Forex Trading Councils Part 3
Now we will consider general concepts of trading analysis.
1. At break of the prices there are such possible ways of action.
To open position in advance
To foresee break occurrence
To enter on the market at the moment of break occurrence.
These three approaches has pluses and minuses. Therefore if there is such possibility it is better to combine all three kinds of decisions. If the trader works with several prizes it is possible to open at each stage on one position.
Having opened a small position before break, it is possible to open additional already after it during correction of the prices which necessarily will occur after break. Before the beginning of the actions, the trader should solve in advance for himself such questions, as the size of means which it is ready to enclose and activity of the actions in the market.
Some traders can decide that occurrence on the market after there will be recoil of the prices and possibility can be the best variant will become on a long position. Such tactics as though it not was strange actually can be rather unjustified. All the matter is that at expectation of recoil of the prices it is possible to drop simply an input point on the market.
2. Entering at trend line crossing.
Using this signal of rather enough significant trend line, it is possible to enter on the market, and then to leave from it, early enough. In this case also it is not necessary to forget and about other methods and technical indicators. If to use a trend as a support/resistance line long positions should be opened during falling of the prices to level of an ascending trend line. Short, at elevating to level of the descending.
3. Support/resistance levels.
As signal for long position opening, break of level of resistance can serve. The given position should be protected with the help of stop loss order which it is necessary to arrange under the most nearest level of support. And it is even better, under level of break which the support role will play.
At elevating of the prices to resistance level in time a descending tendency, and their falling to support level, it is possible to open additional positions to already available profitable. For this purpose, what to choose safety level, it is required to pay attention to support/resistance levels.
If you want to participate in forex trading must start from learning the basics of currency exchange market to make sure you do not experience problems with this industry.