Chart patterns are quite often the first introudction new traders have to the financial markets. This brings a degree of familiarity and a comfort level to the trader. Triangles, rectangles, wedges, channels, double bottoms and tops, head and shoulders and many more are the first glimpse of what trading charts contain. Chart patterns are an excellent way to learn the markets and trust the movements in the markets and identifying perhaps the direction of the market and areas of reversal.
Fundamental traders may disagree with what I am about to say below but I strongly believe that many times news is already factored into the price. Price contains a lot of information and in most cases more than most traders actually realize.
As a dynamic trader I am always willing to go with the flow of the market. That means I will follow the trend of a market unless I have very good reason not to. Trend following holds the most advantages and price within a trend gives excellent indications. Many traders will fail to follow a trend and decide to fight the trend to make small amounts of profits for massive amounts of stress.
If you follow the trend, chart patterns, support / resistance then your trading is on it's way to being profitable.
Over the years I have seen Javid develop some excellent strategies for identifying trends and I use to aid me in my trades but trend direction is probably the hardest to identify. Next week I will share a basic strategy to identify trends.
Click here for today's forex analysis.
Daily Pivot Points can be found here.
Good trading
FX Analyst
Anne Chapman
