How To Trade Forex Trends? Part 2
Alternative to following trends is prediction. It is a bad thing which almost all forex traders do. They try to find the problems of trading and do a conclusion that to be the successful trader it is necessary to learn to predict the market. There is no end wishing to sell to you their latest discoveries on a market prediction. All of us desire to think that the prediction is possible – after all it so pleasantly, to make a prediction and to appear right.
And here again let’s put some small portion of sober realism:
It was required to me more than 9 years on understanding that though it very romantically and bears the big charge of self-satisfaction, however a prediction isn’t indispensable attribute of profit. Предвидиние trends is a heavy and risky task and leads to more frequent losses, than profits.”
To trade on a trend it is heavy, as the logical point of an exit is far enough and in case you aren’t right, can bring the big losses. It that fact that exists so a little on the present of successful traders well speaks. Not many can force to trade themselves in such psychologically heavy manner.
You can specify a trend only in a binding to concrete time frameworks. When you determine a trend, it can be, for example, an interval of two weeks, or six months or hour. Therefore an important part of the trading plan is decision making about what time frame to choose. Though, possibly, psychologically to choose this interval shorter easier, the best results are given by trade on longer intervals. The longer you conduct trades, the there can be a profit more.
For the maximum chances of success, your time line for trend measurement should be not less than 4 weeks. Therefore you should enter in a direction of movement of the prices which 4 weeks or more last. A good example of the strategy based on trends is purchasing when closing price above, than 25 auctions back and to sell, when it more low, than 25 days ago.
When you trade along such long trend, you really follow the market, instead of predict it. The majority of losing traders spend their entire career in search of the best method of a prediction of the market. If you can to develop in yourselves discipline and to start to measure trends in average – and a long-term time frame and always trade only in a trend direction, you will take an enormous step to a direction of profitable trade.
In case you decided to participate in forex trading should start from learning the basics of currency exchange market to make sure you do not have problems with this industry.