BASIC STRATEGIES IN FOREX

Basic Strategies In Forex

To invest in Forex successfully, it is very important to draw up a plan and follow a strategy to the end. Never let yourself be carried away by impulses, you have to be disciplined, methodical, and invest with caution and above all with a cool head.

Pay attention because many can be very useful during your online trading adventures.

Plot trends and price range

To have a complete view of the markets, it is important to carry out market analysis with daily, weekly, and monthly charts. In fact, it can also help to look at charts from a few years ago to see how it has evolved.

The charts show the health of the markets and show us what their long-term behavior is likely to be like. In this way, trends are traced, both in the short and long term.

Follow the trends

Once we have determined the market trend, the next thing to do is invest in that trend.

Whether in the short, medium, or long term, the most important thing here is to follow the trend at all times, which will be our investment strategy.

If the trend is bullish, we will have to wait for regressions in the price and buy the pair to ensure a good price.

While in the event of a downtrend, we will have to wait to see a recovery in the price before making the sale of currencies.

Discover support and resistance levels

Locating these levels is important to carry out operations with more favorable results. Support and resistance levels will help us to determine more accurately the situation of the markets.

In practice, it is wise to buy near the support level and sell close to resistance levels.

Observe market corrections and setbacks

When a market manifests a correction, whether bullish or bearish, it always carries much of the previous trend. The same happens with the setbacks.

Investors measure corrections and reversals of a trend that already exists in simple percentages. The most common is 50% of a previous trend.

The trend lines

An effective tool is trend lines, you just have to connect a couple of points on a chart, and we will quickly check if the market trend is up or down.

If the trend is up, the line will be below joining low points, while if the trend is down, the line will be above the graph, joining high points.

Prices generally respect trend lines when approaching them. It should be noted that if a trend breaks, this will be a clear indication of a general change in the trend.

Training

Although it seems obvious, the truth is that there are people who are not prepared to trade currencies. There are people who see in this market an opportunity to give a return on their capital but who really have no idea how it works.

As expected, many of these beginning investors who launch into the market without knowing to lose a lot of money by not making the decisions that are best for them at all times.

Moving averages

With the moving averages, we will be able to determine in a much simpler way the market trend at all times.

Oscillators

Another tool that will be very useful for us when identifying markets in an overbought or oversold state is oscillators.

If the moving averages provided us with the confirmation of a trend, the oscillators go further and indicate the most favorable time to open a buy or sell operation.

The ADX Index

To determine if a market is in a specific trend phase or if it is oscillating between ranges, this tool is very useful.

The ADX index measures the strength of the trend, although it does not indicate its direction. So this tool must be used together with others that complement it.

The MACD indicator

This Moving Measure Convergence / Divergence Indicator (MACD) combines the crossing of moving averages with overbought/oversold elements of an oscillator.

Observing the MACD histogram, we can determine the difference between two lines and thereby perceive the changes that occur in the trend.

When trader trade in forex market will need a forex indicators mt4 to analysis the chart and identify the good price to open buy or sell trade

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