What are the best Forex trading techniques to use to enjoy Forex trading success? In this article we will look at some time tested techniques, you can easily apply for bigger Forex profits.
All the best Forex trading systems are simple and yours needs to be simple too, if you make your trading system to complex, it will simply break in the brutal world of trading now, lets look at some techniques you can put into your Forex trading strategy to make it successful.
The first Forex trading technique you need to become familiar with is basic technical analysis and learning how to read simple bar charts. You need to be able to spot areas of support or resistance that are important. The bar chart gives you a visual picture of the trend and once you have this, you can decide if levels of resistance are going to hold or break but how do you this?
If you want a simple Forex trading technique which works and will continue to work simply watch for significant levels of support or resistance to break and go with the break. You don’t have to guess or predict you simply trade the reality of the price break and go with it. This method is simple and effective and if you look at any currency chart, you will see all the big trends start there trends from these breakouts and also continue there trends from them so its timeless, easy way to make some great profits.
You need to look for levels that others traders consider important so look for levels that have been tested between four and six times and in breakout trading, its the more tests the better. Most traders don’t trade breakouts, as they want to buy high and sell low but this is simply not possible in Forex trading and involves prediction which is just hoping or guessing. If you trade breakouts, you let the market tell you where prices are going and trade the reality of price change; this method therefore, will get you in on all the best trends and profits.
You can put your stop close below the breakout point and then you need to learn another key Forex trading technique which is how to cope with volatility and stay with the trend, by learning how to trail your stop correctly.
Most traders try to restrict risk too much and end up creating it. If you look at the big trends they last a long time and you must have the confidence and the courage, to hold your stop outside of normal volatility.
A good way to do this is to trail your stop behind a key simple moving average and the 40 day MA is an excellent one to use. Sure, you give a bit back at the end of the trend but you have too as no one know when a big trend will end. Always keep in mind, if you caught just 60% of every major trend you would make a huge amount of money.
You must accept short term dips into your open profit, to stay with big trends and most Forex traders are not capable of using this Forex trading technique. They always want to have their stop to close and get stopped out with a minor profit, when they could have had a huge one.
Acceptance of short term open equity dips is essential to making money long term, so make sure you never place a stop to close and keep your eye on the big profits from the big trends.
If you learn breakout trading and how to trail your stops correctly, you will have two Forex trading techniques which you can put in your Forex trading strategy and enjoy some great Forex profits.
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