Chart pattern trading strategy is one of the easiest ways to make money online. Being a new trader in the Forex market, you might not understand the importance of the chart pattern trading technique. The majority of the new traders prefers to trade the market with indicator based trading system.
The rookie traders often overload their chart with tons of indicators which makes thing much worse. As a fulltime trader, you must understand the importance of proper risk management in the trading business. Things become really easy when you start to understand the key rules of investment. In today’s article, we are going to give you some amazing tips on trading the major chart pattern.
Trade-in favor of the market trend
Being a new trader you might not understand the importance of trend trading strategy. If you see the professional traders, you will be surprised to see, all of them are trading along with the market trend. Making consistent profit in the Forex market is a very challenging task. The moment you start to trade the market with the trend, it won’t take much time to become a successful trader. Once you spot a major chart pattern, wait for a clear breakout in favor of the market trend. So does this mean you will not trade any reversal chart pattern? The simple answer is yes. Being a novice trader, it’s better to stick to the market trend at the initial stage.
Trade with minor retracement
Those who trade the breakout of any major chart pattern knows the importance of minor retracement. In order to minimize the risk exposure, it’s better to wait for a minor pullback in the price to execute the trade. You might have extensive knowledge about the trading profession but this doesn’t mean you will be able to wait for a long period of time to trade the market with retracement. For this, you will need to develop strong patience.
Let’s give you a simple example. During the major breakout of the triangle pattern, the market tends to exhibit extreme movement. So, instead of executing the trade in the volatile market, it’s better to wait. Try to execute the trade when the market shows a great sign of stability.
If you ever get confused, open a demo trading account and try to learn the retracement trading strategy in a virtual trading environment. There is no reason to risk real money when you can learn something without losing any money. Demo trade the market for a few months, and you will understand the proper way to execute a trade with minor retracement. Once you feel confident start trading with the real money.
Analyze the fundamental news
In order to trade the major chart pattern its high imperative, you trade the market after analyzing the fundamental variables. Never think you can earn huge amount of money just by using the technical data. Technical analysis is nothing but part of your chart pattern trading strategy. The fundamental factors will help you to assess the strength of the newly formed market trend. In fact, most of the major breakouts in the chart patterns occur during the event of the high impact news release. So, it’s better to educate yourself properly so that you can easily understand the perfect way to trade the chart pattern.
Risk management policy
Money management plays a crucial role in your trading business. Some of you might think the experienced Singaporean traders always risk a huge amount of money to make a profit from this market. If you do proper analysis, you will be surprised to see their depth of knowledge in risk management policy. No matter how well you understand this market, you should never risk more than 2% of your account balance. Trade in a safe way to become a successful trader.
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