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Three simple rules to trade the major chart patterns

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  • Three simple rules to trade the major chart patterns

    The chart pattern trading is one of the best ways to ride the long-term market trend. Even you can trade the major market reversal with an extreme level of precision. Some of the experienced traders in the United Kingdom often consider chart pattern trading as the most advanced technology to make a decent profit from the Forex market. Though there are many kinds of the pattern as new investors you need to focus on the major chart patterns only. For instance, you should be looking for head and shoulder, rectangle or triangle chart pattern. Learning the basics of chart pattern trading strategy is very easy but when it comes to real life trade execution things become really different. New traders often get confused on the breakouts of the chart pattern and make a big mistake. You need to have the ability to filter out the false breakout in major chart pattern to save your investment. Let’s learn three amazing technique so that we can also trade the major patterns like pro traders.

    Analyze the data in the higher time frame
    Lower time frame trading is extremely risky as it generates tons of false trade setups. People don’t really understand that quality beats quantity in Forex trading profession. You don’t have to trade all day long to make a decent profit from this market. A few good trades are enough to support your family. When you look for potential chart pattern make sure you are using the daily or hourly time frame. Forget about the lower time frame data as it never helps in the long run. Try to analyze the data in the daily or weekly time frame since it’s the best way secure great trades. However, those who know the proper way to do the multiple time frame analysis can trade the lower time frame chart patterns. Trading the chart patterns is very easy provided that you have strong basis in the Forex market.

    Use the Japanese candlestick pattern
    Those who are comparatively new to the online trading industry might not know about the price action trading system. This is nothing but studying the price movement of the financial asset using the different patterns of the Japanese candlestick pattern. To become a pro price action trader you must have access to the robust trading platform. The pro-UK traders prefer Saxo as their primary broker as it allows them to enjoy the best possible trading environment. Once you learn price action trading, you can use the confirmation signals to trade the major breakouts. Never execute the trade once the price of a certain asset breaks an important level. Wait for minor retracement of the price and execute your trade with proper risk exposure.

    Use the Fibonacci retracement tools
    Those who are professional chart pattern traders always uses the Fibonacci retracement tools to reduce their risk exposure. You don’t have to rely on the chart pattern to trade along with the market trend. Try to combine chart pattern and Fibonacci retracement trading strategy to maximize your profit. The new traders might get confused with the Fibonacci retracement tools but this is by far the best tools you can have to trade with the market trend. Though this trading system is extremely profitable yet you should never risk more than 3-5% of your account balance in trade. Some traders often use the Fibonacci retracement tools to calculate the retracement level after the major breakout an important chart pattern. Developing yourself as a professional chart pattern trader might be a bit challenging but if you focus on proper risk management policy and demo trade the market, it’s just a matter of time to master this skills. Always make sure you are not trading the lower time frame unless you have extensive experience in multiple time frame analysis.

  • #2
    These are some great insights! Thanks for this.

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    • #3
      I don't do stocks or trades. Most average every day Joes don't. While I am sure this information is great, I will be honest in saying... I have no idea what any of it means lol

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      • #4
        Great Post. Thanks for taking your time out to post this!

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