Finance

Most common mistakes in chart pattern trading 

Chart pattern trading is considered to be the most advanced form of trading the financial instrument in the world. There are many traders in the forex market who often trades the live assets by using the chart patterns only. If you live in Singapore then you can go for the forex trading account Singapore offered by Saxo since it has many advanced trading features. Most of the traders in Singapore are doing a great job in trading the live assets since they are trading with the most reputed brokers. If you truly want to choose a trading career in forex then make sure that you learn the basic of the forex market very precisely. In the eyes of trained professional chart pattern trading is considered to be the most advanced form of trading the market. In this article, we will learn the most common mistakes done in chart pattern trading.

Head and shoulder chart pattern: Most of the professional traders highly prefer this chart pattern since it is one of the most powerful bearish reversal signal in the market. If you go for forex trading account Singapore then you will look that most of the traders are trading the head and shoulder chart pattern to trade the bearish reversal signal in the market. But most of the novice traders fail to make a profit from trading the head and shoulder chart pattern since they trade without price action confirmation signal. So the very first thing that you need to identify the bearish price action signal in the market. Most of the novice traders fail to make money since they trade without any confirmation signal in the market. So make sure that your trade the pattern once the confirmation is printed on the chart.

Triangle chart pattern: Triangle chart pattern trading also very much popular in forex trading. Starting from the novice traders ending with the advanced traders all of them trade the triangle chart pattern in favor of the long-term prevailing trend in the market. Most of the time the breakout occurs in favor of the long-term prevailing trend and here the novice traders made their very first mistake. So when you trade the triangle chart pattern in the market make sure that you always trade in favor of the long-term prevailing trend in the market since this will greatly reduce your risk exposure in the market. But when you use forex trading account make sure that you trade with proper risk management factors.

Rectangle chart pattern: There are many traders in the forex market who loves to trade the rectangle chart pattern in the market. But most of the novice traders in the forex market trade the rectangle chart pattern without any price action confirmation signal. So if you trade without any price action confirmation signal then chances are very high that you won’t make any profit in forex trading while trading the chart pattern. Another thing that you need to make sure is to identify the long-term prevailing trend in the market. There is a well-known proverb in the forex market that the trend is your friend. So if you trend in favor of the long-term prevailing trend then you can greatly reduce your risk exposure in the market.

Summary: Chart pattern trading is one of the easiest and advanced ways of trading the live assets in the market. If you truly want to master the art of chart pattern trading then make sure that you use the price action confirmation signal in the market since it will greatly reduce the risk exposure in the market.

 

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Paul Petersen

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