This Forex trading tutorial video demonstrates big mistakes that beginners and even more advanced Forex traders make in trend trading currencies.
To become a successful trading, you must learn Forex trading step by step from home with a great Forex training course, this this lesson will help you avoid pitfalls that even well trained traders fall into.
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Welcome to this Forex trading tutorial. Actually this lesson I’m showing you on Forex applies equally to stocks, commodities and futures. Whatever anything you can trade.
Trend is often defined as higher highs and higher lows. That is incorrect. Why is that not a trend? The dictionary definition of trend is “the extended general direction.” Therefore that means a long term move. Whatever you decide to use for measuring trend whatever tool you decide to use it has to measure the long term move. Otherwise it’s not measuring trend.
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The fact that trend is always a long term move that then therefore makes it always a lagging indicator because before you can determine whether you have a trend or imagining did a lot of data and once you have a lot of data and it plots it and it’s confirmed well guess what.
A lot of professional trend traders who make money trend trading often have a worse than 50/50 win loss ratio that they make money because they make up for it with an excellent reward to risk/ratio because they’re really good at keeping the losses small and letting their winners run. For me to be comfortable trading, I have to have a better than 50/50 win loss ratio.
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I have to use other things too. Nothing leads the market all the time. In trading, we’re not predicting the future really, but mathematically there are times when you can determine the short term move in the market before it shows up on price
This isn’t just just about the long term direction. Higher highs and lower highs only measure short term direction. So we have here a lower low.
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And so a lot of people would say okay well even if it’s not a long term trend at least it’s a downward indication because you have a lower low and therefore that is a bearish pattern. Again wrong!.
That is a short term bullish pattern. And the reason is because with trading, the devil is often in the details one.
I’m just going to tell you what it actually means mathematically and also from a market profile perspective which is based on the auction theory which I agree with 100 percent by the way. This Candlestick here means that yes the market during this period of time and this is a daily chart. So during this day the market did make a lower low but it opened and closed up here. So the overall sentiment that day after all is said and done during that day the market participants said you know what we tried these prices down here.
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BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at Barry@TopDogTrading.com, and I’ll show you how to get access to that indicator.
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