Hello and welcome to another edition of the bulls vs the bears. This week we are going to look into how to look into the crystal ball of your next forex trade. No, we’re not learning how to be soothsayers overnight. We are going to learn how to anticipate the next trade before it happens. To paraphrase a famous saying it’s preparation meeting opportunity. If you want to be a successful forex trader, you need to have a plan. You can’t go in with the attitude of “wing it and let the chips fall where they may”
Based on your trading plan you anticipate on how the next trade is going to shape up . This is where preparation meeting opportunity comes in. With your trading plan in place you should have a fair idea of what the next trade is going to look like. So basically we are going to learn how to anticipate trades and then make our entry.
Understand What The Forex Market is Doing
You need to understand what the forex market is doing. How do we do this? By identifying in advance variables such as where the key levels are, where the hottest trends are, price signals et.c. It will be in your best interest to turn this habit into a regular routine every week. Some of you may be going “But this is boring.” Well, boring is good, especially if you plan on being prosperous as a forex trader. Once you’re able to ascertain what’s happening on the market, you should be able to make your entry without fear or favor.
You can now focus on anticipating trades at key levels and other value areas. One you recognize a price signal forming at one of these areas, you can make your move without thinking twice about it. By price signal we are referring to a price action signal, or even a retrace to a key level. So don’t just react to the happenings on the market. You should know way in advance of the next trade formation based on your identification of the key levels. Now let’s see an illustration of key areas that have already been mapped out. Ladies and gentlemen, here is an illustration of an old resistance level now turned into support. The old resistance is marked pink at the far left corner. Whereas the support area is labelled blue. Notice the three support areas labelled blue. It’s pretty obvious that there is an ongoing struggle between the bulls and the bears. Price seems to be holding up quite well. And when that happens, it can only mean one thing – The bulls are about to break out and head for the hills.
With that in mind you gently place your buy signal close to the tip of the bullish candle right on the support level and watch the bulls start their procession to the hills. For more information on key levels look up Identifying Support and Resistance levels with Price Action Analysis
Keep Your Eyes On Dynamic Zones
You need to keep an eye on dynamic zones in the markets. By dynamic zones we are referring to areas where price action is happening at the speed of light. You see the whole idea behind anticipating trades is having a plan as to how you will react when so and so happens. This approach is more professional than trading like a Las Vegas gambler. with no rhyme nor reason behind your trades. You need to trade like a sharp shooter instead of a suicide bomber.
Now how does one keep in tune with the dynamic zones?Well performing weekly and daily market analysis is one way of getting in tune with the dynamic zones. In fact it’s the only way to stay in tune with the dynamic zones and learn to anticipate high probability trading scenarios. Your marksmanship as a trader will come in real handy in this scenario.
When you sit behind your laptop, there is no need for you to hunt for trades. By time you turn the power button on, you should have a pretty good idea of which markets are hot right now and where to look for signals. And the best place to search for trading signals are in areas of confluence and key levels. based on previous analysis you’ve already done.
Let’s take a look at a classic example of such a scenario.
Here you have a nice looking example of the confluence scenario I just explained. Keep a close watch on the three price signals. The first signal is at the level of support via the engulfed candles. The second signal is at the level of support. And the third signal is at the breakout point where a bullish trend forms.
The neat thing is all three signals are unfolding at the same time. They’re coming together simultaneously. Where three such scenarios form, your crystal ball should tell you that it’s time to cash in. For more information on trading confluence areas, look up Something Called Confluence.
That’s a wrap for ”Trading Less Will Bring You More Profits.” Instead of reacting to what the forex market is doing, how about anticipating what the forex market will be doing? You can only accomplish this task by identifying the key levels, hash out a trading plan and anticipate the trades. In plain English, exercise self-control instead of allowing the forex market to control you.
I’m going to be real honest with you. The market will not always appear on the high probability /confluence areas that you highlight on your price charts. But when it does appear you need to be ready like a marksman. This where your trading edge comes in real handy. If it’s not present on the price charts DON’T BOTHER TRADING. If you have no idea what a trading edge is look up You Need To Sharpen Your Trading Edge. Til next time take care.
Looking To Join The Forex Trade Gravy Train?
If you’ve stumbled in here looking to join the forex trade gravy train, here is what you need to do . First, look up Why Forex Trade Is So Popular. Next, you learn the fundamentals of forex trading by reading Forex Trading Basics – Top To Bottom Part I and Forex Trading Basics – Top to Bottom Part II .
Next, you need to learn how to read candlestick patterns. They are the main feature of price action analysis. And you need to know what these patterns are telling you. To be able to do that, read the following on Fundamentals of Reading Candlestick Patterns, Single Candlestick Patterns, Dual Candlestick Patterns, and Triple Candlestick Patterns . Also You Need To Know Ten Of These Candlestick Patterns .
And finally If you want to give your trading skills an edge by relying on pure price action trading/analysis, instead of fancy forex robots and fancy indicators, get started with What is Price Action Trading?
Looking to get a leg up on price action analysis,?you need to learn How to Identify Support and Resistance Levels. And if you want to learn how to interpret trading zones, read up on Identifying Dynamic Support and Resistance Levels. Finally you should know How To Read Candlestick Patterns using Support and Resistance Levels.
However, if you only want to trade once a month and watch your entry rack up huge profits over a stretch of several weeks, consult How to Spot High Probability Trades. And if you are still not sure about price action trading, find out Why Price Action Trading Still Rocks . Dont let me stop you from reading the other posts as well. But the suggested posts above are the most important posts to get you started.
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If you want to know everything there is to know about price action trading, Download for free The Ultimate Guide To Price Action Trading by Rayner Teo. This brilliant ebook will change your life. It sure did mine.
Opening Of Live Forex Trading Account
If you’re looking to open a live trading account sign up with EasyMarkets. But if you want to get a feel for the platform first and practice your trading strategies before going live, open a free demo account with EasyMarkets If you want to more information about easyMarkets before opening a live/demo account read my review My Personal Take on easyMarkets