If you want to maximize your trading returns, then you must have an understanding of market cycle. Most of the traders either fail to recognize that markets are cyclical or forget to expect the end of the current market phase. You must have observed that the price of a stock never moves in one direction. It always move in a zigzag manner whether its an uptrend or downtrend or a sideways market. This Zigzag pattern shows that they are following a cycle called a market cycle.
A very important rule is maximize the profits of the trade and keep the losses to a nominal. I hear regularly about online day traders who entertain 100 point or tick defeats and remain in their impugning account busting trade. A wise trading program will keep losses small and cut them fast rather than hold the losers. A good trader can see when the market is ready to burst. Do not enter the market when the trade is not in your direction. If a mistake is made and the market reverses, against your trade, get out! There will be more trades to come.
There has been an explosion in the retail forex industry. This is the hottest online trading sector. There are many brokers now also known as FCMs trying to entice people to start trading forex. Forex the hottest market right now. After the stock market crash of 2008, many people have turned towards forex. Forex trading is being called the recession proof business of the 21st century. You see in the stock market, either the Market Sentiment is bullish or bearish. But in case of forex market, their is neither a bull market nor a bear market. If one currency in the pair goes up, the other invariably goes down.
On the contrary, smart investors like Warren Buffett embraces volatility. He reasoned that if a stock A is trading at $ 50 and has a fair value of $ 60. Shouldn’t A be less risky if it plunges to say $ 20 or $ 15? That is a valid point. This of course assume that the fundamental that caused the drop has not changed.
Don’t take advice from someone who’s never lost money on forex – take it from me such an animal doesn’t exist. Traders love to boast of their successes but if you look behind the scenes they usually have made even bigger losses (it’s an ego thing). You are much better getting advice from someone who’s been round the block and back as the best lessons are learnt from our mistakes not our successes.
When it comes to stocking trader profession, wherein he or she acts as the clients financial manager while they analyze ways on how to add value to their client money. Aside from adding value to the stock or finances of a client, a stock trader also buys stocks. Their intention is to hold the stock for a longtime and find the perfect timing for a stock to gain momentum to reach its peak value. This usually takes months to years end.
There are many different shapes in a candlestick, and when put together a same candlestick can give different meaning. Candlestick charting is a unique skill and there are courses that teach purely on candlestick charting.