I have been interested in financial markets for a long time now. If I remember well it could be around 8 years. During that time I have had a lot of good and bad experiences. As you may understand trading is very risky and by having very high expectations to get a lot of money very fast you may be quite disappointed... very fast! Like any other job it requires time to master and you cannot expect to become a professional over a night. Being a trader is a unique profession as nobody guarantees to you that you will get a salary each month. No, you may actually pay yourself to the market and its' participants, because you do not know how to trade it.
One thing that I have learned immediately after starting trading is that a trend is your friend. Another thing that I learned was that trends do not happen very often. So, my friend would not visit me a lot and I would have to wait for him many months. What I was not told was that range was not my enemy either. I understood it myself after trading Forex for about three years. I started noticing certain technical patterns which are repetitive throughout markets and one can use his technical skills to trade those patterns.
Range trading can be very profitable if you have proper instruments in your trading portfolio. One of the instruments is understanding of support and resistance levels. In a range prices go to the highest level of the range and fall back to the lowest level of the range. Prices usually reverse at those levels. Just by having this knowledge you can make a lot of profitable decisions every week trading various pairs in Forex market, stocks in Stock markets and commodities in futures market. You will need more than that, but without 'that' you would better not think about 'more'.
Various technical indicators will help you to identify exact entry points for your trades. I am going to discuss those in my future posts. For the time being you have to know that support and resistance are key elements in range trading. Remember it, for you will need it any time you sit down to trade during range seasons in financial markets.
Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. Forex Capital Markets LLC. will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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