Technical analysis is the foundation of a trader. The currency trader should master this technique as early as possible or else they will keep on losing money in the retail trading industry. To become good at trading, you should follow some basic rules and take the trades in a very standard way. Never expect to make big money by trading the market with emotions. People who are taking their trades based on emotions are losing money most of the time. They become frustrated with their actions eventually blame the market.
To become a dominant trader in the retail trading industry, you need to go through some critical steps. In this article, we will show you the exact steps by which you can learn technical analysis without losing any money.
Monitor the Market
Before you start learning anything technical in the trading profession, you should monitor the market for one week. By doing so, you will have many questions in your mind. Some of the questions will not make sense. But this is normal. Note down your quires as you will get all these answers while learning the technical details of this market. But do not get addicted to this market or stare at the trading platform all day long. You should systematically do this.
Support and Resistance
The basics of technical analysis are based on support and resistance level. A support level pushes the price of an asset to the north and the resistance level pushes the price down. As a trader, you should be looking for the support level to buy an asset. On the contrary, if you wish to sell the asset, you should be doing that at the major resistance levels only. And try to find the support and resistance level in the higher time frame to avoid a false reading. Once you become good at analyzing these levels, you will realize how forex trading works. And this will help you to build strong confidence.
Nature of the Trend
As a currency trader, you should also learn about the nature of the trend. Just by finding the direction of the trend is not enough. To find profitable trade signals in the market, you should be relying on long-term goals and develop the ability to assess the strength and weaknesses of a trend. For that, you may have to use technical indicators. At the initial stage, use the moving average as it is very easy to understand. If the slope of the moving average is very aggressive, consider the trend as strong. On the contrary, if the slope is relative zero, you should consider the market is in the ranging phase.
Practice in a Demo Account
Now you have the basics of trading. But to trade the market like a professional trader, you should be focusing on a demo account. Without having access to the demo trading account, it will be a very big challenge to overcome the major obstacles at trading. You may think you have a lot to learn about this market but this is not all true. Use the basics of support and resistance level and try to develop a professional trading strategy. Once you create the draft trading system, you should back-test your performance with real money.
Analyzing the Chart Pattern
As you study the basics of the technical factors, you may start learning about the major chart patterns. By using the chart pattern you can find the massive price movement of the trading instrument with a great level of ease. Moreover, you can also find the major reversal in the market. But at the initial stage, we strongly recommend that you stick to the trend trading method only. Once you master this technique, you may rely on the reversal chart pattern. But make sure you use the candlestick pattern and proper risk management technique. You may have extensive skills in the technology sector, yet you might have to deal with the losses. So, it is better to be prepared to deal with the losses.