When you learn currency trading as a new trader, it is like building a new car from scratch without an instruction manual. You will acquire quality parts like brakes, wheels, motors, seats, steering wheels etc to build the car.
In order to become a successful trader you need right parts with right instructions to put them together. After all, a part such as a $2.00 gasket can make a big difference and bring your car to a screeching halt.
Understand that forex trading is very different from trading stocks. Companies can file for bankruptcies like Enron or GM or Goldman Sachs. Companies go completely out of business taking their share value to zero. However in case of currencies, there is no threat of a country going bankrupt. The only thing that can happen is a loan default by a poor country.
What can happen is that severe economic changes take place between countries. This can create dramatic changes between the currencies value of different countries. When that happens, it can create an incredible financial return for savvy, educated currency traders.
Learning how to spot a trend that can last from a few hours, several days or several months can create an enormous financial return for the skilled and educated trader. You need to learn how to find the current trend before you enter the markets.
Fighting a trend is like swimming against the current and getting drowned. You should always trade in the direction of the market. Traders make many mistakes. The biggest one is trading in the wrong direction.
Suppose you are an active trader. You dont have the trading software that has the moving trend line indicator. An incorrectly drawn trendline can be the difference between making and losing money in a trade. You will need to learn the skill of drawing correct Trendlines.
There are three types of trend lines. 1) An Inner Trendline. 2) An Outer Trendline and 3) A Long Term Trendline. These three trendlines form on all time frames and in both uptrends and downtrends.
In any uptrend draw a straight line connecting levels of support without penetrating bodies or wicks of a candle. Correctly drawn trendlines can project future levels of potential support in an uptrend and future levels of resistance in a downtrend.
Draw inner up trendlines by finding the last two support levels. Draw the line from left to right. Draw the outer up trendline by starting at the far left of the chart. Move to the right and connect the majority of the support levels with a straight line.
Go on a larger time frame like daily or weekly. Draw the longerterm trendline by connecting the support levels starting from the far left of the chart moving forward. Instead of a support level, use the resistance level to draw trendlines in a downtrend. That means all the rules are the same but in the opposite direction. The market reacts the same way in a downtrend as an uptrend but in an opposite direction. - 23309
In order to become a successful trader you need right parts with right instructions to put them together. After all, a part such as a $2.00 gasket can make a big difference and bring your car to a screeching halt.
Understand that forex trading is very different from trading stocks. Companies can file for bankruptcies like Enron or GM or Goldman Sachs. Companies go completely out of business taking their share value to zero. However in case of currencies, there is no threat of a country going bankrupt. The only thing that can happen is a loan default by a poor country.
What can happen is that severe economic changes take place between countries. This can create dramatic changes between the currencies value of different countries. When that happens, it can create an incredible financial return for savvy, educated currency traders.
Learning how to spot a trend that can last from a few hours, several days or several months can create an enormous financial return for the skilled and educated trader. You need to learn how to find the current trend before you enter the markets.
Fighting a trend is like swimming against the current and getting drowned. You should always trade in the direction of the market. Traders make many mistakes. The biggest one is trading in the wrong direction.
Suppose you are an active trader. You dont have the trading software that has the moving trend line indicator. An incorrectly drawn trendline can be the difference between making and losing money in a trade. You will need to learn the skill of drawing correct Trendlines.
There are three types of trend lines. 1) An Inner Trendline. 2) An Outer Trendline and 3) A Long Term Trendline. These three trendlines form on all time frames and in both uptrends and downtrends.
In any uptrend draw a straight line connecting levels of support without penetrating bodies or wicks of a candle. Correctly drawn trendlines can project future levels of potential support in an uptrend and future levels of resistance in a downtrend.
Draw inner up trendlines by finding the last two support levels. Draw the line from left to right. Draw the outer up trendline by starting at the far left of the chart. Move to the right and connect the majority of the support levels with a straight line.
Go on a larger time frame like daily or weekly. Draw the longerterm trendline by connecting the support levels starting from the far left of the chart moving forward. Instead of a support level, use the resistance level to draw trendlines in a downtrend. That means all the rules are the same but in the opposite direction. The market reacts the same way in a downtrend as an uptrend but in an opposite direction. - 23309
About the Author:
Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Discover A Revolutionary New Forex Robot. Develop your own Forex Trading System.
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