Forex Trading Techniques You can apply Now to be Profitable.

Forex Trading Techniques You can apply Now to be Profitable.

Trading Techniques are technicals analysis that help determine where is the market heading. It gives more clarity on what to trade, whether to buy or sell, entry point and exit point. There are four techniques that if kept simple and clear , you can apply them to become profitable. Understand that Foreign exchange Market is a long term game. If you believe you will get rich overnight with Forex, don’t read any further.

1– Fibonacci Retracement

Fibonacci is the name of an old Italian mathematician. He is considered to be one the most talented man in the history. The fibonacci retracement can track the harmony of things in nature like flowers, leaves, wood, even humans. Forex is a repetition. It is a powerful tools with ratios that help identify reversal patterns; shows you where are the potential entry and exit. The most popular retracements are 62% and 38%. Most traders use these levels as pullback level. if the Market was buying, once it reach one of the popular level, there is more than likely a reversal that become a seller market.

Understand that this will not always work as the market is sometime unpredictable. But it has a high probability of success. It is not advised to trade in time of news release as the market become volatile. Below is an example of fibonacci retracement. As you can see the trend is pulling back once it reach a key number.

Forex Techniques

 

2- Support and resistance

Support and resistance is another popular strategy used among traders. it’s a simple concept; when observing graph there is always a pattern. the pattern can go up or down. The simplest way to recognize support and resistance is to pay attention to the reversal. The lowest bounce will usually become a support and the highest bounce will become a resistance. It becomes easy to determine potential entry and exit. In the example below you can notice the support is the lowest bottom and the resistance is the highest top. Forex Techniques

 

3- Psychological Levels

Psychological levels in finance are zones where the numbers rounded-off, are easy to remember. A simple example is 1.1999~1.2000. This is the type of level forex traders look into the market. It affects the trend, as these area represent really strong bouncing probability. Again, it helps figure out entry and exist. Let’s look at the example below :

Forex Techniques

 

 

4- supply and demand 

Supply is the amount of asset that is available to purchase. Demand is the quantity of asset that people are willing to buy. When supply increase the price declines, and when demand increase the price rise. Currency traders looks for supply and demand for exit and entry point. The best way to identify supply and demand on graph, is to observe how price move. Usually when supply will come to an end, the market will stop selling, demand will take over and the market will start buying. Most of the time, supply and demand happen on psychological price level. So watch out for that. Below is an example of supply and demand. The Green represent the demand and the red represent the supply.

Forex Techniques

 

5- Pivot Point

Pivot Point is a powerful indicator that track potential turning point (support and resistance levels). It’s one of the most used strategy by traders after fibonacci retracement. Pivot point has a lot in common with fibonacci level. Here is an example of pivot point retracement :

Forex Techniques

 

Forex trading in general require a lot of patience and Learning. It takes years to master it. Stay away from get rich quick forex scheme that promise you fortune overnight. If it was easy everybody was going to do it. So take your time and learn with demo account, until you find the strategy that best work for you. You can find out more at https://www.babypips.com

 

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