The novice traders always think that they know everything about this market. But if you do some research, you will be surprised to see that they don’t have the basic skills to trade the market. Without having a strong basic knowledge about the trading industry, no one can succeed in the retail trading industry. In order to make a consistent profit, you need to understand how this market works. Moreover, you have to get yourself familiarized with the basic terms.
To make the overall trading process easier, we are going to discuss some amazing steps which will allow you to trade the market in a disciplined way. Once you go through this article, you should be able to your trades with much more confidence. Without any delay, let’s learn about the basic factors of the market.
Phases of the trend
We all know trend trading is the best way to make money. But do you know that the trend has different phases? For instance, the price of a certain asset can go up or down. At times, it will be a ranging phase. This means the price of the asset will remain confined in a certain zone and you will have to trade with a narrow range. Once you learn about the different phases of the trend, you should be able to make wise decisions without having much complexity. To learn more about the trend phase, you may use a demo trading account and learn about the important market basics. Once you become good at it, you will be able to execute quality trades.
Japanese candlestick chart
Instead of using the line chart, you should be using the Japanese candlestick chart. Without using the Japanese candlestick chart, you can’t find reliable trade signals. In fact, by learning to analyze the candlestick patterns, you will know how forex trading works. Studying the candlestick patterns in the Forex market is also known as price action trading strategy. Once you become good at analyzing the candlestick pattern, you can even trade at the major support and resistance level with a high level of accuracy. Thus, you will never face any problem in finding reliable trade signals. But do not think you can master the candlestick pattern trading technique in less than a month. You need to use the demo account for a long time to master the proper functions of the candlestick.
Very few traders have strong knowledge about the leverage factors. Most novice traders keep on trading the market without even understanding what the leverage is. They start using the high leverage trading account with great expectations that it will help them to earn big profits. But this also increases the risk factors to a great extent. To lower down the risk factors at trading, you should trade the market with a low leverage trading account. Once you start using the lower leverage trading account, you will have less buying power and thus you will not trade with extreme risk. This will eventually protect your trading capital.
Indicators and EAs
Smart traders love to use indicators and EAs. Indicators should be considered as helping tools. By using the indicator, a trader finds reliable trade signals in the market and avoids many common problems. But if the traders rely too much on the indicator reading, they will mess things up. The only way by which they can use the indicator in an efficient way is by learning its function. Use one or two indicators to filter out the bad trades in the market. And make sure you know the proper way to bring change to the functions of indicators.
Some traders often use the EAs to find reliable trade signals. EAs are often known as the most advanced tools for retail traders. Unless you have extensive skills in doing market analysis, it is better to avoid EAs at trading.