Monday, September 4, 2017

When is the right time to buy and sell?

The above questions often haunt the trader’s mind when looking at the market price movements once the MT4 platform is open. This problem occurs when a trader cannot understand the use of multi-time frames to make the right decision. Traditionally many traders are affected by price movements in small time-frame when they want to make a buy or sell decision.

Actually, the price movements in the big time-frame that start from H4, Daily, Weekly and Monthly are very strong and clear moves. Any decision made only by smaller time-frames will cause traders to be trapped by the current price movements and will usually cause them losses.

Therefore, before any decision to buy or sell is made, traders need to refer to a larger time-frame first to determine whether the major market trend for the pair is. Once it's clearly seen and along with some other big-time frames, then the decision to buy or sell is made in a smaller time-frame. This condition is very important to ensure that every entry made does not result in a high floating rate that affects the percentage of permitted margin.

Floating occurs normally due to the spread value set by the broker and plus the accuracy of entry done. If the entry is done early, then the price will then make a retracement before it returns to the actual market direction.

In conclusion, to enter buy or sell the traders need to determine the market trend first. Then the provisions for the entry need to be made at smaller time-frames to avoid floating rates that are too high during market retracement. All of these must necessarily comply with the right money management techniques and do not expect take profit value which is too high compared to the amount of capital at stake. The success of this forex trading depends largely on capital, money management and the traders' emotions.