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How to identify forex trends

I think even a day trader, would follow the daily chart. Because identify and trade with the forex market trend is the basics of forex trading.

I often use the following tricks to determine forex trends. 

• Use my eyes to feel the market.
• Draw a trend line to identify the main trend
• Use moving average crossovers to enter trades
• Use Bollinger bands to gauge trends
• Use ADX indicator to identify trend

Then I will put these FX indicators into a Pre-trade checklist.


Forex trading tools to identify the direction of a trend

I often use my best forex trading checklist to identify the major trend on the daily chart. It can help me follow my trading systems and plans. I think you should also make your own checklist before trading forex.

• Date
• Which market will I trade? Stocks, options, futures or forex? It is better to trade in only one market. I am going to day trade the forex market.
• What is my day trading strategy? Forex grid trading system or RSI day trading strategy.
• Check the Economic calendar on the forex trading sites.
• Closing price on the daily chart
• Daily high and low
• Support levels on the daily chart
• Resistance levels on the daily chart
• Are ADX 14 readings above 25?
• Has it crossed 20 exponential moving averages, 50 EMA, 100 EMA and 200 EMA?
• Are ADX 14 readings below 20?
• Are Relative Strength Index 14 readings below 30?
• Are Relative Strength Index 14 readings above 70?

I will keep my Pre-trade checklist and forex trading journals together. I believe that they are my essential tools.

A forex trading checklist

Would you like to share some forex trading tips with me? You can give me a shout on my blogspot.

More reading: Trend Following Psychology

How to identify trend reversals in forex

Many successful traders will tell you the trend is your friend. But they will probably never tell you it is your friend until the end when it bends. Therefore, we will look into how to identify trend reversals.

Free currency trading tips for beginners

1. Please accept your imperfections. Sometimes you'll unable to identify trend reversals in forex.
2. Please control to limit your risk exposure. Because trading is a business and run it on principles. 
3. Don't try to predict and guess where the price is going.

Identifying trend reversals with my forex trading checklist

I will update my forex trading plan checklist every day. This is a boring job, but I will keep going.

1. If the price breakout the trend line, I will find a trend reversal.
2. Double Tops, double bottoms, head and shoulders are reversal chart patterns. 
3. Normally the RSI reading below 30 shows an oversold market and a reversal zone.
4. When price makes a higher high and ADX makes a lower high, there are trend reversals.

Forex trading reversal strategy

I think how to identify trend reversals is an important and difficult problem in forex trading reversal strategy.

First, I must be very careful not to make the dangerous mistakes.

Second, I use position sizing strategy frequently. For instance, anti martingale forex trading system, grid trading forex strategy or pyramid trading system.

Third, if I have identified the direction of a trend, I will decide to exit my forex trades at once.

Forex trading secrets

If you are looking for forex trading secrets, you've come to the right place! 

Welcome to my best day trading beginners' blog. Today I decide to share my best forex trading tricks.

Prepare your essential tools

Many beginners only want to find forex trading secrets. They never spent one minute figuring out how to write a forex trading plan, build a forex trading checklist and keep a forex trading journal excel. 

In fact, they are 3 essential tools for a successful forex trader. If you want to make money in forex market, you should prepare a business plan, a pre-trade checklist and a excel forex trading journal.

My secret to trend trading

You should identify the dominant trend on the weekly, daily and 4 hour chart. It means that you must read forex charts rather than FX market news & forecast.

I often use the following tricks to determine trend 

1. Use my eyes to feel the market.
2. Draw a trend line to identify the main trend
3. Use moving average crossovers to enter trades
4. Use Bollinger bands to gauge trends
5. Use ADX indicator to identify trend

Let me say it again. You must trade with trends on the daily chart unless you are a day trader and likely to trade after a major news release.

Demo before you dive in


You must demo trading before you dive in. Some beginners believe demo trading is not a good practice. So they never open a demo account and test their forex trading system.

However, professional traders think demo trading is very important. So you will practice currency trading systems with a demo account. If you can have success on it, then you can go and open a live account and start real forex trading business.


Secret trading system

I think a lot of successful traders have told you there is no secret to profitable forex trading. But there is, in all this, some currency trading tips and tricks. 

First, I must identify and trade with the trend in forex. These are my tricks.

• Use my eyes to determine the direction of the trend.
• Draw a trend line to determine the major trend.
• Spot trends with MACD indicator
• Use ADX indicator to find day trading trends
• Identify a trend using Bollinger Bands

Second, I have to use the position sizing strategy. A lot of novice traders are often to make use of a fixed lot size for all of their trades. It is infinitely too bad! 

I often use the forex grid trading system, martingale trading system or pyramid trading system. I think they are the best money management system in forex.

Forex trading secrets books

Today I commend two forex trading secrets books to you.

First, Long-Term Secrets to Short-Term Trading by Larry Williams 

Well, I've read that book so many times. It provides many useful theories for forex trading. Now I know it like the back of my hand.

I believe this book richly rewards the effort. You have to take notes while you read it.

Second, Trading Systems and Methods + Website (5th edition) Wiley Trading by Perry J. Kaufman

If you haven't created a winning trading system, you will can't make consistent money in the forex trading markets. So I think it is a best trading systems book for beginners. 

Third, the Psychology of Trading: Tools and Techniques for Minding the Markets by Brett N. Steenbarger

I found this book is very useful for every trader. Whether you are a novice or an old hand, you should read it. Until now, it has helped me vastly improve my trading psychology

I also enjoyed reading Dr Brett N. Steenbarger's blogspot on trading psychology. His blogspot name is traderfeed.

I think there are a lot of secrets in the forex trading books. You must take notes while reading them. It could enlarge your forex trading knowledge.

Find professional trader: twitter LMT978

Day trading profit goals for beginners

Why do 90% of day traders lose money? I think they don't set realistic day trading profit goals.

Beginners always thought they can make day trading for a living. The end result was that they lost his life savings. 

Generally, a professional day trader sets day trading profit goals of about 10 percent a year. This means that he can do about 1 percent a month and risk about 2 percent.

I'm sorry, I know you're surprised to hear from it. 

Why do I set a lower monthly day trading target?

First, I will ask myself: why did I come to day trading markets? Why did I start my day trading business? It is obvious that I would rather challenge myself and do it better than make some quick money. 

Second, I should avoid day trading mistakes and a big trading loss. I think it can help me go further in my day trading career.

Third, Jesse Livermore said in his "how to trade in stocks" that trading is a business and run it on principles. Therefore, I believe day trading is a business and must be approached with a serious attitude.

How to Get a 100% Monthly Return Day Trading?

First of all, I think it is not realistic day trading profit goals.

Second, if you are likely to make a continuous profit from day trading, you must lower down the goals to get the lower goal first.

Third, some top professional traders think average 10% a month is good enough. I will have you notice that they are best day traders!

What day trading goals have you set for yourself?

First, if you are a beginner, you must set a lower monthly target. Generally, 0.5% is realistic.

Second, if you are a part-time day trader, your monthly target is 1%, while risk about 2% is good enough.

Third, if you are going to day trading for a living, you have to look for an average of 2% a month is excellent performance.

How are you planning to achieve day trading goals?

I think my first priority is to control risk in day trading. Once I overlook this important goal, I am about to take on excessive risk. 

Second, I will build a day trading plan, a day trading checklist and keep a day trading journal excel spreadsheet. I think they are the 3 essential trading tools all must have.

Third, I will open a demo account and test my day trading strategy. If I have never started my paper trading, I will can't track, measure my trading performance.

More reading: Key Habits For Traders In 2018 – How To Become The Best Trader Possible

Best books on forex trading for beginners

If you want to make money in forex trading market, you should keep reading top currency trading books every day. Here is a list of my best books on forex trading for beginners.

First, The Education of a Speculator by Victor Niederhoffer

Whatever you feel like forex trading or day trading, you should read this best book. Maybe Dr Niederhoffer does not reveal his forex trading secrets, but you can learn a lot of things from him. 

Especially, Dr Niederhoffer combines the chess, checkers, fishing, poker, tennis, painting, music with the speculation. After you've finished the book, you will take another look at the speculation.

At last, I've enjoyed reading the book. It offers plenty of insights into how the currency trading market or stock trading market to work.

Second, Bird Watching In Lion Country by Dirk du Toit

Allow me to introduce a book about animals. Ha ha, I was only kidding! In fact, this book is the best one on the forex trading market. The author's 4 ×1 trading systems is similar to the forex grid trading strategy.

Furthermore, it covered quite a bit of material:

• Foreign Exchange Basics
• Elements of a proper trading system
• Pre-trading Edges. 
• How to build a forex trading plan.
• My Methodology: Median Trading
• Risk Management

Finally, I believe it fits for every forex trader. You can go to the web to download bird watching in lion country PDF.

Third, Currency Trading For Dummies by Kathleen Brooks and Brian Dolan

The book is suitable for all forex traders, especially for beginners. If you want to start the forex trading business, you must read it. Because it contains the most basic knowledge of forex trading.

Fourth, The Mind of a Trader: Lessons in Trading Strategy from the World's Leading Traders by Alpesh B. Patel

In this book, you can learn many trading tips of professional traders. These may seem so simple, but they are so important, and often overlooked.

The following books are a collection of interviews about successful traders. I think you could learn more from them.

Fifth, Trading Chicago Style by Neal T. Weintraub

Sixth, Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game by Kathy Lien

Seventh, Tricks of the Floor Trader: Insider Trading Techniques for the Off-the-Floor Trader by Neil T. Weintraub

More reading: Is it possible to make money in forex?

Best books on forex trading for beginners