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TRADING PRINCIPLES THAT EVERYONE SHOULD KNOW. PART 1.Hello traders! For a long time, the Forex market has created a large number of trading methods. Finding your strategy that suits you specifically is one of the main steps in achieving success in the Forex market. And it is worth remembering that successful traders do not use anything magical in their trading. Everything has been invented for a long time for both a novice trader and a successful trader. The main task of beginners is to choose a fairly easy strategy and strictly follow its principles and rules. So what does a beginner need to know in order to trade profitably? Price levels. It is difficult for a beginner to determine price levels and trade them correctly. There are no specific rules in this topic, since the price does not draw clear points, but forms zones. Many traders use support and resistance levels in their trading and for beginners, the main task at the beginning of the journey will be the concept of selling from resistance and buying from support. There are three types of trading systems based on price levels. 1. If the price moves within the framework of a sideways movement, the trader can sell from resistance and buy from support. 2. If there is a prevailing trend in the market, for example, bearish, a trader can sell from resistance and expect support to break through. 3. The same rules work in the bull market, only in a different direction. If the price breaks through the resistance, then this zone becomes a support from which you can buy. Consider the principles of trading from price levels. #1 Understanding the market context. The key to profitable trading from the levels is the ability to correctly understand the market context. Bearish pressure leads the market movement through an impulse movement that breaks through support and creates new lows – in this context, selling strategies will not work well. That is why it is so important to follow the concept of the market context: When the market falls, creating new highs and lows, we are talking about an impulsive bearish context. The correction is created by an impulse that is weaker than the main trend. A sideways movement occurs when both demand and supply are approximately equal and the price cannot move in a certain direction. As soon as the bulls or bears take over, the price will make an impulse in the direction of the strong side. #2 Top-Down Analysis The market is ruled by big money, which pays great importance to large timelines. And it is vital for an ordinary trader to know where smart money is pushing the market. To do this, it is worth noting strong levels on the monthly-weekly-daily timeframes in order to know exactly where the price is most likely to rebound. On the other hand, if the price is above the key levels, then the market is bullish. #3 Candlestick Patterns Almost every trader uses candlestick patterns in his analysis, which are a very strong analysis tool. Reversal candlestick patterns create an excellent opportunity to enter a trend reversal. The higher the timeframe on which the pattern was formed, the stronger its signal will be. Knowing candlestick formations is a very important part of a trader's professional growth. #4 Risk Management Any trader should be aware of the risks and be able to control them. Although this topic goes beyond the definition of the market context, it is still very important. There are many ways to control risks. An important rule is to set a stop loss and risk in each position, as recommended, no more than 2% percent. Hedge fund managers risk an even smaller percentage in each transaction, sometimes 1% or even lower. It is better to grow slowly than to fall quickly. If you lose 2% of the capital, in the next transaction, in order to get your money back, you will already need to make 4%, which in general is not difficult to do. But if you lose 50%, you will need to make 100% profit already, which is almost unrealistic. Conclusions Summarizing the above, you can make the following sequence of actions: Identify the key support and resistance levels. Wait for the candle to form in the desired direction. Stop loss above or below the candlestick pattern. Take profit is placed at the following support or resistance levels. Always make sure to use proper money management for each trade, and never take on a risk that exceeds the return. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
113
BEST CANDLESTICK PATTERNSCombinations confirming the reversal of the "bearish trend" 1. Inverted hammer and combinations of hammers. The hammer has a large shadow under the small green body, and the inverted hammer has a large shadow over the small red body. It appears, like all subsequent combinations, at the base of the downtrend, before the reversal. 2. "Bullish harami" consists of two candles: the first with a long red body, which covers the second with a short green body. A distinctive feature is that this model assumes a price gap. The fact is that "harami" in Japanese means pregnant, so if you look closely at the drawing, you will see that the body of the right candle is, as it were, inside the body of the left candle. 3. Short candles in the "star position". A "star" is a candle with a fairly small body, formed after the break with the closing of the previous candle, usually having a large body. Therefore, in this model, the candle should appear at the bottom of the downtrend, have a short body and open with a break down compared to the previous candle. The third red candle with a short body should close above the first candle. 4. "The morning star in the position of three candles." Here, the first candle should be red, which indicates a strong downward movement, the second has a short body and is formed with a gap relative to the first candle, and the third candle is necessarily green, the price of which has increased to at least a value at the level of half the body of the first candle. Ideally, the morning star should have a gap before and after the second candle, but the gap between the second and third candles is rare. 5. A short candle in the "harami" position. This combination is similar to the "bullish harami" that we described earlier, only in this case the second candle is short and red, but it is also located in the body of the first candle. The third candle is necessarily green. Combinations confirming the reversal of the "bullish trend" 6. "Bearish harami" is the same as "bullish harami", only a long green body should appear first, and a short red body should appear second, and the body of the right candle is absorbed by the body of the first candle. The next candles go out. 7. "Bearish absorption". Here, the first is a short green candle, and the second is a long red one, and if you look, the body of the left candle is inside the body of the right candle. After that, the price decreases. 8. "Shooting star" is a short candle with a missing lower shadow and a very long upper one. 9. The bear cross "harami" is formed when the first candle is long and green, and the second candle ("child") is a "doji". 10. "A three-line star in thought" or in another way "the repulsed offensive of three white soldiers". This combination reflects a gradual steady increase in prices and consists of three candles, the opening price of each of which is located inside or near the previous green body. The closing price of candles is equal to or approaching the maximum prices. If the second and third candles (or only the third candle) show signs of weakening, that is, their bodies gradually decrease or relatively long upper shadows form, then the "repulsed offensive of three white soldiers" model is formed. This pattern should cause particular alarm if it appears after a long uptrend.
Education
by DeGRAM
2
DeGRAM | EURUSD long from support to 1.132The instrument in the last trading day of the last weekly session was abruptly bought back and formed an engulfing. The price updated local tops and broke through resistance levels. At the moment, the currency pair rolls back to the support level 1.126, from which I expect the price to consolidate and rise to the resistance level of 1.132 ------------------- Share your opinion in the comments and support the idea with Like. Thanks for your support!
Long
by DeGRAM
5
DeGRAM | EURUSD forecast for the week. Short after pullback The trend is not broken, the price only retraces against the background of the bearish trend. The instrument did not reach a strong level by several points, so the interest of a major player remains at 1.1168. A pattern that supposedly can suggest a market reversal in this situation, when the key point has not been reached, is most often a scam, players who were in a hurry and or did not manage to enter the market enter the market, but at some point the price reverses again and moves to earlier not achieved goal, here the others fall into a trick. I think that after a rollback, the price will continue falling along the trend. Key zone below 1.1168 ------------------- Share your opinion in the comments and support the idea with Like. Thanks for your support!
Short
by DeGRAM
3