Trading Market: Normal (Non-trending) Trading Strategies
Trading Market: Normal (Non-trending) Trading Strategies
In the foreign exchange market, it is no doubt that fortunes can be made from trends.
However, it is not always the case when the market cooperates. The trader must be able to develop solid techniques for times when the market is not trending. Doing so can be done around specific tendencies that are most common to the currency market.
The Key Indicator
Natalia Osorio Editor of the "Best Forex Trading" website -- http://www.BestForexTradingUsa.com -- pointed out;
"In forex trading, there are several indicators that people use, including the RSI or relative strength index, the exponential moving averages of EMAs, and the Bollinger bands. However, there is another indicator that stands above the rest, which is the price. It has always been the ultimate indicator, compared to other mentioned indicators who are merely equations of formulas that are applied to the price.
A good example is the moving average because it encompasses the average price of the trading vehicle over a selected period of time. The RSI or stochastic oscillators are used to measure the difference between the current price and the recent prices in order to determine if the pair is overbought or oversold"
Technically, the forex market does not have a price per se and instead, there is an exchange rate. The rate allows the traders to compare two currencies in one equation. Thus, the price is only another term for exchange rate in currency trading.
There are two elements correlated with the price: the support and the resistance. The support happens when the buyer continuously steps in at a particular price. On the other hand, when the seller repeatedly steps in at a specific price, this is known as the resistance. The support and resistance can be metaphorically referred to as the floor and the ceiling, respectively. If the price can bounce from the support, it can also fall from the resistance.
The Intraday Breakouts
When the trader is participating in any kind of trading, like the intraday breakouts, it is important for him or her to remember to use every type of advantage possible. Traders normally search for situations wherein the odds are in their favor, and then take the necessary course of action.
There are several instances of false breakouts in all types of trading, regardless of the trading vehicle. The false breakout only occurs when the price appears to break below support or above resistance, only to rise back above support or fall back below resistance.
There are negative effects of false breakouts and in order to reduce them, and improve the chances of success, it is important to apply intraday breakouts.
The Triangles
"Triangles, in trading, can either be ascending or descending. They can create great intraday breakout opportunities, due to their pattern, which creates a directional partiality for the currency pair. Firstly, the ascending triangle is formed by the combination of diagonal support and horizontal resistance. On the other hand, the descending triangle is formed through the combination of the diagonal resistance and the horizontal support" N. Osorio added.
Further Information About The Best Forex Trading Softwares And Resources By Visiting; http://www.BestForexTradingUsa.com
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