There is a saying in Forex market that “History repeats itself”. Majority of the professional traders follow this proverb very strictly to make a consistent profit. On the contrary, the novice traders always tend to create the new trading system. The thing which has worked in the past might work in the future also. But the things which have been developed for the very first time is most likely to not work. Today we will discuss how to learn to trade from the historic price movement of the currency pair. The novice traders always consider trading as the best place to make money. In fact, it’s true that you can make a huge amount of money just by trading the live assets but to do so you must have a valid trading system. If you start executing random trades without doing to market analysis then chances are very high that you will become the ultimate loser of this market.
Study the market trend
“Trend is your friend” a well-known proverb in the Forex market. If you want to succeed in Forex market then must trade in favor of the market trend. It’s not like that you won’t be able to make a profit by trading the reversal. But when it comes to success rate you will be surprised to see that majority of the traders are losing money by placing their trade against the market trend. Some of the might say what the best way to ride a long term trend in currency market? Though there are many ways to ride a long term trend but the most effective way is to use the Fibonacci retracement tools. Those who are trading the market for a long period of time has learned the perfect way to use the Fibonacci retracement tools. If you are not sure how to use it then do some online research and you will find plenty of books and articles on Fibonacci trading.
Look for potential trade setup in daily time frame
Daily time frame trading is one of the best ways to avoid the false spike and trading signals. In fact majority of the successful traders in the forex trading industry use the daily time frame to execute their trade. When you draw the key support and resistance level use the major’s swings of the market. Most novice traders tend to draw the key trading levels in the lower time frame. But you should know that minor support and resistance levels are often broken without any high impact news release. It’s true that if you trade the lower time frame then you will have lots of trading signals but study the price history. You will clearly see that most of the false trading signals are generated in the lower time frame. So if you think that this market can be traded in the lower time frame then you need to stay cautious with the false spike and signals.
Learning from the expert
The best way to learn trading is seeking help from the successful trader. The novice traders often say that they have not seen any successful trader. In that case, we must say that they are not fully devoted to this market. There are thousands of traders making millions of dollars in every single year just by trading. You need to stay active on the social media platform and then you will notice that there some traders offering free signals and advice. If you closely observe their trading performance then within a short period of time you will understand who the best trader is. Talk to them and see how they teach you about this market. If they tell you that previous price data is the most important element then you have found a professional trader. But no matter what you do make sure that you never trade the market with any amount that you can’t afford to lose.