Forex is a volatile market the entails risk as we as profits. For you to be able to minimize your risk and increase your profit you need a trend indicator on how to monitor the market trend.
Market trend is talking about the movement of the market in either up or down direction over a given period of time. Your ability to read the trend determined the level of your profit and loss.
Successful trading is not about knowing the almanac of trading. It is about following basic setups, taught in a clear and easy to understand way. Most people trade news which is based on economic calendar. But trend trading gives you edge to trade before the news comes out.
Importance of trend signal
1. Identifies and trades the trend
2. Simple and Clear trade setups
3. Removes the emotions from your trading decisions
4. Helps you identify and manage stops
5. Software formats automatically in all time frames
6. No need to add trend-lines or understand complex maths
7. Suitable for trading shares, indices, foreign exchange and commodities
8. Suitable for day traders and investors
9. Suitable for all levels of experience
10. Expert trader support
11. Choice of platform – now including MetaTrader4
Forex Trading Strategies
Generally, a Forex trader should be able to trade on all assets but it is
Recommended for novice traders to start with the major currencies, especially those that are against the US Dollar. This is due to the fact that these currencies have more trading volume and are more liquid and hence, have more chances for profitability.
The British pound, Euro, Japanese Yen and the Swiss Franc are good currencies to focus on as they are widely traded in the Forex Market. This will give the trader more room to maneuver in his trading strategy. The Australian Dollar, Canadian Dollar and New Zealand Dollar have less market volatility, but nonetheless, there are opportunities to isolate trends within these classes of currencies.
More advanced traders can take advantage of other groups of currencies pairs such as Crosses which are currencies pairs that do not include the USD. Likewise traders can trade commodities and indices which have the tremendous potential for profitability.
It is advisable to always consider a short term market position as
Although it is difficult to pinpoint where exactly these levels are, traders are still able to utilize these concepts because they can trade within these ranges. When the pair is trading within the support level regions, traders tend to adopt a “Long” market position and while at the resistance region, they tend to adopt a “Short” market position.
Drawbacks of Range Trading
One of the major drawbacks of Range Trading is that there is little chance for extraordinary profits within the ranges. The market
generally spikes or crashes suddenly when it breaks the threshold of these levels, and when that happens, traders adopting Range Trading strategies will find themselves incurring huge losses when the prices jump or drop suddenly.