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4 Essential Things That Every Trader Should Learn

20 January 2018 No Comment

There are thousands of trading parameters which you need to learn as a full-time trader. Trading is not a get rich quick scheme, where you will fund your trading account and change your life within a short period of time. All the successful traders in the United Kingdom consider trading as their business and they are not willing to take a huge risk for bigger profit. As a full-time trader, you have to understand the fact that trading is all about probability. You never know which trade will hit the potential stop loss or take profit level. So it’s always better to be prepared for the worst-case scenario. If you don’t learn to embrace the losing trades, you will never become a successful trader. In today’s article, we will discuss four essential things that every trader should learn.

Fundamental analysis

Fundamental analysis is one of the key ingredients to doing the perfect market analysis. Without learning it you will never understand the market dynamics. The fundamental data will help you to understand the strength of a certain currency pair or financial instrument. But since it deals with lots of economic factors many rookie traders often ignore it. But by ignoring this factor you are actually becoming more vulnerable to losing trades. You need to work hard to increase your accuracy level in Forex trading industry. We will now give you a clear example how the fundamental factors will help you.

Let’s say that EURUSD pair is trending up for the five consecutive months which means the overall market trend is extremely bullish. But all of sudden the FED has hiked their interest rate on the basis of 50 points. So, do think that market trend will remain bullish? The simple answer is NO. The EURUSD pair drops like a falling stone breaking all the major support levels of the market. So without learning the details about fundamental factors, it will be almost impossible for you to make a profit in such market.

Japanese Candlestick Pattern

Price action trading strategy is based on the formation of Japanese candlestick pattern. When you learn Forex trading, you have to learn about the different forms of the Japanese candlestick. It will help you to place high-quality trades at the key support and resistance level. Being a new trader, learning all the formation of Japanese candlestick will be a little bit hard. But if you understand the psychology behind the formation of such price action signal, everything will be crystal clear to you. So make sure that you have precise knowledge about price action confirmation signal since it is one of the best ways to trade the Forex market.

Chart Pattern Trading

Chart pattern trading is one of the best ways to catch the biggest movements of the market. But sadly most of the retail traders don’t learn about chart pattern trading. If you can master the art of chart pattern trading, you can easily trade the trend reversal of the market. But before you start learning the different chart patterns in Forex market you need to understand that you will have to trade the higher time frame data. Some retail traders often trade the lower time frame chart pattern but the results are not satisfactory. Most of the time, the pro traders use the daily and weekly time frame to trade the market with a major breakout of the chart pattern.

Risk Factors in Trading

Last but not the least never trade the market without following proper money management. You might have the best trading system in the world but this doesn’t make you immune to losing trades. The market structure is designed in such a unique way that no matter what you do, losing trades will follow you. So make sure that you are always trading with low-risk exposure t save your investment. Always aim for high-risk-reward trade setup to cover up your trading loss.

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