Best forex trading strategy for beginners
June 28, 2018 (Investorideas.com Newswire)
How crucial is strategy to beginners?
There is a lot to learn about the forex market in order to become the best trader you can be. Not having the proper knowledge and learning tools will almost certainly lead to a subpar experience for new traders. Even having access to all the information can feel overwhelming without proper guidance. Fortunately for you, there are many good forex brokers that want to educate and support their traders. Top forex brokers like S2Trade.com offer all the tools you need to get your trading career started, from feature-rich platforms to personal account managers and training sessions. All of these features are great for beginners and expert traders alike, but there is one thing that will drastically improve your trading capabilities and give you an edge over the other traders: a reliable, tried and tested strategy. Below you will find what the best trading strategy for fresh traders is, in our opinion, support & resistance.
What is Support & Resistance?
Support and resistance is a strategy that can be very efficient when applied correctly, that’s why it is our number one recommendation when referring to beginner strategies. Support and resistance levels are represented by horizontal price levels on a chart that connect price bar highs to other price bar highs and lows to lows, allowing traders to predict future market movement.
A support or resistance level is created when a market’s price action reverses by changing its direction and leaves behind a peak or swing point on the chart. Support & resistance levels carve out trading ranges and can be seen in trending markets as the market traces behind swing points. The price movement will usually be contained by the support and resistance levels for a period of time, until the price breaks through its trading range. The trading range is described as the area of price movement contained between parallel support level and resistance level. When the price breaks up and above the trading range, it moves above the resistance level. When it comes back down and successfully tests the resistance level by holding above it, it will now act as support.
Support & resistance levels can also be created from swing points in a trend. Because market trends retrace back, the charts will show swing points in the market. The swing points look like a peak in an uptrend and like a trough in a downtrend. In uptrends, old peaks can often act as support after the price breaks up and retraces back to test them. The opposite is true in a downtrend, with old troughs usually acting as resistance after the price breaks down and retraces upwards to test them. Traders can analyse entry points into a trend as it tests support & resistance levels, as they will often hold price. This is where how strategy creates its low-risk / high-reward potential.
When a price action entry signal forms at a key level of support or resistance, it will often create a high probability entry case. You can place your stop loss according to the key level and because of the high chance of it being a turning point, key levels of support and resistance often offer a great risk-reward ratio.
Because of its simplicity and risk-reward ratio, the best rated brokers will always recommend this strategy to fresh traders. Applying support & resistance can also be a good way to practice and sharpen your predictions on the forex market without the fear of losing too much. With much to gain and little to lose, it is clear why this strategy is so popular.
Knowledge is everything. Almost.
We can all agree that trading forex is all about accumulating knowledge and understanding as much as possible about the markets. Having so much information available can feel overwhelming, but there are many reliable brokers that can guide you on your path to financial success. There are good deals of tools you can use to overcome the forex markets, and having the wisdom of great strategies at your side is the best way to start your trading adventure. Don’t hesitate to get in touch with great forex companies that will offer you the edge you need to conquer the markets!
About the Author:
Nick Parson is a leading finance expert with a huge trading experience. He is glad to share his knowledge with the audience.
For more information you can contact - https://www.s2trade.com/contact-us/ or via phone +442036775478
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