One Way of Trading the Forex Market – Part 2

Filed under: Learn Forex Trading |

Screen shot 2013-06-15 at 12.11.51Continuing on from yesterday, we are looking at just one way and one method of trading the forex markets. So, after you have marked in your support/resistance levels on your daily charts, you can move on to step 5…

 

STEP 5: Look out for any price action signals (pin bars, inside bar, engulfing patterns, or breakouts) near areas of support/resistance. If there are, think about initiating a trade.

 

STEP 6: Once in a trade, always set a stop loss. This can be below the low or the high (depending on whether it is a long or a short trade) of the price action setup.

 

STEP 7: Think about setting a target. This can be near the next support/resistance level, or you can simply manage the trade and exit based upon what price action is telling you.

 

STEP 8: Move your stop up to a few pips below the low of the last three candles for long trades, and a few pips above the high of the last three candles for short trades. This allows you to ride trends, while getting out of the market early if it turns against you.

 

STEP 9: If an obvious price action signal forms against the direction of your trade (such as a long pin bar), then think about exiting the market immediately.

 

STEP 10: Stay in the trade until either your target or your stop loss is hit. Never move your stop loss further away, although you can extend targets if the market has a lot of momentum.

 

And that, in a nutshell, is it – a trading method that you can follow. If you do not understand any of the terms used in these ten steps, then simply search for that term here at Forex System Reviews, and you should be able to find a past article explaining all about it.

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