Essential techniques that can make you a great trader

Top traders in the Forex market are always making smart moves to protect their trading capital. They are not biased about the market movements and thus they never take the trades with emotions. On the other hand, rookies get emotional about trading and keep trading the market with emotions. Eventually, they lose a big portion of their trading capital. If you truly believe trading is the right profession for your business, you must learn some essential techniques.

In this article, we are going to teach you some essential techniques which will allow you to become a better trader within a short time. Follow the tips mentioned in this article as it will help you to earn more money.

Learn to use the Fibonacci tools

As a new trader, you might not know about the functions of the Fibonacci retracement tools. We all know using a trend trading strategy is the most effective way to make money in the online trading industry. Sadly, we don’t know the proper way to find the endpoint of retracement in any trade. This is where we need to use the Fibonacci retracement tools. With the help of the Fibonacci retracement tools, retail traders can easily pinpoint the endpoint of the retracement and take their trades with great confidence. While drawing the retracement level, focus on the higher time frame as it will give you a better picture of the market.

Learn to use the moving average

Elite traders always use the moving average to improve their trade execution process. If you install the 100-period moving average at the saxo trader platform, you can easily identify the key reversal points. If the price trades above the 100 periods moving average, consider the trend to be bullish. Similarly, when the price trades below the SMA, consider it as a sign the market is in a bearish trend. As soon as the price crosses the moving average, you can expect a change in the trend. However, you need to take the data reading in the daily time frame or else you will never get accurate data regarding the trend reversal.

Using the EAs

Those who are trading the market for a long time, often use the EAs to ease the process of trading. EAs are expert advisors who perform a certain task for retail traders. Let’s say that you want to analyze the market data after the price reaches a certain level. Instead of monitoring the price level, you can set the EAs to monitor the price level for you. Once the price reaches that specific level, the EAs will give you an alert signal and you can do the data analysis. Thus process usually saves a decent amount of time. Unless you are extremely skilled at doing the data analysis, you should not be using EAs in the market.

Using the chart patterns

The chart pattern trading method is by far the most efficient way to make big profits in the retail trading industry. The novice traders often think they know a lot about the market and they can easily make a profit by trading the major reversal patterns. Before you start trading the major reversal pattern, you need to learn its functions in the demo account. Unless you can consistently make a profit in the demo account with the help of the major chart patterns, you should never use it to trade with real money. Start with the continuation pattern as the risk factors are a bit lower. Use the price action confirmation signals as they will give you a clear indication about the market.

While trading with the chart pattern, you should reduce the risk factors to 1%. Once you become confident with this trading technique, you may trade with 2% risk exposure. Unless you are certain that you can deal with the market dynamics with this advanced technique, it would be wise to learn chart pattern trading in the demo environment.