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Foreign Exchange (Forex) designates the foreign exchange market, i.e. the place of stock market exchange where convertible currencies are exchanged according to constantly changing exchange rates. It involves dynamic trading that requires seriousness and rigor. In addition to these capabilities, Forex sometimes also involves the use of complex techniques involving advanced scientific and economic analysis.
There are two types of Forex trading: day business And Long trading. Its general procedure day business different from scalping Trading short term and long term positions.
In particular, the day business If you enjoy market analysis and are willing to spend time planning and monitoring trades during the day, this is a good option. Overall, this style is well balanced in terms of the patience and mental resilience needed to do the job well. To learn more about this trading method, it is possible to open an account at Libertex with access to detailed information on the associated risks and benefits.
Its various techniques day business
Trend Trading (Trend trading)
It capitalizes on various bounces and resistance drops in line with the overall trend, thereby increasing the probability of success. Choosing multi-time analysis (choose timeframes from D1 to M30), basic trend indicators and oscillators as well as charting tools like Fibonacci are required. Don’t forget to draw the trend line: this is the easiest step and yet it must be respected. These few things will help to find the moment when the trend starts again and join a fast uptrend.
Trend trading involves watching for bounces, or trading where prices drop, and investing as soon as the trend changes. The plan here is to buy at low points and then sell a few hours later when the currency price has risen again.
Countertrend Trading (Counter trend trading)
Price is not always in pro-trend mode when analyzing a daily chart. As a result, it is possible to trade on a correction, in addition to waiting for a trend setup. Here it is necessary to master reversal candlestick patterns, oscillators and various techniques that will help to find support/resistance levels and pick the really important ones.
So countertrend trading is a strategy that assumes that a certain pattern will reverse; Traders aim to profit from this reversal. Generally, it is best used in medium businesses, but it can also be used on a per capita basis. day business If the trader knows what he is doing. Countertrend traders rely on oscillators, indicators and envelope channels to make decisions and are a great option for traders who see strong potential for pattern reversals.
breakout trading (Breakout Trading)
To follow this method, one should focus on the most important price levels and initiate a trade when the price crosses them. Knowledge of S&R levels and their meaning is an essential parameter of this strategy. In addition, it is necessary to know how to distinguish a true break from a false one. Finally, since intraday breakouts are often associated with news, it is necessary to stay on top of the situation immediately you and monitor the economic calendar.
This technique is therefore ideal for day trader Because it involves taking a position with a trade at its initial stage. Traders usually buy a stock or currency by looking at its resistance and support levels. They are therefore often wise investments. Once the stock or currency finally closes, profits must be made.
Case-specific risk management
Each approach requires disciplined risk management, with some differences in each case. For example, breakout trading would require a tighter stop and a greater reward for risk. There are many indicators and technical tools that will come in handy over time day business. TR (mean true range) will display the size of a typical price movement over a period of time and warn of rising volatility.
Moving averages will provide much needed dynamic support and resistance levels (applying a 200, 100 and 50 period SMA for this purpose). Pivots and Fibonacci points help place price positions relative to a trend or previous price move. The oscillator will let you know when the market is overbought/oversold/diverging from an indicator so you can decide not to continue trading with or against the current move.