Technical analysis is the most important thing you need to learn as a currency trader. Being a fulltime trader, you should master the art of technical analysis to survive in the trading business. Those who are making consistent profit know the ins and outs of technical analysis. So, what is technical analysis in the Forex market? This is nothing but using the advanced tools to find the potential trade setups in the higher time frame. If you learn to use this tool efficiently, you can easily make big profits from this market. The professional traders use a wide range of tools available in the trading platform. Today, we are going to discuss the top four tools used in technical analysis by pro traders.
Trend line tools
The trend line tool is the most basic thing that allows you to trade the market with a high level of accuracy. Most of the time, the retail traders are losing money since they rely on indicators reading to find the trend. But with the help of the trend line tool, you can easily find the potential trade setups in the market with a high level of accuracy. Being a fulltime time trader, you should learn to use the trend line tool like the elite traders in Singapore. They use it in the daily time frame so that they don’t have to lose too much money using this tool.
Horizontal line tool
This is used by traders to find the horizontal support and resistance level in the trading instrument. Unless you can find the key trading zone, it is really hard to survive in the ETF industry. Though the tool is very easy to use, the naive traders often make mistakes while drawing the support and resistance level. To find a valid support line, you need a minimum of three connecting points. On the other hand, to find a critical resistance line, you need a minimum of three connecting points. Once you have found the critical support and resistance level in the trading chart, you can execute the trade and make a decent profit without risking too much.
Fibonacci retracement tool
The Fibonacci retracement tool is mostly used by professional trend traders. If you want to trade the market with the major trend, you need to learn to trade with the Fibonacci retracement tool. With the help of the Fibonacci retracement tool, you can find high-quality trades in the market. Instead of using all the retracement levels you should be using the 38.2%, 50% and 61.8% retracement level. If for any reason the price breaks below the retracement level, you should consider it as a sign of trend reversal. To maximize the profit, you should use the price action signals to trade the retracement levels. Though it’s a very complicated task, with the help of basic tools, you can easily improve your trading skills and make a decent profit.
The equidistant channel is mostly used by skilled traders who know the perfect way to execute the trade in the market. But when you draw the channel, make sure you rely on the market dynamics. If possible learn to trade the market with the help of the price action signals so that you don’t have to lose a big sum of money. Trading is all about finding the perfect trades. If you draw the channel with a high level of accuracy, you can expect to make a decent profit without losing too much money. Learn to deal with the major trades in a very efficient way so that you don’t have to lose trades even after learning the use of these premium tools.
We have discussed the 4 most important trading tools used by the professional traders. If you want to make consistent profit from this market, try to use this tool in the demo account first. Learn their use properly before using them in the real market.