Trading the Forex market is really easy. You don’t have to learn rocket science to lead a decent life based on trading. To be honest, the majority of the retail traders are losing money since they don’t know the perfect way to control their emotions. They are always taking unnecessary risk and losing a significant portion of their investment. On the contrary, professional investors in Hong Kong are always trying to minimize the risk factors in each trade. Due to their strong risk management skill, they are able to make a consistent profit.
Everyone knows the famous phrase, “The trend is your friend.” To survive in the retail trading industry, you must learn the proper way to ride the market trend. The new traders are always placing trades at the top and bottom. They think the market trend is changed and they will be able to make a huge profit. Trading the tops and bottoms is nothing but a suicide mission for the novice traders. At the initial stage, you need to focus on trend trading strategy since it will dramatically increase your win rate. Today, we will give you some amazing tips which will help you to make a profit in the long run.
Daily time frame analysis
Those who trade the lower time frame will never be able to find the long term market trend. In lower time frame trading, you will be focusing on the minor retracement. Trading the minor retracement is nothing but scalping. To master the art of scalping you need to have extensive experience in the Forex trading industry. Most importantly, you will have to learn price action trading.
Once you truly master the art of price action trading, you can easily make a huge profit by using the simple trend line tools. For the bearish trend, join three higher lows with a simple trend line. Wait for a minor retracement and if you spot any bearish retracement signal at the trend line execute the short orders. When it comes to a bullish trend, just look for bullish price action signal at the critical support and place the trade with managed risk.
Fundamental analysis
You can never ride the long term market trend without doing the proper fundamental analysis. Fundamental analysis is often ignored by novice traders but this is the key ingredient to catch large market movement. So how do you learn fundamental analysis? Just open a demo account with Saxo and try to understand how this market works. See how the market reacts to the major news releases and you will have a clear idea of fundamental analysis.
Using the perfect stop loss
Trend trading strategy is extremely profitable but you need to use a proper stop loss. The novice traders always set tight stop loss and lose money. Eventually, the market goes in their favor and they become frustrated. For this reason, it’s better to use a wider stop loss. You need to give your trade some space so that it can work out. Make sure you not risking more than 2% of your account balance even though you will be trading with the market trend. However, those who have more than 1-year trading experience can risk 3-4% of their account balance.
Try use other variables
Though you will be trading with the market trend, it’s better to use other variables. For instance, many professional traders in Hong Kong uses 100 and 200 day SMA. The SMA provides dynamic support and resistance level to the traders. To be precise, it acts more like a trend line for the retail traders. Trading is all about managing the risk factors and finding quality trades. Never think you can make a huge profit by overtrading the market. Focus on quality trade execution and within a short period of time, you will be able to make a huge profit in this market.
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