Everyone wants to become a profitable trader in the Forex market. In the past, trading the live asset was not possible for the retail traders as no leverage was provided by the brokerage firm. But things have changed dramatically and people can easily trade with the high leverage trading account. For instance, if you open a trading account with the reputed broker like ETX capital you can easily trade with big lot despite having a small amount of deposit. But having access to the online trading industry doesn’t mean you will become a profitable trader. You need to understand the language of the market. Many expert traders in the United Kingdom often says knowing the language of the price movement is mastering the art of trading. But how do we develop such skills? We will give you five simple tips which will help you to do the perfect market analysis.
Try to understand the nature of market
Most novice traders are always fascinated with the profit factor in the Forex market. They are always looking to secure bigger profit from this market. But do you really spent any quality time in understanding the price movement? If you closely observe the price movement you will find some sort pattern. There is a saying in Forex market. History repeat itself. You need to trade this market based on the support and resistance level. Never trade this market with a complex trading system as it will ruin your trading career.
Learn price action trading
Price action trading will help you to understand the price movement with an extreme level of accuracy. Most of the successful traders in the UK financial spread betting industry use the price action trading system to place a trade. But learning the price action trading system is really hard for the novice traders. But there is nothing to worry. You need to understand the psychology behind the formation of each candlestick. Instead of memorizing all the Japanese candlestick pattern try to focus on the most reliable price action confirmation signal. Make sure that you use them with proper risk management factors.
Do the fundamental analysis
If you truly want to become a successful trader, you need to understand the fundamental factors of the Forex market. At times you will see that the long-term existing trend of the market has changed due to high impact news release. So if you don’t learn fundamental analysis you will have to lose a significant portion of your investment. Never trade this market based on technical analysis. You need to develop a balanced trading system based on the three major form of market analysis.
Trade the higher time frame
Some retail traders say that they don’t understand the price movement. This is because they only trade the lower time frame data. In lower time frame trading you will always have to face lots of false trading signals. But if you do the technical analysis in the higher time frame you will see significant improvement in your trading career. At times, higher time frame trading might get boring but you need to remember that most of the professional UK traders do nothing 99% of the time. So never trade this market with aggression.
Use your rational logic
To understand the price movement of the market you must use your intellect. Some retail traders often say that they have precise knowledge about the trading industry but when it comes to real life trading they lose a significant portion of their investment. You can cheat yourself. Ask yourself whether you truly understand the nature of this market. You need to have a solid foundation about the trading industry or else you will never be able to find the profitable trades. Never take too much risk in any trade even though you have the perfect trade setup. Always follow the conservative method of trading.