Sunday, May 9, 2021

These 6 “Beliefs” Will Burn Your Forex Account Quickly

Belief is what influences the way we feel and think about everything in life. And in forex trading, belief is definitely one of the biggest influences on success. When we believe in something, it will determine how we act and react.

For example, if you believe that flying is “dangerous” and “scary”, you will feel anxious every time you have to fly, though aviation is the safest form of transportation in the world. It is safer than driving and even walking.

In today’s article, I will list 6 of the most dangerous and most common “beliefs” of Forex traders. They affect the amount of your forex account a lot. Perhaps you may have one or even all of the beliefs below. And if you want to go further with Forex trading, try to limit and eliminate them as soon as possible. Please do, although I know it will be hard.

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Foreign exchange trading is my last hope. I bet everything I have into it

If you are confident that “Trading is the only option for success and happiness in life,” you may not be able to earn real money from this risky market.

A person with the mindset of a “risk-taker” believes that trading is the last hope for him/her to achieve financial freedom and dream. He/she is the one who starts with a misleading view and perspective.

People say if you want to achieve something, really yearn for them and use all your resources on them. Yes, this view is true in many cases. But in my view, forex trading is not among this mass.

In fact, when trading, a person should feel completely comfortable and shouldn’t have any real pressure on HAVING TO make money (or even make money QUICKLY). In this way, he may be able to make a lot of money on the foreign exchange market. Do you feel “bitter”?

The most important thing you need to understand about this “belief” is that trading forex is not and will never be your last “hope”. And you should not and will never allow yourself to turn into a “risk-taker,” who can make a lot today but will lose everything in your forex account tomorrow.

With wrong beliefs, you can make a lot today but will lose everything in your forex account tomorrow
With wrong beliefs, you can make a lot today but will lose everything in your forex account tomorrow

Spend time on your main job. Or if you are a freelancer, think of some other investment areas (such as real estate, restaurant – coffee business, etc.). Always ensure the minimum financial level you need. The less you feel NECESSARY for making money on the forex market, the easier it will be for you to earn.

Try to believe me and experience it for yourself.

I MUST win all Forex orders in my account

One of the most common beliefs is that they always feel that every order needs to be a winning one. They do not want to accept a losing order. They try to make every order important and unbeatable.

Their self-esteem doesn’t allow them to lose. And they forget, they do not know nor understand that we always have a random ratio of winning and losing for each order. Every trade has an equal chance of winning and losing.

(Oh, do not understand the words above that trading is no different from gambling. Please read this article.)

You don't have to win all orders to earn money in your forex account
You don’t have to win all orders to earn money in your forex account

Separate yourself from the urge to make money on the market. At that time, you will “unlock” and develop your potential and capabilities in forex trading. Many traders have a losing rate a bit higher than the winning rate. But they still make a lot of money because the AMOUNT of money they make on the winning orders is MUCH bigger than the AMOUNT they lose in losing orders.

They will not exit an order when the risk/reward ratio is not above 1:1. Even if it hits the stop-loss, they still accept it. Because it is an essential part of the “game”.

They understand that with only 1 or 2 standard winning orders, they will recover all their losses and even collect enough profits to offer them a comfortable life for a few months. Do not let emotions overwhelm your trading. 1 + 1 will be equal to 2. If it is A, then it will become B. It’s just that simple.

Trading will “solve” all my financial problems

Many traders rush into the market with a few debts on their shoulders. Or they currently have a tough career which they want to get out of. Or maybe they want to live their life freely, etc. They think that trading will solve all these problems. You need to get rid of all these thoughts in your head if you want to move on in the market.

You need to really have a solid financial background before sticking your toes into this “meat grinder” (that’s what it is). The solid financial background here does not mean that you must be a millionaire or must own houses and cars to be able to trade forex.

I mean if you still have a debt to pay (never let yourself owe others, especially money. Repay as soon as possible) or you have a family with bills to take care of, don’t participate in forex trading. Ignore the perspectives that they (who are usually brokers or instructors who want you to make money for them) say. The rate of people (actually) succeeding with forex is very, very low. 

You need to have a solid financial background before joining the forex market
You need to have a solid financial background before joining the forex market

You can trade very well with the demo account but never put (almost) all your eggs in one Forex basket. Perhaps you are just having luck as people often say “gambling treats newbies” only. In forex trading (or stock, gambling), luck comes and goes very quickly. And to become a successful trader, you can’t rely on luck.

You should always feel comfortable (mentally, physically, financially, etc.) when trading forex. Absolutely do not borrow money to trade forex, stocks. Do not sink deeper into the mud.

I need to increase my Forex account balance quickly, as quickly as possible

No, you don’t need that. What you need is to trade properly and methodically. It may take about 5 years for your forex account balance to reach your desired number. But if you “dare” to try to accelerate the process, you only push yourself further and further away from the destination.

Most people come to forex trading because they want to make money fast. Therefore they trade a lot, open orders with a large volume (compared to their balance). And then what, they burn out their accounts very quickly, sometimes with just one order without a stop-loss.

It may take about 5 years for your forex account balance to reach your desired number
It may take about 5 years for your forex account balance to reach your desired number

There is advice for you as follows: “Don’t increase the volume of your orders until you have doubled or even tripled your balance. Most people make the mistake of increasing the order volume too early when they get some positive initial results. It is the highway that takes you back to the old pig trough.”

I will trade with discipline and patience AFTER I increase the amount in my Forex account

I know a lot of new people and people who are “stuck” in making money in the market thinking that they will keep that hard part (discipline and patience) for later. That is after they earn a certain amount of money.

In fact, it is their greed and hope, the two most dangerous emotions in trading. This way of thinking leads to only one path that is losing and quickly losing money.

Usually, they will never trade with discipline and patience. Just like you say this week you’re going to eat healthily, stop smoking, and go to the gym every day.

Greed and hope will lead to only one path that is losing and quickly losing money
Greed and hope will lead to only one path that is losing and quickly losing money

Do it RIGHT NOW if you know and understand that they are necessary and required. There is never a shortcut in trading or like most other things in life. The more proactively you start working on the most difficult parts, the faster you will solve the problem.

Get rid of the short-term “temptations” in trading. Focus on long-term stuff and be patient with it.

The more orders I open on the market, the more chances of making money I have

I, like so many others, had such belief in the early days of babbling in the forex market. Excessive trading is probably the most common mistake made by individual traders. They don’t even know it is a problem.

I always advise you to be patient and disciplined to wait for REALLY GOOD AND CLEAR opportunities. Thinking about the dealer in gambling, I know that most of them play and only play when they ensure the win in their hand (with tricks, cheats, tricking tools, etc.). Let’s “play” like the dealer. “I will only open orders with high certainty, or else I will just watch. Sometimes, I don’t place any orders for a whole month. Don’t ever think about taking my money away.”

The market always offers everyone equal opportunities. Your job is to look for REALLY worthwhile opportunities to risk your hard-earned money or to stay on the sidelines with unclear opportunities. You need to get rid of the idea that more opportunities mean more money.

You need to get rid of the idea that more opportunities mean more money
You need to get rid of the idea that more opportunities mean more money

Conclusion

How many above “beliefs” do you have? Please share your trades. We are living on the internet. No one will know who you are.

So feel free to share together to improve. We always learn a lot from the mistakes and experiences of others.

Best regards.

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Saturday, May 1, 2021

4 Key Factors To Success In Forex Trading

In my opinion, most people make trading more complicated than necessary. It is not easy to make money (in the long term) with forex trading. But it’s easier if we sit back and pick out the most important points to focus on. That’s what I call key factors to success in forex trading.

In this article, I will only list out 4 factors. And I want you to really focus on these ones. If you are spending time and energy focusing on other things in trading beyond these 4 factors, you are making your trading more complicated. You do not necessarily have to waste your time like that.

For those who are new to Forex or who are struggling and losing money in this market, this article will be of great help. This is what I always hope for.

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The entry strategy factor in Forex

The first thing when talking about this is that you only need one strategy for yourself, the simpler the better.

Many traders do not know what their strategies are. They go around searching and trying one strategy after another. Or even worse, they also mix these strategies together, getting the wrong sow by the ear. This definitely makes you confused. And most likely it is the first reason you lose money in the forex market.

So, the first thing you need to focus on is having an appropriate trading strategy/tactic/method. I recommend pursuing price action. It’s simple and very effective. And no matter which strategy you use, master it. Be very aware of it, until you don’t need to ask questions when deciding whether to enter or exit a trade.

The entry strategy factor in Forex
The entry strategy factor in Forex

There is an old saying of the West: “Success comes when careful preparation meets opportunities.” If you do not have good tactical preparation, when good opportunities appear in the market, you will not be able to seize them.

The hard part here is that you only throw money into the market if and only if your system confirms it in the market. And we now move on to the next extremely important factor.

Manage your MONEY

This includes risk management, how much money you manage, and what to do with profit if any. The first step is to pre-set the risk amount for a trading order.

You need to be very comfortable with this risk amount. If losing it does not change your emotions much, it is a reasonable amount. You also need to ensure this risk amount is optimized enough for a few losing orders before your balance runs out. Because your strategy needs a series of orders to see if it works.

I have an example if you need advice, as follows: The risk amount for each order should be guaranteed so that your account balance can withstand at least 40 consecutive losing orders. If you have $3000 in your account, you can put a risk level for each order of $50. In case you lose consecutively 20 orders, you still have $2000 in your account.

In case if you lose (almost) 20 consecutive orders while still following the same method/strategy, then most likely it is not effective. Or maybe it’s because you’re not as disciplined as you think.

Manage your MONEY carefully
Manage your MONEY carefully

The important thing here is that you are not emotionally interrupted when setting a reasonable risk. You can completely turn off the computer, sleep a good night after placing an order. If you lose, it will only take a small reasonable amount compared to your balance.

The key to helping you manage risk to avoid the effect of emotions includes:

  • Don’t start with an amount that exceeds your comfortable tolerance if you lose. This amount will have to be at the level where you can comfortably do other things in the next 12-24 hours before you need to check your orders again. You need to be completely at ease when your order hits the stop-loss.
  • Don’t start with money you can’t afford to lose. If you don’t have much money or if you are still struggling to make a living, do not trade on a live (real) account. Please seriously practice with a demo account right down here.

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Discipline factor

I often think of the metaphorical image of discipline as a glue that gathers the aspects of your method. You need to learn how to control the discipline to always stick to trading strategies, money (risk) management methods, exit strategies (closing orders), etc.

In trading, patience and discipline are almost identical things, or also can be seen as one. You need to be (extremely) patient to wait for the best opportunity to appear. And you need to be disciplined to stay patient. You cannot achieve patience without discipline. You need both, so focus on discipline.

Don’t make this complicated. You just need to really understand your trading method and have a good discipline to wait until the market offers you a good opportunity to practice your method. Do you understand what I mean here?

Discipline factor in Forex
Discipline factor in Forex

Discipline is also that you (minimize) do not interfere with opened orders in the market. Interfering with opened orders proves that you are negating your own strategy and method. You do not trust them.

The irony here is that it’s hard for most people to enter an order and then turn off computers to do other work. In contrast, people often sit back and nervously observe the fluctuations in their accounts. And most likely, they will stop loss or take profit much earlier than planned. And that is the way to lose money, even in the short or long term.

Maintaining discipline is difficult. We have no boss or foreman to whip our butts. There are only us who fight ourselves. Usually, it is too easy for us to pamper ourselves.

However, if you want to become a successful trader, who is among the meager percentage of making money from the forex market, you need to do things that most people can not do. Always remind and train yourself to keep discipline.

The exit strategy factor in Forex

At the beginning of the article, I told you that you need an entry strategy, and you also need an exit strategy. Often people have an entry strategy but no exit one or pay very little attention to this.

However, determining the exit point in advance may be more important than determining the entry point. Without determining a good exit point, traders often take profit too early and regret losing a big profit.

How well you determine your entry point depends on the state of the market you are in. For a trendy market, you should be brave to risk. Your risk/reward ratio should be 1:3 or 1:4 rather than 1:1 or 1:2. With the market struggling within a narrow range, you should be happy with the 1:1, 1:1.5, or 1:2 ratio.

The exit strategy factor in Forex
The exit strategy factor in Forex

What you need to note here is: always determine an exit point before you place an order (and of course, never start without a stop-loss).

The 04 bullets above are what I want you to really put your energy and time into.

Always practice and improve every day.

The path to becoming a trader is still very, very long ahead.

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Monday, April 26, 2021

Can We Make Money From Forex Trading If Consider It As A Side Job?

You are a busy person, aren’t you? You have a lot of stuff to deal with in your life, don’t you? But you are very interested in the opportunities that the forex market offers. And you wonder why not take advantage of Forex trading while doing your daily job.

You have read a lot of documents about trading. And it seems to be a “profession” that takes a lot of time. So the question here is: can you consider trading as an “overtime” job? And does this have a negative effect on your trading results?

My answer is: you absolutely can make money from trading Forex. In fact, this is even beneficial for your trading results.

In today’s article, I’ll discuss with you how to streamline your Forex trading with your other daily job as well as take advantage of it to turn you into a better trader.

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How to trade Forex smoothly when your job has a lot of work to solve daily

Regardless of what you think or read about Forex, it is not necessary for you to sit in front of the electronic board for hours every day. The way I trade only requires 30 minutes to 1 hour in total for a day no more.

You may wonder: “How is it possible?” The answer is simple. Focus on the daily candle. Even if you have a full-time job or you have to go to school all day, etc., daily candlesticks are the perfect solution here. By focusing on daily candlesticks, you only have to look at the electrical board a few times a day.

How to trade Forex smoothly when your job has a lot of work to solve daily
How to trade Forex smoothly when your job has a lot of work to solve daily

Daily candlesticks are the most important candles of the day, of course. Because it shows how prices move in a whole trading day with only 1 candle. If a good signal appears, you will see it on the daily candle (D1) right after the New York trading session closes. This makes your Forex trading job very simple, fast, and easy.

If you find that the candle matches the criteria set out in your trading strategy, place an order, and turn off the electronic board until the next day. Let the market do its part, do not interfere or expect anything. If no candlestick is feasible, your job is to turn off the electronic board and turn it on the next day.

This is basically a way of using daily candles to maintain your trading (effectively) while ensuring all other daily tasks. And in my opinion, the daily candlestick is the “most reputable” candle, which you should focus on the most, out of all other candles on the chart.

Why do you need to stay clear of the electronic board?

Focusing on daily candles and datum when the New York session closes is a way to help you secure other jobs. Besides, it is also a great way for the vast majority of people to trade and increase the chances of success in this forex trading job.

The point to note here is we humans tend to want to trade a lot and easily fall into the “addicted” state of transactions. When you have other work to do all day or are busy with studying at school, you seem to have a natural dose of antibiotics to help avoid this situation.

Why do you need to stay away from the electronic board?
Why do you need to stay away from the electronic board?

So don’t feel like you (will) miss out on many opportunities in the market because you’re busy doing other stuff all day. That feeling is greed and fear. You should feel glad that you will not be stressed when you get caught up in the market and lose money for it.

As I have shared many times, daily candlesticks are the “most reputable” candles. They are likely to bring the highest profit compared to the other candles after it. Weekly candles and monthly candles give us too few opportunities when a month only has 4 weeks. And I’d rather lose money with quality opportunities.

The less you are affected by the market, the more you can avoid shooting yourself in the foot.

Being “distracted” can help your Forex trading job have better results

You don’t have to be lurking in the market all the time, and you shouldn’t be.

Nobody can trade successfully if they sit all day in front of the chart screen. It will make you trade too much. And you will easily fall into the situation of losing money continuously. So if you don’t have a job or any other hobby that helps you stay clear of the market, then you should consider getting one. Because if not, and you continue to sit and watch the market for hours, you can easily become a trading addict.

You should think that your current (or upcoming) job is a good way to “force” you to get off the electrical panel. Most of the up and down price movements in the market are meaningless. It is a waste of time spent on them.

Being "distracted" can help your Forex trading job have better results
Being “distracted” can help your Forex trading job have better results

A career, a job, or a school is like a shield that helps you avoid a lot of meaningless movements of prices in the market. You absolutely can (and should) make your trading suitable and not interfere with your other daily tasks. It even helps you trade better.

All you need to do is understand and accept the importance and significance of the daily candle (D1). Just focus time and energy on it.

Summary

It’s great that trading forex turns out to have no effect on your daily routine. Conversely, when you do such transactions, you increase your chances of success and earn (a lot) money with forex trading.

Try it out if you are not trading like that. I believe that the result you get will not only increase the amount of money in your account but also that you will not have much stress and have a lot of time and energy to perform other tasks.

I hope you have a good trading day.

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Thursday, April 22, 2021

To Become A Forex Trader You Need The Power Of Perseverance

Fighter pilots are an occupation that requires exceptionally high skills that ordinary people like us find very complex. However, for those who do that job, it’s all just the work habits they have repeated hundreds or even thousands of times. Surgeons, magicians, etc., or highly skilled careers are the same. Let’s relate this to our job as a Forex trader.

Surely, outsiders also think that this is a very complex job with all kinds of theory and confusion, with lots of information back and forth, etc. They do not understand how we can make money from that “super messy mess”.

What do the people in the examples mentioned above have in common? That is perseverance.

You’ve probably read a lot about (good) habits that are the “key” to help you succeed with forex trading and virtually every field of your life. But perhaps not many people know how to establish these good habits and maintain them. In today’s article, I would like to discuss this issue.

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Growing your account is like building muscle

Persistently going to the gym, even if that day you don’t want it at all, will give you the result. You will get stronger (both body and soul) and your body will be more good-looking. Persevering healthy eating, staying away from alcohol, tobacco, etc. will also give you the result. You will be healthier.

For those of over-sized bodies with too much fat, it is very difficult for them to practice healthier eating, or go to the gym hard. Because they HAVE HAD a lot of bad habits like being lazy, eating unhealthy foods, and creating “junk” in the body. 

For people who are healthy and lead a healthy lifestyle, they feel comfortable and at ease doing the right exercise, jogging, and eating. Because they have persisted for a long time with these habits, making them an integral part of everyday life and becoming part of who they are.

Growing your account is like building muscle
Growing your account is like building muscle

Similarly, if you persevere to get up early to go to school or work, you know that it will soon become a habit. On the contrary, if you get used to staying up late at night, it can also turn into a habit. And changing is difficult and time-consuming. Sleeping and getting up early helps you become a healthier and more active person. So obviously we should take advantage of perseverance and repetition to form good habits.

Persevering learning and cultivating yourself turns you into a more knowledgeable, more successful person. Thereby, you can earn more money than those who are not willing to learn.

Napoleon Hill wrote in his “Think & grow rich” as follows: “We are what we think about and do”, so you have the right to decide for yourself good or bad habits, based on perseverance in the action.

If you smoke every day, it quickly turns into your bad habit. If you persevere and discipline your capital/risk management reasonably, persistently trade with your strategy, and do not indiscriminately trade, etc., you have been forming extremely good habits for trading. And the result will come very quickly. You will become a successful trader and investor, not only in forex trading but also in stock or real estate trading, etc.

Persistence in building habits of a successful Forex trader

Perseverance and sticking to your trading strategy helps you to control and master it. Only then, you may really know whether it works or not. Changing trading strategies constantly, finding, and hastily testing new strategies that “other people” tell you that they can bring you a lot of money, will cause you great damage in both short term and long term.

How do you know if a strategy will work if you don’t really understand it, master it and spend enough time to test it? You might ask me how long is enough? My answer is at least 06 months.

Persistence in building habits of a successful Forex trader
Persistence in building habits of a successful Forex trader

Perseverance in risk management is very important. Always fix the risk amount in the dollar (not the percentage %) for each trade. This helps you control your losses within a tolerance limit, both on your account balance and emotions. Many traders often change their risk levels. Maybe only after 1 or 2 winning orders, they are ready to bet bigger, then lose all the profits and even burn out their accounts.

Maintain your risk level in place, even after a (big) loss or a (big) win. This is a very important key to the difference between a professional Forex trader and an amateur.

Persistently monitoring your trading orders and recording daily trading reports (a form of transaction log) are the things you should do to have good and effective trading habits. These things do not take you much time. It is also quite boring and is probably the most “paperwork” stuff you have to do as a Forex trader.

Maintain your risk level in place, even after a big loss or a big win is very important
Maintain your risk level in place, even after a big loss or a big win is very important

Most traders do not do these things. They do not review on orders that have ended. They do not look back at the mistakes to make corrections or the right things to promote. And they become easily undisciplined and fail to create and maintain good trading habits to succeed in the market.

Perseverance is the catalyst of successful trading

A fighter pilot begins learning in classes. He then practices virtual piloting on computer screens. And eventually, after years of learning, he practices with real fighter planes.

A professional Forex trader also starts with courses. He studies online, meets these and those teachers, finds himself a suitable method then trades on a demo account. And later, when he feels confident enough, he can start trading on real accounts. From there, he gets along to live with the trading career.

Without patience, you cannot become one of these two examples or perhaps every other example of success in life. I have a simple formula for you: perseverance = habit = result.

The "formula" of a successful Forex trader
The “formula” of a successful Forex trader

Be patient with your trading strategy. Stay persevered in risk management. Consistently maintain your composure after every order whether you win or lose. That is you are giving yourself the best opportunities to make money in the long run.

Most traders lose money as a result of not having perseverance with good trading habits. Instead, they establish bad habits such as non-compliance with their trading strategies, undiscriminating risk management, excessive trading, etc.

Conclusion

The good news is you have the power to choose what you will focus on. You can choose to establish and repeat good or bad habits (you already know what they are).

In trading, you just need to fight yourself, not anyone else, or any other force. Train to be better than yourself yesterday on your way to becoming a successful forex trader.

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Saturday, April 17, 2021

How To Use The Piercing Pattern Effectively In Forex

This is a candlestick pattern that offers great confidence every time it appears. This is a sure warning candlestick pattern that the market will recover in the future. That’s how traders talk about the Piercing candlestick pattern in Forex.

In this article, howtotradeblog will introduce you to this special bullish candlestick pattern. Along with that is a guide on how to use it in Forex so that it is most effective.

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What is a Piercing candlestick pattern?

In Forex, Piercing Pattern (also known as Rising Sun) is a special Japanese candlestick pattern consisting of 2 candles. The first candle is a strong bearish candlestick. The second candle is a green candle with the opening price lower than the first candle closing price. Also, the length of the second green candle should be at least ½ of the body of the first candle.

What is the Piercing candlestick pattern in Forex?What is the Piercing candlestick pattern in Forex?
What is the Piercing candlestick pattern in Forex?

This is a strong bullish reversal pattern in the market. They usually appear at the end of a downtrend and serve as a warning signal for a strong market recovery in the future.

Market sentiment and the significance of the pattern

The whole market sentiment plays out in this pattern as follows: Initially, a red candle with a long body appears, showing that the market’s downside is still in progress. The sellers are still dominating.

However, when the next trading session opens, a gap down appears showing a breakout of support left by the previous session (closing price of the 1st candle). However, instead of continuing to decline, it suddenly turns up, creating a green candle that closes more than half of the previous candle. The creation of this pattern shows the price breakout and warns that the sellers have used up their full strength, creating confidence for buyers to push prices up again.

Meaning of the Piercing candlestick pattern in Forex
Meaning of the Piercing candlestick pattern in Forex

When combining 2 candles in this pattern, you will receive a Hammer candlestick pattern. This is a familiar strong bullish signal. The higher the price of the second candle closes compared to the first candle, the stronger the bullish signal will be.

On price charts, the Piercing pattern usually appears at the bottom of the market. They give traders a strong belief that the price will rise again.

The pattern usually appears at the bottom of the market
The pattern usually appears at the bottom of the market

How to trade Forex effectively with a Piercing pattern

Here, I will show you how to open a Forex order effectively when this pattern appears on the price chart. This is just a reference trading strategy using the Piercing pattern. For high precision trades, you need to combine it with other trading signals.

This pattern is a strong signal that the price will rebound. So you should open BUY orders with it only. You can open orders with the stop-loss and take-profit as follows:

+ Entry Point: As soon as the price completes the Piercing candlestick pattern.

+ Stop-Loss: At the wick of the second green candlestick in the Piercing candlestick pattern

+ Take-Profit: when the price touches old resistance levels that have been formed in the past.

How to trade Forex effectively with a Piercing pattern
How to trade Forex effectively with a Piercing pattern

All the knowledge that we have compiled is just theory. In order to be able to trade like a successful trader and bring real profits, you need to practice hard to sharpen your ability to trade in real terms. So get familiar with the Piercing pattern today on a Demo account to verify it first.

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Thursday, April 15, 2021

What Is Rising Three Methods Pattern? Effective Trading Strategy In Forex

Rising Three Methods is a pattern of bullish trend continuation. This pattern is very useful in an upmarket. In this article, I will introduce you to this special candlestick pattern. Along with that is how to trade Forex effectively with this pattern.

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What is a Rising Three Methods pattern?

This is a bullish trend continuation pattern consisting of 5 candles. The first candle is a strong bullish one followed by 3 bearish candles but with a short height and ended with a bullish candle. This is a warning signal that the price will continue to increase in the future.

What is a Rising Three Methods pattern?
What is a Rising Three Methods pattern?

Structure and characteristics

The Rising Three Methods pattern has the following recognizable characteristics:

+ The first candle is strongly bullish and has a long body.

+ The next 2 or 3 candles move downwards in a sloping direction, but not beyond the first candle.

+ The last candle must rise sharply and go beyond the closing price of the first one.

+ If a gap appears between the 4th and 5th candles, the effectiveness of the pattern will become higher.

Psychological movements within the Rising Three Methods pattern

This pattern signals a continuation of the uptrend. It often occurs during uptrends. Often after this pattern, the market will continue to go up strongly.

After the market creates a bullish candlestick, some traders begin to take profits. At that time, the buyers temporarily give up the game to the sellers. However, prices go down at a slow rate. After 3 sessions, the decrease is still not equal to the increase in just one previous session, showing that the selling force is not strong enough and the market confidence is still there.

Next, a very long bullish candlestick appears, confirming the continuation. It creates confidence for those who are hesitant and pours a bucket of cold water down on those who have just placed SELL orders in the previous 3 sessions.

Psychological movements within the Rising Three Methods pattern
Psychological movements within the Rising Three Methods pattern

How to trade Forex with the Rising Three Methods pattern

Here, I will guide you on how to place orders effectively with this pattern in Forex. This is a signal of a continuation of the uptrend. Therefore, please focus on opening BUY orders when the Rising Three Methods pattern appears.

+ Entry Point: As soon as the price completes the Rising Three Methods candlestick pattern.

+ Stop-Loss: At the opening price of the first candle.

+ Take-Profit: when the price touches old resistance levels that have been formed in the past.

How to trade Forex with the Rising Three Methods pattern
How to trade Forex with the Rising Three Methods pattern

Notes when using this pattern in trading

+ When trading with this pattern, it is best not to trade at strong resistance zones because these zones create strong resistances that limit the possibility of the uptrend continuation.

+ Some traders often prefer to open orders before the completion of the 5th candle to get better buy points. However, with this entry way, you need to react quickly to sudden market fluctuations. Therefore, this may not be suitable for new traders.

Above is an article about the Rising Three Methods pattern provided to you by howtotradeblog. Get familiar with this pattern on a Demo account before switching to live trading with it.

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The post What Is Rising Three Methods Pattern? Effective Trading Strategy In Forex appeared first on How To Trade Blog.



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Wednesday, April 14, 2021

Falling Three Methods Pattern And How To Trade Forex Most Effectively

As one of the popular trend continuation patterns, Falling Three Methods is the favorite signal of price action traders. In today’s article, I will introduce you to this special pattern. Along with that is how to effectively trade Forex when it occurs.

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What is the Falling Three Methods pattern?

This pattern is a special Japanese candlestick pattern. It consists of 2 to 3 weak green bullish candles that fit neatly in 2 strong red bearish candles.

What is a Falling Three Methods pattern?
What is a Falling Three Methods pattern?

Its name means that before the price continues to drop sharply on the last candle, it usually recovers slightly, creating 3 slightly green bullish candles. This is a very effective trend continuation signal for you to consider opening a SELL order in a downtrend.

Structure and characteristics

The Falling Three Methods pattern has the following recognizable characteristics:

+ The first candle is strongly bearish and has a long body.

+ For the next 2 or 3 green candlesticks, they indicate an upward rebound of the price, but not beyond the first candle.

+ The last candle must drop sharply and go beyond the closing price of the first one.

+ If a gap appears between the 4th and 5th candles, the effectiveness of the pattern will become higher.

Psychological movements within the Falling Three Methods pattern

This pattern signals a continuation of the downtrend. It often occurs during downtrends. After a Falling Three Methods pattern appears, the market will often continue to lose points miserably.

When the market produces a strong bearish candle, some traders begin to take profits. The sellers temporarily give up the game to the buyers. However, prices go up at a slow rate. After 3 sessions, the increase is still not equal to the decrease in just one previous session, showing that the buying force is not strong enough.

Next, a very long bearish candle appears confirming the trend continuation. It creates confidence among those who are hesitant that prices will continue to fall. At the same time, it pours a bucket of cold water down on those who have just placed BUY orders in the previous 3 sessions.

Psychological movements within the Falling Three Methods pattern
Psychological movements within the Falling Three Methods pattern

How to trade Forex effectively with the Falling Three Methods pattern

Here, I will guide you on how to place orders effectively with this pattern in Forex. This is a signal of a continuation of the downtrend. Therefore, please focus on opening SELL orders when this pattern appears.

How to trade Forex effectively with the Falling Three Methods pattern
How to trade Forex effectively with the Falling Three Methods pattern

Open an order as follows:

+ Entry Point: As soon as the price completes the Falling Three Methods candlestick pattern.

+ Stop-Loss: At the opening price of the first candle in the pattern.

+ Take-Profit: When the price touches old support levels that have been formed in the past.

There will be many more advanced uses and effective Forex trading strategies when you know how to combine this pattern with other signals. Get familiar with this strategy on a Demo account today to check it out.

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The post Falling Three Methods Pattern And How To Trade Forex Most Effectively appeared first on How To Trade Blog.



source https://howtotradeblog.com/falling-three-methods-pattern/