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Forex Strategies – Daily Charts Are Your Friend

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Forex trading can be a very profitable business if you know what you're doing and most importantly have the time to do it. Most new traders get into the game learn about scalping and making the quick bucks trading on 5min and 15min time frames. While the lower time frames do work for many people and many are profitable with that time of trading, I find it constraining with my lifestyle.

I started trading my freshmen year of college and with classes and a part time job. I couldn't afford the time to sit in front of a screen starring at charts. This is where the problem arises, scalping requires you to pay a lot of attention to charts and make sure you get in and out quickly. I tried this for a few weeks and couldn't keep up with everything in my life. I found a lot of other traders facing this issue as well. This is why I've changed a lot of my trading strategies to higher time frames such as the 4H and Daily charts. Now this wasn't an easy move and I was hesitant, since I thought it was too slow and I'd not make enough profits to be happy. I quickly learned I was wrong and over the last three years have made an effort to perfect my trading using high time frames.

There are many strategies to trade using higher time frames and they lend themselves for people who have full time jobs, go to school. Just don't want to sit in front of a computer while life passes them by. My normal trading day now is a lot less hectic than before, I look at charts 2 to 3 times a day, unless huge news comes out from somewhere. I do this by using support and resistance lines, which i will go into more soon, also browse just a small number of news sites and blogs to make sure I know what's going on in the world.

My main method of trading uses support and resistance lines based on 4H, daily and weekly candles. Support and resistance lines are used by traders worldwide to see where exactly price action has issues breaking through key levels. For instance when the EUR / USD goes above or below the 1.40 level, we'd refer to that as a key S / R level, since many traders will put high emphasis on it. This is because if price breaks the 1.40 level price normally keeps going as many pending orders all filled right after by not just traders but banks and funds.

The main thing to learn about being a trader in the forex world is that you're insignificant. The real players in forex are the banks and hedge funds that can sell or buy millions and billions in a single order. This is why by setting pending buy and sell orders where they set their orders we can make profits. I also try to stray away from too many fancy indicators, since they clutter the charts and confuse more than inform you as you trade.

These are the basics of trading high time frames and being profitable without sacrificing your entire life. Remember you're just one trader go with the flow and don't fight price action, because you'll lose.



Source by Gustavo Feliciano

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