Three most common types of trading technique followed by professional trader

Posted by Armstrong Louis on February 14th, 2017

There are many different trading style and strategy in the forex market. If you are relatively new in forex trading then you must find it hard to choose the right trading strategy in the forex market. If you talk to the novice trader then you will be surprised to see that most of them don’t know the most commonly used trading strategy in the forex market. In order to make a decent profit out of trading the financial instrument in the world, it is extremely important that you know the most popular forms trading technique. If you are relatively new then it will be a little bit hard for you to absorb lots of information at a time. But if you have strong determination, devotion, and dedication than over the period of time you will know which system works best in the forex market. As a trader, you should develop a strong basic in the financial market and learn how to trade the different market conditions in the world. In this article, we will discuss the three most common form of trading technique.

Price action trading strategy: If you want to grow your forex trading account then it’s highly imperative that you follow the price action trading strategy in the market. Price action trading strategy is based on the raw price data in the market. The professional traders trade the key support and resistance level along with price action confirmation signal. Most of the retail traders make a common mistake while trading the support and resistance level along price action signal. They simply trade the lower time frame in the market which is extremely dangerous and not reliable. If you look at the professional traders than you will notice that all of them are using price action trading strategy in the higher time frame. Trading the higher time frame in the market has its own unique advantage. Most of the time the false signals and spikes are generated in the lower time frame so if you trade the higher time frame in the market than you will higher chance to trade the best setups in the market.

Trend trading strategy: Trend trading strategy is one of the most favorite trading strategies among the professional traders. If you look at the highly successful traders in the forex market then you will notice that all of them are trading in favor of the long-term prevailing trend in the market. There is saying in the forex market that trend is your friend. So as a trader you should always trade in favor of the long-term prevailing trend in the market. When you draw the trend line make sure you use at least three connecting points since it takes three points to draw a valid trend line in the market. If you look at the forex trading account of the professional trader then you will notice that every single trade they execute in the market is in favor of the long-term prevailing trend. Due to the recent technological advancement, you will have the access to wide range of trading assets in the market. So if you don’t find any prevailing trend in the market in any certain assets than try for other currency pairs or assets in the market. But always make sure to trade in favor of the prevailing trend.

Support and resistance trading: Support and resistance level is the most important element for the professional trader. When the price hits a support zone in the market it rallies higher and when it faces a resistance level in drops in the market. In the eyes of trained professional support and resistance level trading is one of the most powerful trading strategies in the forex market. If you know how to trade the support and resistance level properly then you will see that your forex trading account is growing at a steady pace. Most of the novice traders in the forex market fails to achieve success in the financial industry since they don’t know how to draw the support and resistance level properly. As a full-time trader, you must draw the support and resistance level in the higher time frame. If you draw them in the smaller time frame than chances are very high that those level will be broken by the price in the market. If you know the price action trading strategy then trying to trade the key support and resistance level with price action confirmation signals in the market.

In Summary, There are many different types of trading strategy in the forex market. If you are relatively new then please not the above three mention trading strategy since these are the most widely used system by the professional traders. If you learn this three types of the system then you will be able to execute high-quality trades in the market. But before you execute any trades in the market always use perfect risk management factors.