The most patient traders may choose position trading, which is less concerned with short-term market fluctuations and instead focuses on the longer term, holding the position for several weeks, months, or even years. For example, they may notice that a specific currency pair tends to rebound from a particular support or resistance level.
When applied to the FX market, for example, you will find the trading range for the session often takes place between the pivot point and the first support and resistance levels. If your trading strategies don't address trade selection, open position management, and risk exposure, then they probably aren't worth their weight in salt. If the price breaks higher from a previously defined level of resistance on a chart, the trader may buy with the expectation that the currency will continue to move higher.
In addition, it can be used by range-bound traders to identify points of entry, while trend and breakout traders can use pivot points to locate key levels that need to break for a move to count as a breakout. From precious metals to energy products, commodity values regularly influence the wealth and currencies of many countries.
If you use it in combination with confirming signals, it works really well. However, a crucial consideration for those who might use the price action strategy is that it's very subjective, so while one trader might see an uptrend, another might predict a potential turnaround for that particular forex pair, or that time period. An indecision candle in a bullish preceding trend indicates that buyers are possibly losing control, and sellers may be gaining control.
When it comes to addressing U.S. employment, Non-Farm Payrolls (NFP) is the go-to metric for currency traders around the globe. Price action has a tendency to become super-charged following its release, as trader participation and order flow increases exponentially. Selecting the Market : Traders must determine what currency pairs they trade and become experts at reading those currency pairs.
Forex trading strategies that work