Following the Forex Trends: The Major Advantages and Disadvantages
Though forex trend, as easy as it sounds may be difficult to study if you don't know how price moves. That is the basis of making money on the internet, trading forex especially trading with price action. All successful traders know the importance of a trending market. In this article, I will quickly analyze what I see as major advantages and disadvantages of forex trend so that it can help you in your trading.
First of all, the major advantages I found in trending market are that there are lots of traders who trade without the use of a single indicator. I have seen a veteran who trade only on trending candle sticks pattern. He knows when the market is flat, when it is trending up or down. Those that are using it successfully don't cluster their platforms with many indicators that will always confuse them. Before the existence of internet, many good traders that trade on stocks uses this pattern and it always work for them. Another advantage of trading with a trending market is that a lot of traders react to new trend. The higher the number of traders that can spot trend, the higher the winning rates of those who follow them. Many big players like financial institutions and banks create the trend, they use it to make more money and many retail traders join them. Even if you make a mistake following the trend, the market has a way of correcting you and getting you back to the market positively.
But one of the major disadvantages of a trending market is to know when to enter a market or when to get out. That is why many lagging indicators come in. Many so called who are not a programmer are now writing programs and EA that they never use to trade but still sell them to the baby traders. Even using simple fibonacci tools with just candle sticks pattern can change your trading account positively.
You may need to know what can trigger the price negatively and positively. This is where many traders get it wrong. Many traders lose not because they don't know the trend, but they don't know how to put their stop loss and take profit properly.
But the good news is that SPAT Forex trading strategies is one of the best strategies out there with less indicators and software that automate price action to make huge pips monthly. It filters the trend easily there by reducing your loss rate. It is based on momentum, market strength, price action and trend. It has very high winning rates.