Forex trading is the most versatile market where currency pairs move back and forth at the Forex trading platform and that is why it not easy to identify the exact trend of the market inflows.
Forex is of various types long-term and short-term trading, out of these two the one, which is more easy and quick to transact, is short-term forex trading but for this trader should learn about the tricks to carry out these trade deals.
The main elements of the Forex are the support and resistance levels and these levels are brought up with the fluctuations in the currency pair actions at the market. The sideways movement of the currency pair forms a certain range of trading and that range is refers to as trading range.
The underlying mentioned tricks help you to recognize the Forex short-term entry points by identifying the twist and turns of the trades and enable the traders to save your profits with the trailing stop orders and right time exit is also possible to save from losses.
Setting-up of Trades:
To set up a trade trader should use a strategy of comparing the Forex charts comprising details of two different time like one is of 5-minute Forex chart and other one is of 2-hour chart and side-by-side technical indicators like 100 moving average and stochastic study would prove to be beneficial.
Identification of Forex trend:
By comparative study of two Forex charts trader can identify the existing trends because trend start developing when the price action of currency pair consistently reside above or below the moving averages on both the charts.
Forex short-term entry:
As soon as the trader recognized the trends analyze whether it meets the following two conditions or not on both the Forex charts considered for Forex analysis purpose.
• Price action of the currency should not be more than 20-pips higher (to go long) or 20-pips lower (to go short) in accordance to the MA.
• Check whether the fast Stochastic trend overrides above the slow stochastic below 20 to go long, or crosses below the slow stochastic above 80 to go short.
Move with the Forex trend:
Once entered into the Forex trading trend just find the right timing to place the trailing stop order depending upon your trade move that is whether you have decide to go long or go short of your currency pairs.
On Short trade position, place the stop order of 10 pips higher than the moving average so that you can lower down the stop because trade will move in to your favor.
On Long trade position, stop order should be placed of 10 pips lower than the 200-period moving averages so that you can raise the stop and turn the trade into your favor.
This is all about the Forex trading trick that would work in the short-term trading type and explaining the type of trade orders that can be placed over your trade moves so that you can easily turn your trades into your favor.