PATERN CHART STRATEGY, SIMPLE STRATEGY IN FOREX TRADING
In trading, novice traders often feel confused in determining the suitable forex strategy for them. They often feel the strategies they use do not match the reality in the forex market.
Please note in advance, there is no forex strategy that is always profitable. There are times when we will also experience losses. Because it's not just us who trade, but traders all over the world. So it's not wrong if the market sometimes doesn't go according to our expectations.
Therefore we need to study and learn to be able to get a deep understanding in trading. On this occasion, anymore business will discuss one simple forex strategy in trading, namely the chart pattern strategy.
What is a chart pattern strategy?
The chart pattern strategy is a forex technical strategy that is based on patterns on the chart. There are many types of patterns on charts. However, because this time we will discuss a simple chart pattern strategy, we will discuss the types of chart patterns in the next article.
The advantages of the chart pattern strategy
The chart pattern strategy has its own advantages when compared to other strategies. Where in this strategy a trader does not need to think about fundamental news, just sticks to the rules of applying chart patterns. In addition, another advantage of chart patterns is that we can easily determine the direction of market movement, be it an increase or a decrease.
Lack of chart pattern strategies
Just like other strategies, the chart pattern strategy has its drawbacks too. The first drawback of the chart pattern strategy is that it is not suitable for scalpers. This is because traders who use this strategy must analyze on the chart first and the analysis must be able to last for a long time. This is certainly not suitable for timeframes under one hour which is the timeframe used by scalpers, due to price movement patterns on timeframes. that is so rapidly changing.
Simple Chart Pattern Strategy For Beginners
To use strategy chart pattern, we need some built-in meta trader indicators to perform analysis. For details, we will discuss below.
Analysis stage:
1. First determine the currency pair you want to trade, it is recommended to use a major pair, namely EUR / USD, GBP / USD, AUD / USD, and so on.
2. Determine the direction of the trend using two trend line indicators. Please search your metatrader. Then, place one trend line at the lowest price and another at the highest price. To do this, draw a trend line from left to right.
3. Then, pay attention to chart movement patterns. If the trend line is pointing upwards, it is said to be an up trend. Meanwhile, if the trend line is pointing downwards, it is down trend.
For more details, consider the following picture:
4. Open a position when the candlestick is right or above the trend line that we have created. Both when the candlestick is at the top and in the valley.
5. To avoid false signals, use the relative strength index indicator as signal confirmation.
look at the following picture:
5. Determine your take profit and stop loss according to your daily profit target. Here anymore, Buisness made 250 pips take profit and 200 pips stop loss.
Conclusion :
As said before, this strategy is not one hundred percent successful strategy. There are times when we will experience losses. For that we need to understand the concept of money management, so as not to experience too deep losses. If you noticed, AnymoreBusiness deliberately made a take profit and stop loss with a ratio of 50 pips. This is one of the money management techniques.
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