Trade Forex Trading

Learn Forex Trend Reversal Strategies - Counter Trend

A trader needs to create a plan that they follow when trading in the trading market. A person must have the self-control to always stick to the trading plan. That's why it's better to make plans that are simple - successful systems will be much easier to follow and stay with. This is because a-trader knows that by following the trading rules of their trade system, they'll do well.

A carefully designed strategy that has been back-tested and proven to generate profitable trading results is one of the factors and aspects to becoming successful when trading the market. This type of strategy will make it easier for the forex trader to follow the system rules of their trading strategy because already they know the strategy is profitable, henceforth keeping up the discipline needed and required to continue following the trading strategy will be much easier.

Effective trading blueprints must likewise incorporate:

1.Money management rules

2.Forex Psychology Mindset

These two things will really help make any system better.

Prior to delving further into guidelines for monetary management and forex market psychology, let's first examine the price action strategy.

Counter Trend Strategies

Counter-trend strategies are optimally deployed to enter trades near major resistance and support levels, areas where price action is statistically more likely to reverse. These are the boundaries that the price has previously failed to breach.

This strategy isn't the top forex approach. Catching tops or bottoms can fail, as trends may last longer than expected.

This trading strategy should therefore only be used to trade currencies that rarely trend - these are the currencies that move in a tight range. Traders can draw support & resistance levels of the price range and they'll then use these levels to open trades - traders will open buy trade transactions at the support zone & traders will open sell trade transactions at the resistance level. For a choppy(range bound) market the prices will keep bouncing off these points and the forex traders will open trades & keep trading these price bounces.

Strategies Tips

Once someone has created a trading strategy, they should also include these things to make their trading strategy more successful.

1. Guidelines for Equity Management

2.Forex Psychology

Capital Management Guidelines

Money management rules should be part of your forex strategy - the rules will help you as a trader to manage risk. This means that you'll use 2 rules of money management - these are risk:reward ratio & drawdown reducing method when setting your forex trades to identify the lot size that you'll open in the market. The most popular equity management rule used in forex & the one which you should also add to your trading plan is the rule which says a forex trader should never risk more than 2% of their account balance on any one trade.

To learn more about these two equity management rules, traders should consult the money management guide found in the learn forex lessons section of this site, under key concepts courses.

FX Psychology Mindset

In order for one to become successful when trading the markets a trader has to learn about market psychology. The forex psychology or mindset that is required to become successful in forex is one that avoids the emotions of fear and greed while trading the market & is a mindset of total discipline that one will follow all their rules & their forex strategy and only trade with signals which are generated by their forex strategy. With discipline one will not trade unless their trading strategy generates a signal. A trader will have the mindset of only following their trade system 100 percent all the time without second guessing the trading system. A disciplined trader will also not place trades in the market just because the currency market has started to move up-wards or downwards, instead a trader will wait for a signal to trade to be derived and generated by their forex strategy.

To gain insights into trading psychology and emotional management in the online forex market, traders can explore the psychology tutorials available in the learn forex lessons section of this site, specifically under the key concepts courses.

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