Forex trading learning trading strategies in different market environments 4 - retracement and reversal
Have you experienced similar situations before? It looks like the exchange rate forexrebatesbrokers starting a new round of rally, can we choose to go long with the trend? If you choose to carry out the above operation, then you will be very wrong It turns out that the forexdiscountbrokers of the exchange rate has made you bleed a lot No one wants to encounter a retracement of the exchange rate situation, but unfortunately, it does happen often, which is why? In the above example, the trader failed to distinguish the difference between retracement cashback forex forex discount brokers The trader did not remain patient enough to catch a new round of downward market, but believed that the exchange rate is about to reverse, and more than a single operation Unfortunately, his silver also followed more than a single gone In this lesson, you will learn the characteristics of retracement and reversal, how to recognize them, and how to protect yourself from false signals. And how to protect yourself from false signals What is retracement? A retracement is defined as a brief period of forexbonusrebate reversal in the course of an established trend. We can also think of a retracement as an area of price reversal towards the overall trend, where the price will continue the previous trend after moving out of the area. Lets continue... A reversal is defined as a change in the overall price trend. When an uptrend becomes a downtrend, a reversal occurs. When faced with a possible retracement or reversal, you have three options: 1) You may hold a position in a currency, which could result in a loss to your account when the price retracement eventually proves to be a longer-term reversal move. 2) If the price starts to move in the general trend again, you may choose to close your position and enter again. You may choose to close your position permanently if the price moves in the opposite direction of your single position, which could result in a loss after you close it; or, if you choose to close your position near the top or bottom of the price, you could also make a huge profit depending on your trading structure and what happens next, because reversals can happen at any time. This is why, when trading on a trend, setting a moving stop is a very effective risk management method that you can use to protect your profits and ensure that you always leave the market with some profit when there is a long-term reversal in the price.
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