The retail traders are always looking for a professional trading system to deal with the complex nature of this market. They are even willing to spend thousands of dollars to buy simple and effective trading system. But do you really think that you can make money by using other people trading strategy? Every trader has a different personality. You have to consider the personality while developing the trading system. So if you follow other people trading strategy, you will always make mistake and place emotional trades. You have to consider the long-term scenario of the market. Try to create such a unique system which will help you to trade the key support and resistance level. Now we will discuss four important parameters which will help you trade the key support and resistance level with the high level of accuracy.
The daily and weekly timeframe
Trading the lower time frame is always very challenging. It will give you too many trading signals and being a new trader it will be really hard for you to filter out the best trades. However, if you trade the daily or weekly time frame, you don’t have to filter the false trade setup. Most of the time the market gives very accurate trade setups in the higher time frame. Try to become a long-term trader and avoid aggressive trading strategy. The long-term Forex trader always trades the market with the conservative system since it allows them to minimize their risk exposure to a great extent. To trade such higher time frame, you must develop strong patience. Without having patience, you will start overtrading the market which will eventually ruin your trading career. Psychology plays a great role in your trading success. Try to achieve stable mentality while trading the live markets.
Use the chart patterns
Trading the key support and resistance level is extremely easy. However, when it comes to the high level of market volatility things are extremely difficult. So how do you deal with such market conditions? The experienced professional’s uses chart patterns to trade the key support and resistance level of the market. When you trade the key support and resistance level by using different chart patterns, make sure you are not risking more than 2% of your account balance. Managing your losing orders is the most important element in currency trading profession. You might have some big winners by taking a huge risk but eventually, this will force you to overtrade the market. Being a chart pattern trader, focus on the long-term market trend. If you look for reversal trading, make sure you have assessed the fundamental factors of the market. Try to use technical and fundamental analysis to find the best trades in favor of the market trend.
Use the Japanese candlestick pattern
The use of Japanese candlestick pattern is known as price action trading strategy. This system will help you to execute high-quality trades at the key support and resistance level. The retail traders often get confused by seeing too many price action confirmation signals but this is very normal. Instead of focusing on all major candlestick pattern, try to trade the market by using the most reliable signals. Limit your risk exposure by reducing your lot size. Learn to scale out from your profitable trades since it’s the best way to book a certain portion of your profit.
Simple moving average
The use simple moving average is very easy and many professional traders use the 100 and 200-day simple moving average to find the dynamic support and resistance levels of the market. When you start using the 100 and 200 SMAs make sure you are using it in the daily or 4-hour time frame. If you use it in the lower time frame, you will never get any accurate trading signals.