Forex trading in Sri Lanka can be a fascinating experience. Traders are always looking to attain the best market prices. These forex traders look into what the market has to offer for them and try to catch the right opportunities that could have great possibilities of high profitability. There are many reasons which make the forex market the best place to trade.
Every trader has different reasons to why he or she wants to trade in the forex market. To trade successfully, traders must know what they want and what to look for. There are various ways to analyze the forex markets, such as patterns, charts, and other analytical tools. They help you read the market conditions and what could be expected in the future. Different traders have different reasons for choosing the Forex market and choose different methods to analyze the market position.
Here are a few of them:
A pin bar pattern comprises a single price bar showing a distinct reversal and rejection of a currency price. It is usually a candlestick price bar. The reversal pin bar is recognized by its extended tail, known as a shadow or wick. The zone that lies between the opening and closing end of the pin bar is referred to as the real body. Usually, in the pin bar, the real body is small and the tail is longer. The tail shows the prices which have been rejected, implying that the price will continue to move in opposite direction to which the tail is pointing.
Pin bar can be categorized as a bearish pin bar and bullish pin bar. In a bearish pin bar, the real body exists at the lower end of the long tail, with tail representing the higher prices which have been rejected for attaining the lower price in near future. In a bullish pin bar, the real body lies on the upper end of the long tail, and here too, the tail represents the lower prices which have been rejected to attain the higher price in near future.
In order to better your pin bar trading results, look for pin bars in trending markets. A trending market is that market where price is moving in a particular direction. It can be moving in an upward direction, downward direction, or horizontal direction. Although you can also find great pin bar opportunities in range-bound and counter-trend trading, they do not occur very often and it can be difficult to trade as compared to trending markets.
Focusing on pin bars in trending markets means that you will only be focusing on charts with market trends or pairs of currencies. To becomes successful in pin bar trading, you should learn about how to trade in trending markets on everyday chart and charts with 4-hour time-frame. To learn more about what are technical tools to learn how to forex trading in Sri Lanka, check out - Forex Chart Types, Chart Patterns, Candlestick Patterns, and Indicators.
It is not necessary that the market will always move in upward, downward, or sideways trend. Once you have learned about doing pin bar trading in trending markets, you can move to trade in other market conditions without trends. You can look for pin bars at the main support and resistance levels in the market. They can be strong points for a pin bar trading. If you want to know what is the support and resistance level and how to find them, you can refer to ‘Forex Trading with Support and Resistance Zones’.
Protruding pin bar tail means when the tail is jutting out from the key levels resulting in incorrect breakout level. The pin bar is basically an indicator of reversal, and more the tail is sticking out from the key level, powerful will be the rejection and reversal. With the stronger reversal, there are more chances of pin bar trading strategy becoming a great success.
Fundamentally, reversal trading is a counter-trend trading method. In this trading method, a trader enters the market against the direction in which price is moving. It helps in reducing the risks when the price movement begins the reversal trend.
It might seem a lucrative idea to get into the market at very high or very low price points in the market. Reversal trading can be done in two way, bullish and bearish. When the market is bullish, the reversal will occur when the price will start falling from a very high price point attained due to an upward trend. On the other hand, the bearish market, a reversal occurs when the price starts moving upwards after reaching a very low point due to a downward trend in the prices. While reversal can be a good trading position, it is a very risky method and is not appropriate for the beginners of the forex trade.
Types of Reversal Trading based on price movements in the forex market:
As a forex trader, when you are executing a reversal trading strategy, it is better to consider some factors that can help you move your trade in the right direction. They are:
When it comes to forex news trading, it is perhaps one of the most fascinating and exciting ways of trading. The effects could be immediate in the form of quick profits or quick losses. With quick profits come quick satisfaction and with quick losses come quick discontentment. Basically, news trading is about trading in the forex market after a news has been released that can have the impact on the forex market price movements.
When you are getting into news trading, it is necessary that you gather the knowledge regarding which new releases are expected during that week. When trading news, you first have to know which releases are actually expected that week. Along with that, it is important for you to comprehend which information or data you should look out for when going for news trading. Some of the data you must follow from any economy are Interest rate fluctuations, Sales data, Country’s inflation rate, Unemployment rate, GDP, Business reports and surveys, Consumer surveys, Trade balance, and many other economic indicators. Importance of the factors or news releases may vary depending on the current scenario of the concerned economy.
But, what you need to understand is that news trading is not everyone’s cup of coffee. It is especially not a good choice for beginners as it is very risky and can instantly turn the profits into losses. Even many experienced traders avoid new trading during the time when news can have a huge impact as it can be dangerous to trade during those times.
1) It would help you place a trading order, if you know in which direction the market is currently moving, whether it is upwards, downwards, or sideways, and which direction it could move during the news trading. It is also referred to as directional bias when you place an order based on in which direction the market might move in future after the news release.
2) Try to figure out the fundamental reasons for why and how any news release affects the market and why it moves towards a particular direction after the news release.
3) When you are willing to place the trade based on a non-directional bias, it means you don’t care which way market prices move, you just want to place the order. It might be a good move under normal market circumstances, however, if the news released is of high impact, you might want to consider before placing the order.
4) Before placing an order based on the news release, it would be better if you check different reports to get a feel for what really is happening. Look for things like:
5) Entering into the market without proper knowledge and preparation during a high-impact news release can turn out to be a disaster for your trading position. Take your time and get some practice. Do your research and evaluate the economic indicators to recognize how they impact the forex market.
6) Keep in mind that, when a news is released, its effect usually lasts from half n hour to 2 hours, and it can change based on the current scenario of the market. So make your trading plans based on that.
7) In case you have done a fundamental and technical analysis of the market for an expected news release, but when the actual news is released and market moves according to that, and the real movement does not match your expectations, do not go against the market trend. Just follow the market trend. It might be that you might have missed some details while making analysis or might have fully understood what effects might come upon the market on the release of the news.
8) Last but not the least, never be in too much hurry to get into a trade. Rushing into the things might prove to be a damaging move on your part. Look for the strong indicators, and make sure whatever news has been released in the market is genuine and not a hoax, and only then make your move to trade in forex market.
Just keep in mind that, nothing comes easy and you must put some efforts on your part to enjoy the benefits of the market conditions.
To learn more about technicalities in the forex market, refer to ‘ What are the must know the technical terms used in the Forex Industry that I should know ? ’ and if you want to hire forex brokers in Sri Lanka, refer to ‘ Where to trade Forex Online and type of Forex brokers ? ’
Prathilaba October 17th, 2018
Posted In: forex school
Tags: forex, forex brokers, forex brokers in sri lanka, forex brokers Sri Lanka, Forex Trading, Forex Trading Ideas, forex trading in Lanka, forex trading in sri lanka, forex trading sri lanka, News Trading, Pin Bar Trading Pattern, Reversal Trading, Tips for news trading, trader, trading ideas
Being emotional is part of being a human. But getting emotional when you are trading in forex market might not be such a good thing. You can’t avoid emotions, but what you can do is not let them influence your decision-making abilities. As a result, it is important that you understand what type of emotions you should watch out for while trading in the forex market. If you want to do forex trading in Sri Lanka , managing your emotions in a refined way would decide your ability to earn profit or loss in the forex market. The best way to approach your emotional dilemma is to understand your nature as a trader, find your strengths and weaknesses, and pick a trading method that will suit your psychology and financial standing.
Here are some of the most common emotions people feel when trading in the forex market:
A large number of forex traders, both novice and experienced, go through a temptation of over-trading. They make plans to overcome this temptation, which can be tricky at times. By formulating a well-defined management plan of action, you can get over the urge of overtrading and stay in the market in the long run while also maintaining and improving your trading position.
Fear is a part of trading in forex market where prices move up and down, and where there is no guarantee that you will not lose what you have earned, a few bad moves, and all might get lost. The fear of reaching a position where a trader might have to suffer losses can be damaging and the trader might also lose some of the very profitable opportunities out of fear.
Winning a few hefty trade deals can make a trader greedy for more and he or she might become less conscious or overconfident when trading in the forex market. Try to avoid being over greedy. Greed might work for you at times, but it can also make you reckless and you might start making too many impulsive decisions that might be harmful for your overall trading position. Greed can increase the risks and also encourage your gambling tendencies.
Hope is like a double-edged sword. It is good for life and trading, but having too much hope can be as damaging as too much greed and fear. If you have placed an order on the losing trade, you might be hoping that the loss will turn into profit in future. As a result, you may miss all the signs that the trade will go on the path of losses and continue with that trade. You might also enter into a bigger trade hoping that it will compensate all your previous losses, which might prove to be very risky. So be careful what you wish for or to be more specific, what you hope for.
Getting excited and anxious is not unusual when trading in the forex market. When you are very anxious or excited while trading, it is often an indicator that you are working against the trading rules and expectations, or you have gotten into a deal where you are wondering whether it was a right or bad move, or you are gambling a high amount. The best way to handle this situation is to write down your feelings and figure out the reasons behind why you are anxious or excited and plan accordingly.
Sometimes while trading in the forex market, you lose a great deal or face losses because of the actions of an opponent or another trader. You might feel very angry at this and in order to prove yourself better than your rival, you might want to retaliate against him or her. This can lead to a very bad example of risk management. Because results of revenge can be something you might not be ready to handle and it might have devastating effects on your trading and overall financial status. Decisions you will take in the throes of revenge might turn out to be bad business decisions.
How To Handle Your Emotions When Trading In Forex Market?
Mentioned below are a few tips on how to manage your emotions so that they won’t ruin your trading performance:
To manage your emotions like fear, hope, greed, etc. you can start maintaining a forex journal. To know more about how to do it, you can refer to the article ‘ What is a Forex Trading Journal and Why I should use a forex trading journal ? ’
Also if you want to to know how to trade forex in Sri Lanka, read ‘ Introduction to Forex Trading ’.
Prathilaba October 17th, 2018
Posted In: forex school
Tags: controlling emotions in forex, emotions in forex, forex, forex brokers, forex brokers in sri lanka, forex brokers Sri Lanka, Forex Trading, forex trading in Lanka, forex trading in sri lanka, forex trading sri lanka, trader, trading forex, What Emotions Should You Watch For In Yourself While Trading Forex
When it comes to doing forex trading in Sri Lanka, it is a lot more than just studying numbers, charts, patterns, and ratios. It also involves the personal skills and talent of the trader. However, even the best of forex traders work on improving and sharpening their skills with diligent preparation, training, and discipline. In order to become one of the successful forex traders in Sri Lanka, you should conduct a self-examination of whether you know exactly what you are doing, and understand on why and how you should avoid any kind of fear and greed when trading in forex market. Mentioned below are a few tips on how to become a successful broker, and how to trade forex in Sri Lanka successfully:
Now, it is essential to understand that before you get into a forex market, you are required to have some prior knowledge and understanding regarding how you will take trading decisions and implement them when trading in forex market. You should also know about what is the right time to enter and exit a forex trade. There are many ways to read a forex market. While some people prefer to do analysis involving the economic factors, some read charts, patterns, and trends in order to make a trading decision. It doesn’t matter what method you like to use, you would have to be consistent and be sure that you know what you are doing and that you are choosing the right method for yourself.
But for you to do that, first you would have to learn on how to do it and forex trading is not something you can learn overnight. You would have to put in lots of hard work, practice assiduously, and have patience when learning the changing mechanics of a forex market. Forming your foreign currency trading plan and developing the necessary skills will require time and patience, and the right opportunities will come your way. Also be smart when making trading decisions. Do hard work and smart work.
When trading in the forex market, keep a forex journal to keep track of how you are progressing in the forex market trading. These journals can be very convenient, especially when you are going through a negative phase in the forex market trading results. It can be a confusing and demoralizing situation for you. It might be difficult for you to figure out where did you go wrong with your trading decisions. In this situation, you can refer to your forex journal.
When you are looking for the answers to questions like ‘Am I making the right trading decisions?’, ‘Can I keep trading the same way I have been doing in the past?’ ‘is it time to change my approach or quit the market?’ and so on. It will be a lot easier to find answers to these questions if you can refer to past transactions.
A forex journal will help you to recognize the particular time intervals when you were not making the expected profits, although you had been following your pre-planned trading strategy without failing. In your journal you should enter the entry and exit time of your trade, the volume of the trade, market conditions, why did you enter the trade, your profits or losses, and so on. This will help you acquire the psychological control and discipline in order to execute your order successfully.
When you are entering into a forex market, you will not survive without sufficient capital in your pockets. Luckily, you can start trading in the forex market with small margin amount. Yet, it is an unwritten rule that you should not trade beyond what you cannot handle financially and psychologically.
Some traders think that the larger accounts will give them larger profits, but that is not always the case. In case any of your trading decision doesn’t sit right with market conditions, you might have to suffer heavy losses. Without enough capital, you might be putting yourself at a greater risk than what you can afford.
When entering a forex market trade, it is necessary to consider the risks involved and see if it is worth putting your money into it or not. Along with the risks, you must also consider the possible payoffs, and then make the final decision.
Fear and greed can be very damaging for your trading position in the forex market. It is important to control your raging emotions when trading. It might be perhaps one of the difficult impediments when you are operating in the forex trading market. Each and every time prices move up or down, you might feel tempted to buy or sell the currencies. But you must control your impulses until you are sure that market is moving in the direction you have been expecting. Getting greedy with rising prices, and fearing when prices are falling are not the appropriate traits to hold on to, especially if you want to be a successful forex trader in the long run.
Fear can stop you from forming a strong base in the forex market and you might also lose some very profitable opportunities. It is fear of losses that might lead you to sell your foreign currency too early while making a very small amount of profit. Know that fear can be controlled and managed by creating a proper and effective plan and maintaining patience and discipline.
When trading in the forex market, utilize right take profits and stop loss strategies to make the best out of existing market conditions and price movements. This could be a bit complicated. The objective behind this strategy is to get out of the trade when you are making good profits, instead of waiting for the prices to go down and then get out of the trade with the fear of hefty losses.
The eventual goal for forex market traders is to make best out of price changes so as to make profits at the right opportunities. With the careful implementation of take profits and stop loss strategies, you can improve your control over your trades and funds, and reduce the risks and maximize the profits.
If you want to learn about forex market analysis, you can refer to ‘ Fundamental and Technical Analysis in Forex Trading ’, ‘ What is the Price action trading analysis ? ’, and ' Forex Trading with Support and Resistance Zones ’.
Prathilaba October 17th, 2018
Posted In: forex school
Tags: forex, forex brokers, forex brokers in sri lanka, forex brokers Sri Lanka, Forex Money management, Forex Trading, forex trading in Lanka, forex trading in sri lanka, Forex Trading Journal, forex trading sri lanka, Forex trading tips, successful trader, trader