Market Psychology PowerTip: Trading With Market Cycles

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4 years ago

Market has different cycles depending on the actual happenings in the market. These actual happenings in the forex market influence the direction of trends both long-term and short-term.

Before you can understand or dig deep on market cycles you first need to identify which type of trader you are? That way you can easily note what to concentrate on.

Expert traders trade the trend not imaginations and the trend has very many players or factors that influence price movement depending with the market cycle. I.e if price is at equilibrium,it is the central point of the trend where traders trade below or above it using a series of moving averages depending on the nature of their trading. I.e either 50 MAs or 200 MAs if long-term traders. We also have the Range/Sideways/Trendless Market where basically there is no actual trend. Mostly on such market conditions there is actual indecision between buyers or sellers and this is mostly where beginners are gambling but expert traders trade outside the range with pending orders.

NB: On range markets,breakouts always happen and here you enter into another market cycle i.e Breakouts,This is where the markets breaks the indecision,here either buyers or sellers win. Breakouts may be very fatal for anyone trading in opposite direction and here is where most beginners blow accounts.

Breakouts are also triggered by major events and mostly price fall in Range markets in preparation of Major events in the market.. These are the most important Cycles to pay close attention to when starting of your trading Journey. Blessings.

NB:Actual trading is not what beginners imagine. Most beginners think that once you enter a trade the trade must enter profits immediately. That is not true even though at times it happens. The truth of the matter there are so many factors that trigger price movement,these are the factors that lead to the competition of the buyers and sellers and normally those who are right win and price move to their predetermined direction. Example EUR-USD. Price on the chart may seem to be rising meaning beginners will automatically be buying but expert traders had Pending orders in the name of Sell Stops below market and they were holding to activate either after a breakout or any other market cycle because they could easily identify and understand what will happen next in the market. Thus the experts will always win as they know why they are holding the position.

 

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Resources

  1. https://iqoption.com/en?ref_id=186076

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