The professional traders know how to deal with the trades. They never take emotional steps because they know it results in a big loss. To be on the safe side in trading, you have to focus on a few simple rules. For instance, people often ignore the default tools available on their trading platform. They buy expensive indicators and other EAs to trade the CFDs market. Such tools might be a great trade filter tool but considering the long term impact, they put a huge burden on traders.
As a CFD trader, you can focus on different kinds of market but today we will teach you how to take trades on the oil market by using the default tools. You can trade any commodity by effectively learning to use these tools.
Learn to find the end of correction
After an extended trending movement in the asset, the price of a certain asset always goes for correction. The professional traders take advantage of such correction and execute random trades in favor of the trend. Taking such trade is a very tough task and people don’t know how to deal with the complicated nature of the market. But with the help of the Fibonacci retracement tool, the professional oil traders find the exact ending point of the corrective movement. It allows them to take high-quality trades and improve their efficiency in the long run. So, learn to focus on the Fibonacci retracement tool and use the daily time frame to draw the critical levels. If you choose to deal with the lower time frame, it will be a tough task to make money in trading.
Use the trend line tool
Trend trading strategy is often the most neglected trading method among the CFD traders. But the top investors at the Saxo capital markets always encourage to trade with the trend. Study the historic price movement in the oil market and you will notice the price is always favoring the trend. Though deeper correction often takes place, it tends to find strong support or resistance at the trend line tool. As a currency trader, you may have extensive skills in the market but still, you should learn to use it in the demo account. Just by using this classic tool, you can greatly improve your trading results.
Trend channel
Do you that your trading platform has a simple trend channel tool. The smart traders always use the trend channel tool as it helps them to find the profit level along with the entry price. Let’s say that you are trying to execute long trade in the oil market. So the slope of the trend channel must be positive. You can take the long trade at the support level of the channel but it becomes hard for new traders to define the profit-taking level. They can use the trend channel resistance as the take-profit zone. This approach will allow you to improve your execution to a great extent and you will be able to make more money without having any tough time.
Use the Japanese candlestick chart
The Japanese candle is the best method of analyzing the data. If you take the time and focus on the key concept of the chart, you will notice the line chart doesn’t give enough data to the retail traders. If you consider the bar chart, you will get some data but the quality of the trade signal is not so great. When it comes to the Japanese candlestick pattern, you will get the best signals as each candle tells you about the momentum of the market. So, you must have the ability and skill to analyze the Japanese candlestick chart as it will allow you to take precise trades.
About Mohammad Mustafa Ahmedzai
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