Forex trading is popular with both short-term and long-term traders. A majority of the short-term traders will almost inevitably gamble away most of their money at some point, whilst the more controlled long-term forex trader will often end up in the black. That's not always the case of course, but if you employ two technical indicators in particular, then it is a lot easier to achieve decent long-term profits.
The first indicator I want to talk about is the 200 day exponential moving average, or EMA(200) for short. This indicator is used by a lot of long-term traders because it gives you an instant impression of the long-term trend when applied to a daily price chart.
This is significant because you should always trade in the same direction as the overall trend. So for instance if the EMA(200) is sloping upwards then you should only be concentrating on opening long positions and if the EMA(200) is sloping downwards then you should obviously be looking to open short positions.
The second technical indicator you should use is the supertrend indicator. A lot of people won't be familiar with this indicator because it's not one of the core indicators. However it is definitely one of the most effective, and it is well worth spending a few minutes downloading it onto your charting platform if you don't already have it.
This indicator will also tell you which way you should be trading in much the same way as the EMA(200). If the indicator is currently green, then the price is in an upward trend and if it's currently red the price is currently trending downwards. So by glancing at this indicator on both the current time frame and the longer time frames if you want additional confirmation of the trend, you can instantly find out whether you should be looking to go long or short.
If you apply both the EMA(200) and the supertrend indicator to your daily charts they should enable you to make sure that you are always on the right side of the trend, which will therefore help you to be a consistently profitable trader. Of course you will probably want to use separate indicators such as RSI and stochastics, for instance, to pinpoint your exact entry and exit points.
However the overall message I want to get across is that if you are serious about becoming a highly profitable long-term forex trader, I would recommend you start off by using the two indicators that I've talked about in this article. Once you become accustomed to using them and are able to instantly recognize the trend, you can then start devising a trading method that will help you squeeze out some decent profits from trading this long-term trend.
Click here for more information about a forex course that will teach you all the basics of forex trading, and to read a full Forex Nitty Gritty review.
0 comments
Post a Comment