to enter a transaction and when to stay away. Without adaptability, you will fail to make profits in financial markets.
Mental toughness
Being thick-skinned is a must-have trait because financial markets will throw heavy jabs on your poor behind. Each jab should motivate you to bounce back like a boomerang instead of giving up. You are 100% guaranteed that you will lose a trade at one point or the other, so if you are mentally fragile, you will give up within no time. If your well-deliberated plan has some loopholes that cause you a loss, change it instead of holding a pity-party. As you learn to be a day trader, you also need to develop a positive attitude and a spirit that never gives up as this journey is not for the faint-hearted.
I will let you in on a little tip: Successful traders win a little more on their winners than they lose on their losers and vice versa. If you, my friend, are not cautious, you will wind up making wins that are equivalent to losses, so you have no profit at the end of the day. If you let each failure to affect your mental state negatively, you plant yourself for another loss in the next trade. Learn to brush off the dirt after falling so that you can move on and up. If you feel overwhelmed by a loss, remember to take some time out to rest and recover. It is always better not to trade when you are feeling emotional.
A person who has mental toughness is not afraid of their losing streaks. They remain rational and focused even through the thickest points. How can you shield yourself from the barrage of punches that the market will throw at you? It will take you time to develop a thick skin, but you can do it by taking breaks when needed and giving yourself a positive affirmation.
Independence
Who are the most successful day traders? Independent people are successful traders. Everyone needs help in their journey towards success. This help comes from tutors, blogs, magazines, friends, and even trading videos. These sources of information should give you the basic details as well as the tips and hacks to become successful. However, they will not be there for you at all times, and you will have to make decisions that will either build or break you.
How do you become a successful stock day trader? You become successful by not being too reliant on others. You have to be an independent person who identifies the right time to trade and uses logical reasoning before making any transaction. The strategy that worked for your friend a week ago may not work for you, so stop bugging them for hacks and tips. Instead, focus on doing what works best for you and ignore what others claim is a foolproof strategy.
Interestingly, gaining independence does not come automatically for most traders. It takes a hard-learned lesson for most to master how to think and act on their own. In fact, most traders will run from one mentor to another or from one book to another before they realize that the magic lies within them. One grows up when they decide to own their losses, profits, education, and action. Be responsible for the choices you make, as well as their implications.
At this point, I need to remind you that independence does not mean that you should carry the entire weight of the world on your shoulders. Whenever you feel stuck and lost, you should ask for help. Independence, in this case, means developing a personalized strategy or a personal toolbox instead of blindly following what others are doing or saying.
Forward-thinking trading
Are there any successful day traders? Yes, there are successful day traders from all parts of the world. What makes them better than the rest is their ability to think forward instead of being stuck in the past. Interestingly, a day trader must rely on information from the past to help make the correct decisions in their transactions. However, trading is like a game of chess. You have to deliberate about the next move and forget all the other erroneous moves you have made in the past.
Since forex markets are not static, you cannot say that you will buy $1000 in the next ten minutes and overlook all the other factors that come to play in the market. For you to be successful, you ought to analyze different scenarios and plan out how to apply your strategy. Talk to yourself positively and do not be swayed by what happened yesterday. Do what needs to be done in real-time after a careful analysis. If you are a forward thinker, you will know what to expect and what to do at the moment. Forward-thinking makes you act decisively and without unnecessary hesitation.
Aggressiveness
Being persistent and aggressive in life is not easy. The rule of the game is that if you feel that you are confident and you seem to be on a winning streak over an extended period, it is time to increase the value of your trades. The bigger your investment capital is, the higher the risk. At the same time, the more money you invest, the more emotional you are likely to be as it becomes a bigger challenge that is out of your comfort zone.
Being aggressive means that you have to be self-aware and able to control your emotions; otherwise, you will stagnate in your trading career. Do not allow yourself to be in your comfort zone. The more aggressive you are, the more likely you are to accumulate more wealth over time. Remember that being aggressive is closely intertwined with being consistent. Do not lose track of your progress versus your ultimate dream.
Decisiveness
In day trading, hesitation is your biggest enemy. You slack for a moment, and you lose it all. Uncertainty usually comes from lacking conviction in your plan, trading a huge amount of money outside your comfort zone, and lack of experience. You become more decisive, the more you trade. Similarly, if you spend more time analyzing the markets, you have more conviction when it comes to pulling the trigger.
Being indecisive will make you enter and leave trades in an erratic manner, and the result of this is being lost in different trades that may not be profitable. If you feel lost and confused, it is better to take some time off to recollect yourself.
Commitment
You will only become successful if you work hard and remain consistent in your work throughout different seasons. To achieve the level of success you desire, you must be passionate about financial markets and how they operate. If you lack the drive to keep up with the changing market conditions, you are likely to fail. A committed trader has specific working hours and time for resting. During their working hours, they do not get easily distracted by non-related issues. Sticking to the plan and revising the plan as often as needed is one of the ways in which you will become the multi-millionaire you dream of becoming.
Humility
Financial market trading offers you lessons on the importance of humility. One minute, you will make a profit and feel like you have conquered the world. The next minute, you will make a loss that could potentially break you. To avoid these drastic shifts in moods and feelings, remain humble through your highs and lows. Trading with humility almost always leads to a reward. If you are proud and arrogant, life will humble you soon. No trader is born with all the traits of highly successful day traders, so let no one fool you that trading is easy. These traits are developed by being intentional about your habits and daily practices. The good news is that you can create these traits starting today if you choose to. Remember that successful people are not quitters, so
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I love that you are curious and that you are checking out this page right now. You know me, I love to help and teach aspiring traders something new! You will see throughout the website and in my blog posts links that go to outside sources (other websites and services).
These links may be what is referred to as an affiliate link which means I could earn money if you end up clicking on one and purchase/sign up for that service/product. If I am sending you to an outside source know that it is only because I have tested it myself and believe in it. I am all about sharing my recommendations and providing you with the best service/product and even excellent support.
The money earned through my affiliate links is just another way for me to earn a little extra income so that I can continue doing what I love which is helping aspiring traders with the right resources. If you choose to purchase something through me and use my affiliate links it is greatly appreciated and I thank you!
“I Wish You Well In Your Journey & In Your Trading.”-
I love that you are curious and that you are checking out this page right now. You know me, I love to help and teach aspiring traders something new! You will see throughout the website and in my blog posts links that go to outside sources (other websites and services).
These links may be what is referred to as an affiliate link which means I could earn money if you end up clicking on one and purchase/sign up for that service/product. If I am sending you to an outside source know that it is only because I have tested it myself and believe in it. I am all about sharing my recommendations and providing you with the best service/product and even excellent support.
The money earned through my affiliate links is just another way for me to earn a little extra income so that I can continue doing what I love which is helping aspiring traders with the right resources. If you choose to purchase something through me and use my affiliate links it is greatly appreciated and I thank you!
“I Wish You Well In Your Journey & In Your Trading.”-
I know you might be wondering how to change Meta Trader 4 Passwords for user-friendly platforms like MT4 and MT5 (MT4/MT5) when the need arises. In case you are one of them, I am here to show you how to do it. Necessity for strong security is growing high for trading accounts and other financial market.
As a beginner trader who does not have a lot of expeince in this financial market , you need to be responsible for your personal data by ensuring that your credentials and banking data is transferred via safe and encrypted channels. In additional to this, you also need to ensure that your private data is stored correctly as per the agreement with a licensed trading company.
With many brokers out there, it is now easy for the traders to be in control and have authority over their account by changing this password when one feel like to. In this article, I have provided you all the steps on how to change password on metaTrader 4
When you want to change your password for the MetaTrader 4 platform, please go to the “Tools” main menu and select “Options” from there.
Step 2 – Select an account
Select the first tab in the “Options” window – “Server” and make sure the correct account and server (Demo or Live/Real) are selected before you make any changes. Click the “Change” button to start the procedure. Another window will pop up.
Step 3 – Change your Meta Master Password
In this window, you will notice that the login is the same as your account number with hotforex and it cannot be changed. To change your password, you need to know your current login password (Meta Master password). Make sure that “Change master password” is selected. Write in your new password in both fields – the password fields are encoded, so make the changes carefully.
Select “Change investor password” only in case you want to change your Investor password (it allows others to enter your account and see your trades without executing any themselves).
Confirm the changes with the “OK” button.
Click “OK” in the “Options” window as well.
Your password is now changed. Make sure you save it. Only you have access to it.
You can continue trading right away and safely with your new credentials with my best the recommended broker.
AFFILIATE LINKS
Affiliate Links
I love that you are curious and that you are checking out this page right now. You know me, I love to help and teach aspiring traders something new! You will see throughout the website and in my blog posts links that go to outside sources (other websites and services).
These links may be what is referred to as an affiliate link which means I could earn money if you end up clicking on one and purchase/sign up for that service/product. If I am sending you to an outside source know that it is only because I have tested it myself and believe in it. I am all about sharing my recommendations and providing you with the best service/product and even excellent support.
The money earned through my affiliate links is just another way for me to earn a little extra income so that I can continue doing what I love which is helping aspiring traders with the right resources. If you choose to purchase something through me and use my affiliate links it is greatly appreciated and I thank you!
“I Wish You Well In Your Journey & In Your Trading.”-
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.
“There’s A Difference Between Interest & Commitment. When You’re Interested In Doing Something, You Do It Only When It’s Convenient. When You’re Committed To Something, You Accept No Excuses, Only Results.” Kenneth Blancbard
