All traders need to increase their ability to read charts. Stock,forex,futures charts are pretty easy to read once you take the time to learn. Set your charts to be easy to read with just a couple indicators. If the price isn’t at a good level of supply or demand, you must wait. In an uptrend, you will see prices move away from the average only to snap back to them when the channel of the cycle returns. The same is true when changing to a downtrend, then the average would be violated and the price would bounce off of it to the downside before returning during peaks in the cycle. If the average is weak in both directions, then we do not have a strong trend in that time frame on the chart.Once you get use to placing trades then you can increase the size. Trade that for a few days or weeks. The reasons for building up slowly are many however this will save you money in the long run. The most important part of this is you understand there are two ways to think trading and markets.
It is important to keep your emotions in check when trading. The market doesn’t care about your position size. A fifty pip move on a mini lot in the EUR/USD is only $50. But a fifty pip move on five standard lots is $2500. Does the market care about your position size of 5 standards. It does not care and will take your money every time you let your emotions take over. Traders need to set stops and profit targets this will take a major part of the emotions out of your trading.
The main difference is how the larger position size affects YOU. This is why adding to position size slowly allows you to not be emotionally affected by the massive changes in the profit and loss column from trading larger sizes. The novas’ trader can do things that would have seemed unimaginable just a few short weeks ago. When trading online it is important to understand how trades work. All of these things will help your confidence and move you up the learning curve to where trading multiple trades, becomes easy.
When traders are using moving averages, they acknowledge that it is an average of price and that price will move away from that average and revert back during a trend. The average should be much like the support and resistance areas. You want an average that is half the length of the cycle so that it will show the peaks and troughs as movements from and to the average itself.