How to enter Forex trading
This article is an educational guest post. It was written by Mark McDonnell, the owner of the Byexwarning.
In this article, we will give forex traders a comprehensive guide on how to enter and manage forex trades across 8 currencies and 28 currency pairs.
We will show forex traders how to identify new or existing trends on the higher, H4 and larger time frames. We will also show traders how to assess the pip potential of each trade, give them professional alertyes and reporting systems, and explain how to verify business entry. Then, we will show traders how to manage trading with trailing stops, trailing stops, and scaling lots.
Identify the main trend
Merchants can configure some simple trend indicators through the various time frames on your charting system. Then, use the principles of multi-time frame analysis to determine which pairs are trending or which pairs might be starting new trends. An example of these trend indicators is found in the following image.
Traders should always group their trend indicators by individual currency. For example, all JPY pairs should be set up next to each other to verify that they are all moving in the same direction. This can be repeated for the 8 major currencies, such as USD, CAD, EUR, CHF, GBP, AUD and NZD pairs, in 28 pairs.
Then check the H4 and higher time frames in each currency group to see which pairs are trending up or down. Look especially for pairs that are starting new trend cycles.
The forex market can move any time it is open. But most of the high-quality entries, around 80% or more, occur in the main trading session. Since the market is open 24 hours, traders should maximize their hours and know more exact times to check the market for a potential trade entry. In that sense, the alert system you use can make or break your trading calendar.
A professional trading system needs several alert systems. We suggest the world economic calendar, audible price alerts, email price alerts, a currency strength mobile app for your desktop and mobile notificationsa desktop market scanner and manual observation at intervals in the main trading session. here are some professional forex alert systems They are available to traders to notify them when the market is moving.
Business Entry Verification
When alert systems notify you that the market as a whole or in particular group of couples could be movingmerchants must verify their trade entry. For trade verification, we use The Forex ® heat map, which is a visual map of the forex market that gives live buy and sell signals. You can see Two examples from the heat map below in the example trade tickets. Traders should also check support or resistance levels and goals. For example, if you see a buy signal on the heat map for a particular pair, and there is at least 100 pips potential for the next resistance area, then this is a valid trade. We use 100-125 pips of potential on most trade entries, so the risk-reward ratio is excellent, at least 4:1 positive.
Trade Entry Example
now we will show Two examples trade tickets for two different pairs. The exact same procedures can be used for 28 pairs when buying or selling..
A trader receives an alert from one of the listed alert systems that the AUD is weak or the AUD/USD price is falling, i.e. price breach or mobile app notification. Check the trend and heat map signals to see if a trade is possible. First, check that the AUD/USD is trending down on the D1 time frame and has no support levels nearby for at least 150 pips. Then check the signals on The Forex Heatmap ® to spot AUD weakness or USD strength. The AUD is consistently weak and you sell the AUD/USD. In this case, you are using the smaller time frames and the heat map to enter the sell on the larger D1 time frame, which is trending down.
This is the live heat map signal and the M15 time frame, showing a 75 pip drop in the AUD/USD. With these types of signals, it was also possible to trade other AUD pairs, such as selling AUD/CHF or AUD/JPY.
Second Example Trade
In the second example, a trader receives an automated alert that the JPY is weak on his cell phone. They check the market and the charts and buy one or more of the JPY pairs. Again, the heatmap signals are strong and consistent. In this case, the trader has set up his charts to see all of the JPY pairs on a screen which we highly recommend to all traders.
In this case, The Forex Heatmap® live trading signals match the chart settings. This is a very powerful way of trading and the most profitable way for forex traders to set up their charts. Also, if you are using a funded trading account, you will minimize the drawdown using this technique. The JPY pairs moved a combined 900 pips on this day.
If the AUD/USD is in a downtrend on the H4 or larger time frame, the trader can scale lots and move the stop to breakeven, then manage the trade by scaling lots as it continues lower. Conversely, if the AUD/USD is trending higher on the higher time frames, the trader can exit all lots and manage the trade as a short sell intraday trade or day trade. Similarly. If the JPY pairs are trending up at least on the H4 time frame, you can scale lots you traded on and move your stop to break even for more pips based on trend.
Summary and conclusions of how to enter operations in Forex
This article presents a complete strategy for entering and managing trades on 28 pairs. Traders now have trend indicators, entry management tools, professional alert systems such as push alerts, and knowledge to successfully manage operations. More details about this trading system are available on the Forexearlywarning website.