The basic idea about how to trade the Forex market, as well as other markets, is try to buy cheap and sell high and vice versa.
It is not as easy as it sounds though, we first need to analyze the long term charts and determine which pairs are likely to go up, down, trade in a range, or will trade in an erratic range. We then look for a low risk trade opportunity in the short term charts.
For instance, let’s take a look at the next chart:
This is the GBPUSD 30 minute chart, as you can see, the market is ranging (when it gets close to the top of the range, the market starts to fall down to the bottom of the range, over and over).
Our job here as traders is to identify:
- At what point we should enter the market (timing)
- How much to risk on each trade
- When to exit the market if it goes against us, or in our favor.
- Once we are in a trade, how we will manage it (add to the position, take partial profits, etc).
Then we can make a trade decision and trade the Forex Market.
In the Forex Training program you’ll learn to make all these decisions at the right time. Click here for more information.
Tags: New to Forex