Retail traders must have heard the proverb, the trend is your friend. Trading with the major trend has a unique advantage. Since the trading asset tends to favor the major trend, if you start trading with the major trend, you can easily make a decent profit without losing too much money. On the other hand, if you start trading against the trend, you are going to lose most of the trades. There are two types of trend in the Forex market. When the price of a certain asset rally higher, the market is said to be in an uptrend. In contrast, when the price drops sharply, the market is said to be in a bearish trend. Today, we are going to learn some unique methods which we can use to trade the bullish trend line like a pro trader.
Drawing the bullish trend line
To draw the bullish trend line you need to learn about the key swings of the market. Most of the time traders are drawing the trend line in the wrong way. To find the bullish trend line support, you need to connect at minimum three higher lows in the market. Once you connect these three higher lows, you can easily find your bullish trend line. Most of the time the market starts to rally higher when it tests the trend line support in the fourth time. Traders need to use the fourth point as their trade execution process.
Execution of the trade
The trade execution process plays a crucial role when it comes to the trading business. First of all, learn to pick the right asset in the CFD market. If you trade the wrong pair, it won’t take much time to become irritated with your open position. Try to find a volatile pair which will offer you plenty of profit-takings the opportunity. Once you have selected your trading asset, you need to look for the retest of the trend line support. When the price bounces off from the trend line support, open a long order. Though this is a very straightforward process, it works like a charm.
Using the price action signals
You can also look for price action confirmation signals to execute the orders in the market. Most of the time traders are losing money because they don’t use the price action signals. Try to find bullish confirmation signals at the trend line support so that you can execute the trades with a high level of accuracy. Think about your long term goals so that you can make a decent profit without hassle. Those who are having trouble with the different formations of the Japanese candlestick pattern can focus on a demo account. The demo account will give you a unique opportunity to learn about the different candlestick patterns.
Dealing with the bearish reversal
At times the bullish trend line support will fail to provide strong support to the trading asset. Eventually, the price will break below the trend line support and the traders will lose money. So, the trend trading strategy is not the Holy Grail. Always trade the market with managed risk so that you don’t have to lose a big portion of your trading capital. Think about the conservative trading method and try to improve your skills by learning from your mistakes. If you manage to trade with a strict risk management policy, a few losing trades are not going to be too hard you.
Dealing with the high impact news
Most of the breakout or trend reversal takes place on the major news release. So, try to read more about the news analysis so that you can deal with the major trend reversal based on fundamental data. Things might be a little hard at the initial stage but if you focus on your skill set, it won’t take much time to learn how the market reacts to different forms of news. So, prepare yourself to deal with the major news while trading the bullish trend line.