This video talks about how to trade successfully in the forex market.
95% of people lose money in the forex market and if that figure is startling, then you need to read up on every tip and detail you can if you want to avoid being included in that number. How to trade forex successfully is the first thing you should try to learn before you chance any of your own money in the forex market. Currency is not trending all the time and choppy market is even more misleading because it can look as though trending is about to happen, and then it won't. These false signals to the price movement can lose people a lot of money. Forex signals can be confusing and they might indicate a correct move in one direction at one moment, and then it can move against you at the next moment.
This is called a whipsaw. The following three tips will help you avoid whipsaws. They are what all newbies go through if they don't have any knowledge of how forex works or a system in place to help them make decisions. Try to use the following strategies when you are trading. They can save you a lot of disappointment in the beginning.
- You have to train your eyes to differentiate between a trendy market and a choppy market. It is best not to get involved at all if you can't ascertain the difference. You need to know definitively if the market is bullish or bearish.
- Check the indicators and see if they are flat or steep. Use indicators to assess whether the market is choppy or not. This little strategy helps to eliminate the whipsaws. You might consider using Stochastic and MACD to create forex trading signals. You should look to the indicators to cross up or down with a sharp angle, and that will indicate a trend is forming. If the indicators are flat, it just means that there is no trend.
- You should use a higher timeframe, like 4-hour instead of 1-hour. If you use a longer timeframe, it will mean you are trading over a long-term trend. And the larger the timeframe you use, the less whipsaws you get.
These three strategies can help you filter out the whipsaws. It is your best bet to steer away from choppy markets. You cannot really make big profits in choppy markets. If you can spot choppy markets, you will save a lot of money. Develop a proper attitude to reflect patience, discipline, objectivity, and realistic expectations. Also, realize that you will not make a huge profit on each trade. Consider using a demo account as most brokers will offer them.