Chart pattern trading method has always provided a big profit-taking opportunity to retail traders. Being new to this market, you might think learning to master the chart pattern trading technique is a very tough task. Though it’s true to a certain extent, you can still learn things by following some advanced guidelines. If you take proper precautions in the learning stage, you will never suffer from the chart pattern trading technique. You will become a profitable trader within a short time and learn to deal with your losses in a better way.
In this post, we are going to share some amazing techniques by which you can become a profitable chart pattern trader. Follow the tips mentioned in this article as it will help to make more money in the retail trading industry.
Trade-in a higher time frame
You should not be using the major chart patterns to trade in the lower time frame. Patterns identified in the lower time frame are not that accurate and it often misleads the retail traders. To be on the safe side of trading, we strongly recommend that you use the major chart patterns to trade in the 4 hour or the daily charts only. As you become skilled in analyzing the major chart patterns in a higher time frame, you will become extremely skilled with your actions and thus you will also learn to take the trades with strong confidence.
Identifying the breakouts
The majority of the retail traders suffers to identify the major breakouts while trading the chart patterns. To eliminate the breakout-related problems, the top traders at Saxo Bank group uses the price action trading strategy. We strongly recommend that you learn to analyze the price action confirmation signals to find the best possible trade setups in the market. Once you become good at analyzing the price action confirmation signal, you can deal with the major breakouts with a high level of precision. Never expect that you will be a skilled trader without learning new things. You may use the demo trading account to build your skills but do not lose hope after losing a few trades.
Learn to analyze the news
Chart pattern traders should always analyze the major news. Without learning to analyze the news event they will never be certain that the breakout will take place. Learning about the news event might seem a tough task but once you go through the economic calendar, everything will start to make sense. Instead of taking the trades randomly, try to merge the technical and fundamental data. Once you become good at that, you can easily earn a decent amount of profit without having much hassle. Always remember, news factors are considered as the prime price driving catalyst. By ignoring these factors, you are just making things worse in the trading profession.
Lower down the risk factors
Smart chart pattern traders never trade the market with high risk. They keep on using simple risk management rules as they know the outcomes are unpredictable. As long as you trade the market with a very low-risk exposure, you should be able to earn much more money in the trading industry. Thus you will become much more secure n your trading profession. Some people often increase the risk factors after gaining confidence with the chart pattern trading method. The increased risk factors often make their trading career much worse.
To be on the safe side of trading, we strongly recommend the retail traders not risk more than 2% in any trade. Follow the safety protocol in the trading profession and you will not suffer big losses. Keep on learning new things about the chart pattern trading technique as it will help you to find the best possible trades in the market. Last but not the least, never become biased and trade this market with emotions.