Forex Trading : Making a Quick Profit in Currency Trading
There are many methods to choose from in making money in forex trading. But the very best available in making the most money in the least amount of time is the one enclosed. The best thing about it is that anyone can understand how it works and in doing so make huge profits in using it.
Many traders are of the opinion that the way to successful currency trading is to determine in which direction currencies will trend. This of course is pure guesswork and it is impossible to predict how traders worldwide will react in advance to a given situation. Trying to pick a low in such circumstances is virtually impossible and will result in failure.
To obtain the best results in forex trading requires taking a high odds position of a confirmed developing trend. Look at any forex chart, it is obvious that all bull market trends start by breaking through overhead resistance and in doing so continue to hit new highs, as the trend continues to develop and break out to new levels, you will need to buy breakouts in order to benefit.
Strong levels of resistance that have been tested previously and held is a good indicator of an imminent breakout. The more times a level holds before the break the stronger the sustainability of the break when it occurs. This is the key to buying breakouts.
An indicator is that of a minimum of six tests or more with at least two of them six weeks apart. The more a level is tested and the wider apart they are on the chart in terms of time will indicate the strength of the breakout and the direction in which it will take.
It is essential to develop a fiscal policy that suits you when forex trading. Set a limit on what you are prepared to lose. This is known as your stop loss order. Irrespective of what other traders might advise, you will gain relative peace of mind if you set your stop loss order. It should be positioned behind a prior swing of high or swing low. By closely adhering to your stop loss limit you will be practicing good money management and limit your potential losses.
A low risk and high reward strategy of trading will be achieved by putting your stops just below the resistance level which has broken and now acts as support. By hitting high odds breakouts only and using this method, you will be able to make triple digit profits in just a half hour of trading a few times a month.