When to enter a forex trade? Simple rules for a novice trader who often forgets to use them in Forex trading.
First of all, you need to know which position to open, short or long. If the market is bullish, then the trader is focused on buying (long position), and if it is bearish, then selling (short). The old adage “buy low, sell high” holds true in this regard.
When to enter a Forex trade?
To understand this, you need to decide on several aspects:
- 1. Identification of a trend. If you have no idea about the trend, you will not know the direction in which to trade. Thus, knowing that the market is bullish will lead you to buy, and understanding the bearish trend will lead you to sell.
- 2. Definition support and resistance levels. They will keep you from entering the market at a time when the price is likely to reverse. If the trend is up, but the current market price is close to the resistance area, you should be careful. You also need to act if the trend is down, but the current price is near the support.
- 3. Receiving a trading signal. He tells you that it's time to enter a Forex trade. If a signals still not received, you must wait. It can be difficult, but don't be in a hurry. The presence of a trading signal suggests that you have formed rules that determine the best moments. If you don't follow the rules, you are setting yourself up for failure.
After identifying the trend direction, support and resistance levels, as well as receiving a signal, it's time to enter a Forex trade. Successful trading!
Read also - Feedback from one trader: how he earned 1000$ in 21 days!