Everyone knows that the chart pattern trading strategy is the most efficient way to earn more money. People jump into the chart pattern trading method with the hope that it will change their lives. Soon they realize the complexities associated with the chart pattern trading. If you want to survive at trading, you should learn about the major chart pattern trading method. With the help of the major chart pattern, you can easily recover the loss and find some great trades. So, how do you read the major chart pattern like the pro traders? Let’s dive into the details.
Types of Chart Pattern
There are two types of chart patterns used by professional traders. The first type of chart pattern is known as the continuation pattern and the second type of chart pattern is known as the reversal pattern. The naïve traders should learn about the continuation chart pattern trading method because the risk factor is low. Once you become skilled at trading the continuation pattern, you should deal with the reversal chart pattern trading strategy. But both of these trading strategies greatly depends on the traders’ personality. You can either trade the major breakout or wait for the retracement in the price to execute the trades.
Using the aggressive approach
If the breakout is the result of the major news, you need to use an aggressive trading strategy. Right after the breakout, you should place the trade. Most of the time, the market doesn’t retrace back for another test of the support and resistance level. But when you use the aggressive approach, using the stop loss will be a little bit hard for the naïve traders. Once you get good at using the aggressive approach, you will realize why the professional traders rely on the chart pattern trading technique.
Using the conservative approach
You should learn to the conservative trading technique also. But to become a conservative trader, use the Saxo Forex broker so that you don’t have to deal with the faulty trading environment. Making a big profit and trading the market with high risk is a very tough task. But if you look at the elite traders, you will realize the approach related to the conservative trading technique. Wait for the minor retracement in the price so that you can place the trade with a tight stop. By doing so you can improve your trade execution process to a great extent. But never think you will always win the trade using this strategy. At times, be prepared to lose trades even though you will follow all the core rules.
Risk management factors
By now you should have a clear idea about the different types of chart pattern trading methods. Still, you need to learn about risk exposure management. Taking too much risk and trying to earn more money is nothing but a suicide mission. Think about the safety of your investment to protect your trading capital. Forget about the high-risk trading strategy since you will always lose money by doing so. Take your time and try to improve your skills over the period. Focus on the long term dynamics so that you don’t have to deal with the false breakout. Learn to take smart steps so that you don’t have to lose a big portion of the trading capital.
Trade with a definite goal
Learning about chart patterns doesn’t mean you will become a successful trader. You should learn to set a definite goal to reduce the risk of trading. Those who have extensive experience in the retail trading business always place a trade with high risk. They never break rules since they know the consequences of trading the market with greed. If necessary, try to learn about the price action trading method so that you can boost your profit without taking a big risk. Last but not least, use the daily or higher time frame only.