How to enter the forex market on the right trend
Sharefounders broker, reviews from traders proves that the main thing is to exclude false breakdowns - the sudden price jumps along the trend line, which does not signalize about the reversal.
Today we are not discussing the first steps of the new trader in the forex. Sharefounders prepared this article for traders, who have already mastered the basics of trading on the currency market. There traders are ready to develop their trading strategy. This article is helpful for those who have already got a basic knowledge of the terms and laws of the currency market. To use the article, you should understand the concepts of upward and downward trends, trend reversal, support, and resistance levels, as well as the volatility of the currency market.
So, as an experienced trader, you should know that “to enter the market” means “to open a trading position”, or a trade deal. The entry point, or the timeliness of a position, affects the profitability of the transaction. Of course, it is not the sole factor that influences profitability. An exit point, or time of closing a position, as well as tracking, is also essential for profitability. If you enter the market correctly, you have a higher chance of closing a position with a profit, without claiming Sharefounders scam. By the way, the principles of entering the market are approximately the same for the forex market and stock market and commodity exchange.
Let’s consider several ways to enter the market: trading in a trend, against the trend, trading on a flat trend, and trading on breakouts. Each type of entry has its advantages, but it is also worth remembering about the pitfalls. If you ignore them, there is a considerable chance of losing your money, which will lead you to the erroneous conclusion that Sharefounders scammers. Therefore, at any market entry, we recommend setting the order limits that close the position when the price reaches a certain level.
Trading along with the trend: synchronize with the market
The best time to open a position along a trend is the beginning of a steady trend that continues for a specific time without significant peaks. For a beginner, the positions along the trend are the most preferred type of entry into the market. The main problem is to determine whether this is a strong trend. The experts at Sharefounders broker are aware of the problem that most traders face. They face a psychological barrier - to enter or not to enter, it is time to open a position, or they must wait. Therefore, most traders open positions very close to a trend turn, which is quite risky. An inexperienced trader may have not enough time to close the position with a profit, which will lead to the erroneous impression that Sharefounders scam.
Imagine that you enter the market after a period of strong volatility - for example, after the release of important economic indices or the publication of a large corporation annual report. After a period of instability, the price of the main currency pairs should level out and move in one direction for some time. But there is a risk that the price movement interrupts without becoming a trend. The main fear of the trader is to miss the fall into resonance with the forex. Sharefounders offers a way to increase the chance of getting into the rhythm with the market.
To prevent a too late trend in the market, you need to use tools for the market analysis, build charts, and find the support or resistance levels and use them as a starting point in which you plan to open a position. For more precise settings, you need to use the so-called touchpoints. It is easy to display a trend line on the chart in a trading terminal. When the price of a pair touches this line for the third time, this is the best time to enter, according to experts of broker Sharefounders.
To secure your deal, you need to determine price levels in advance. According to the experience of Sharefounders broker, reviews from traders proves that the main thing is to exclude false breakdowns - the sudden price jumps along the trend line, which does not signalize about the reversal. It is best to wait for the completion of the candle - a sharp jump in the price - if the breakdown is false, it will happen pretty quickly.
Trade against the trend: support equals resistance
Trading against the trend is more complicated than trading along with the trend, which is known to experts of the Share founders broker. You can open a position against the trend if you are confident that the trend reverses very soon. Let us suppose the price of a selected currency pair goes up. Suddenly, the trend reverses in a downtrend. But you do not notice the visible reasons for such reversal. In this case, you can risk opening a position up. Ideally, the price of the pair will fluctuate for a while, and then move up again. In this case, often, the support level coincides with the resistance level, at which the trend reversed.
One of the signals showing that you can enter the market against the trend is the so-called “triple touch”, when the price approaches the resistance level three times without breaking it. But if you focus on this signal, with the third touch, you need to act immediately. The trend can reverse very quickly, leading to a loss of deposit and the sad conclusion that Sharefounders scammers. Therefore, trading against the trend is not recommended for new traders.
Breakout Trading: Tailing Luck
Breakout trading is the riskiest, but the profit is the highest. A significant role in breakout trading is to set the stop loss - pre-set orders that close when a price clears the set level says the broker Sharefounders. Reviews show that the best way is to open a deal when a trend enters the correction phase after a previous break.
For better analysis, you can use Fibonacci numbers. This is especially useful when the trend movement takes on a zigzag pattern. Fibonacci levels allow you to determine the depth of trend correction. It is best to enter the market when a correction is in the interval between 23 to 38%. But such type of strategy is well suited for short and medium-term trading on the forex. Sharefounders recommends not to steak to the breakout trading as the main strategy. Besides, we do not recommend opening a position on the entire size of the deposit.