How to ride the major trend like a pro trader
Professional traders love to trade with the major trend. They know it is by far the most effective way to make a profit in the trading business. If you want to make progress in your life, we strongly recommend that you learn to deal with the important market dynamics in a strategic way. Try to evaluate the critical market data and draw the trend line effectively. Once you learn to ride the trend with high-level precision, you should be able to earn much more profit.
Learning to ride the trend is a very challenging task. Unless you follow a safe protocol, you will be failing to find the perfect trade signals in the market. Go through this article as we are going to give you some advanced tips which will help you to ride the major trend like a professional trader.
Selecting the trading instrument
To trade with the major trend, you should select the trading instrument with a great level of care. Most of the traders fail to do the market analysis in a systematic way since they don’t have the skills to deal with the important market details in a strategic way. They take the random trades in different instruments and loses a significant portion of their capital. On the contrary, professional traders take their trade with a valid trading strategy and they look for the trade signals in the major currency pairs. Thus making a profit becomes much easier as the major asset tends to stay in a trend.
Drawing the trend line
To ride the trend, you must learn to draw the trend line like the professional traders at Saxo Hong Kong. A valid trend line should have three connecting points. Unless your trend line has three connecting points, you are doing the data analysis in the wrong way. Once you are certain the trend line which you have drawn is perfect, you need to wait for the retracement phase. Once the price hits the major trend line, you should look for the price action confirmation signals. Based on the price action confirmation signal, you can ride the major trend with a high level of accuracy.
Using the Fibonacci retracement tools
At times it becomes hard for the retail traders to draw the trend line in the market. In such a state, the traders should use the Fibonacci retracement tools. With the help of the Fibonacci retracement tools, they can find the critical retracement levels. These levels are going to act as the major support and resistance level. Once the price hits the resistance or a support level, you should be looking for reliable candlestick patterns. Based on the Japanese candlestick pattern, you should be taking the trades in the market.
Use the moving average
To ride the trend, you may use the 100 or 200-period moving average. These moving averages act as the dynamic support and resistance level. You might be thinking that taking the trades based on the 100 and 200 moving average is a very tough task. But if you take some smart steps, you should be able to reduce the risk and find some reliable trade signals. Once the price tests the moving average, you should check its slope and the formation of the candlestick pattern. If the candlestick pattern gives you a trade signal, you may take the trades with great confidence.
Avoiding trading the news hours
At times you will notice the price is testing the major trend line right before the high impact news. In such market conditions, you should avoid taking the trades. If you take the trades in such market conditions, you might have to lose money due to major trend changes. It might take a while to understand the impact of fundamental news. Till you master this technique it will be better to avoid the news data during the trade execution process.