Once you start to understand the profit factors in trading, you get attracted to complex forms of market analysis. Things like the key swings and different kinds of trends need to be used to analyze the market data. At that level, the indicators of the trend lines and support and resistance levels will be used. After that, a semi advance tier section should be your concern. You have to learn about the moving average. This is nothing but the average of a certain number candlestick in the charts. You will get simple waves based on the calculations and the prices. It is good for understanding the volatility of the markets. However, there is a need to improve the analytical processes with the help of a demo account.
Many retail traders in Hong Kong have developed their skills by using demo accounts. So don’t feel frustrated in the learning stage. Consider the demo account as your learning ground and try to create a perfect trading plan. Once you manage to make a consistent profit using the basic tools, start using your real money to trade the market.
Using Bollinger bands for analysis
The thing we are going to talk about in this article is already clear in the sub-header. It is the Bollinger band and this is the thing which you need to understand properly. It is the same process of representing the volatility of the markets. The only difference is that you are going to take the opening and closing prices of a certain number of period back and calculate in the same way as moving average. From there, you will be able to see something like an oscillator range which will be causing the main signal to fluctuate. Based on that, you need to analyze the signals of a certain market.
Make sure you use the higher time frame to place the trades in the Forex trading account. Assume the overall trend is bullish. So, try to look for long trade setups in the Bollinger band support level and ignore the short signals. Try to trade with the major trend since it will make things easier. If possible focus on the fundamental details of this market and you will eventually get better at trading. Never forget the fact that the Bollinger band is nothing but an indicator. Be sure to use other essential tools to improve your win rate in trading. Focus on money management techniques to save your investment.
Order the trades with proper plans
Let’s learn the basics execution process using the Bollinger bands. Without even reading this segment, you can think about only one concept. From the upper band, you will get the potential of short order. For that, you have to rely on the resistance levels. On the other hand, the long orders will be coming from the support levels. That will be notified from the lower band. Using these two basic concepts you can always make a trade. But it will be for a short term of course. Because it is not right for the long term trading approaches. Oscillators like RSI and stochastic should be used with this tools to deal with short term data.
Consider the supports and resistance
Just like with the execution process, you need to think about the setups for closing. As we are talking about scalping or day trading, it is very important for you to depend heavily on the closing