Most common mistakes in chart pattern trading strategy

Adam Smith

Dec 14, 2015
Chart pattern trading is one of the most effective ways to make money online. You might be new to the trading industry buy still you can easily make a profit just by trading the major chart pattern. Things might not seem extremely difficult at the initial stage but once you learn the basic details of trading business it won’t take much time to develop your skills. Though there are many ways to trade the market the pro traders in Singapore prefer to use the chart pattern trading system. The chart pattern trading strategy allows retail traders to catch the large market movement with an extreme level of precision. Let’s learn some common mistakes made in chart pattern trading strategy.

Dealing with the 1 hour time frame

The new traders are always looking for profitable chart pattern in the 1-hour time frame. They think the 1-hour time frame is big enough to get the overall picture of this market. But in reality, the trading 1-hour time frame is more like scalping. You will have to deal with too many false signals and at the end of the month, you are going to lose a big portion of the investment. Always try to find a quality chart pattern in the daily and weekly time frame. Though it requires patience, still it’s better not to trade the market in the lower time frame.

Dealing with the major news

News trading is one of the most effective ways to make money online. Very few traders in the exchange traded funds industry knows the perfect way to trade the major news. You must understand the different chart patterns to catch large market movements. So, you need to learn fundamental analysis to become better at trading. This is where most of the rookie traders make a mistake. They consider the fundamental analysis as a useless step to find great trades. But if you use the Saxo demo account, you can easily understand most of the major breakouts in chart patterns occur in the event of high impact news.

Using signal service

A group of traders always look for the shortcut way to make money online. They buy expensive signals from trained professionals and try to make a huge profit from this market. As a chart pattern trader, you need to understand the fact, the outcome of any trade is completely random. Unless you train yourself properly it will be really hard to make money online. Stop trading the market with other people opinion since it will never help you to make a profit. Try to learn the manual art of trading so that you can deal with the dynamic price movement of the Forex market.

Trade with discipline

Being a chart pattern trader, you must trade the market with an extreme level of discipline. Never think you can make a huge profit from this market without following the proper guideline. Take your time and wait for the best trade setups. Unless you spot a valid breakout in a major chart pattern, you should never execute the trade. Try to follow all the basic details of this market and it won’t take much time to develop your trading skills as a currency trader.

Keep on learning new things

You must educate yourself properly to become better at currency trading business. Stop thinking about the Holy Grail in the Forex market. Forex market is always changing its nature and you must keep pace with the latest dynamics. Read about the global economy so that you can easily scale your trade. Unless you have precise knowledge of the three major forms of market analysis, you can’t trade the major chart patterns. Make sure you never commit the above mistakes. Write down your trading plan and develop a strong thirst to learn new things about this business.