This article descubrrás 10 basic tips or strategies you should follow to succeed by trading in the Forex market:
1. Charting trends and price ranges Markets
Use graphs with time frames to decide between long - term trends or fluctuating markets.Analysis begins with daily, weekly, monthly, and even graphics, considering past several years. Large - scale chart essentially shows the life of the market and provides a much clearer long - term perspective the market situation .
Once you have analyzed the market situation long term, you can analyze charts with short -term time frames. Remember that the factor of chance in Forex is much higher the smaller the time frame (time frame) of a graph . Successfully predict price action in short term time frames is much more complicated. It is generally better to operate in the same direction as the trends in the medium and long term, even if only short - term operating. If there is a strong and definite trend, it is better to move on to other types of strategy.
2. Follow the Trend
After determining the trend, you must open only positions in the direction of it. Market trends can be long, medium or short term .
First you must decide which strategy you want to follow: long-term or shorter time. This decision will determine the type of graphics you should use. But the strategy will always follow the trend.
Should be an uptrend, regressions expect the price to buy the pair, to ensure good entry price. In case of a downward trend, we wait for a recovery in the price before selling.
3. Locate Support and Resistance Levels
Find the support and resistance levels. It is best to buy near support levels and sell near resistance levels . The resistance level is usually a peak reached earlier by the price of the currency pair.
When resistance is finally broken to the upside, it automatically becomes a stand.Also when a carrier is broken down, this becomes a turn resistance .
4. Setback or Corrections
Generally the market correction, up or down, covers a significant portion of the previous trend. You can measure the corrections in an existing trend in simple percentages. A trail of fifty percent of a prior trend is most common. Fibonacci retracements of 38% and 62% are also two of the levels most closely watched by traders in Forex , including operating large scale investors such as banks or financial institutions.
5. The trendlines
One of the simplest and most effective graphical tools are trend lines. Draw a straight line connecting two points on the graph. If the trend is up, below the line joining two or more low points is drawn .
If the trend is down, a line is drawn over the graphic also joining two or more high points.Prices often respect these trendlines to approach them .
When a trend line is broken, often this is indicative of a general trend change.
6. Moving Averages
Moving averages often provide signals of buying and selling, why it is important to take them into account . With the help of moving averages, it is possible todetermine the state of a current trend.
One of the most common ways to use mobile Medeas is the use of two different socks on the same graph , and wait for the crossing of both. If we have an uptrend for example , and the prices were in a correction, at the time that a faster moving average (10 days for example) crosses above a slower moving average (20 days for example), this is probably a good buy signal.
7. Oscillators
Oscillators help us identify markets in a state of overbought or oversold . Whilemoving averages provide a confirmation of the market trend, oscillators can often tell the right time to open a trade.
Two of the most common oscillators are the Relative Strength Index (RSI) and theStochastic . These two oscillators operate on a scale of 0 to 100. When the RSI is above 70, there is an effect upon purchase, and when it is below 30, is indicative of overbooking.Values overbought / oversold for stochastic are 80 and 20 respectively.
One of the most useful signals that provide oscillators are the famous divergences . A divergence occurs when the direction of the oscillator signal differs price direction. Such situations are usually a strong indication of a change in market trend.
8. The MACD
Indicator of convergence / divergence of the moving average ( MACD ) combines a system moving averages crossing with mobile elements overbought / oversold oscillator.A buy signal occurs when the faster line crosses above the slower line, both being below zero .
Conversely, a sell signal occurs when the faster line crosses below the slower line, both being above zero.
The MACD histogram determines the difference between the two lines and gives an early warning of changes in the trend. This is called a histogram because it uses vertical bars to show the difference between the two lines.
9. Indicator
The Average Directional Index (ADX) helps determine whether a market is in a phase trend or is oscillating between ranges . This tool measures the strength of a trendor market direction, but does not indicate the direction thereof. For that you must use other indicators or tools. Usually a reading above 25 is an indication that the market is in a strong trend, rather than fluctuating between ranges.
10. Formarse
Training in technical analysis is essential that every beginner trader should do .Only you can improve and refine through practice and experience operating in the market.Continue reading, training and practice is very important to make finding the strategies that best work for each person.
Remember to follow strategies based on technical analysis also helps prevent purely based open our emotions and impulses operations. Discipline is essential to achieve this .
If you have not seen our course free forex we recommend that you take a look. I hope that helps. And do not hesitate to send us your comments or opinions and share these tips on social networks.