Resistance is a point where the price has trouble passing above. While support is where the price has trouble falling below. In uptrends the price exceeds the resistance level, then goes back down to the resistance level. Reversely a downtrend price goes below a support level returns to the support level when we would enter a short position and hope that the downtrend continues.
These two pullbacks usually occur when traders start taking profits at defined points. The second most popular strategy of the futures trading strategies is breakout trading. In a simple form, we are looking for a narrowing trade range of diminishing volatility. We can also use head and shoulder, rectangle, or pennant, or falling wedge to indicate a breakout.
The volatility is closing to a point. If it were then all successful traders would be bald or have gray hair, and we know this is not the case. Is it those that have inside information? Be real. In today's futures trading world data and information are global and instantaneous. I'll tell you.
It is one factor. An all encompassing trait that successful futures traders have in common. They can be male or female, young or old, experienced or novice traders. What is it? Discipline is the answer. Everything else pales in comparison in importance.
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Every successful trader has discipline as a strong and consistent part of their personality. Their futures trading style can be aggressive or conservative. They can be scalpers or long term position traders. Regardless of the specific style, every successful futures trader is always disciplined.
Without discipline, sooner or later, and usually sooner, a futures trader will fail and lose his capital. No ifs, ands, or buts. It is a certainty. Well, this presents us with a significant problem. Most humans have a problem with discipline. So, as a commodities trader, how can you improve your chances of overcoming this obstacle to success?
Have a futures trading plan and stick to it. Do not change your strategy while in a trade, during the heat of competition amid market hours. Keep your discipline. This is exactly the point where the underlying uptrend should resume. The same is true for downtrends, only that you would look for the tops of lower highs to enter with a sell position. Take a look at the following chart. The tops of the lower highs LHs are used to enter with a short position, while the lows of the higher lows HLs are used to enter with a buy position.
Top 4 mistakes that cause futures traders to fail
The areas in green shadows represent price corrections during a trending market. In terms of Fibonacci levels, look for retracements between Counter-trend trading refers to taking positions in the opposite direction of the underlying trend. For example, a counter-trend trader would look for sell opportunities during uptrends and buy opportunities during downtrends.
Counter-trend trading strategies are usually riskier than the other strategies explained in this article and should only be used by experienced traders. Futures trading can be a very exciting and lucrative endeavour if you have a well-defined trading strategy and risk management. We also like trend-following strategies and trading in the direction of the trend.
So, you want to become a day trader and join the hundreds of thousands of day traders who are living in the UK? Then this…. Day trading is one of the most popular trading styles in the Forex market. However, becoming a successful day trader involves a lot of blood,…. Want to day trade for a living? Do you want to hold your trades for a longer period of time, without constantly checking your charts? Do you want to increase your profit…. Support and resistance levels are a powerful concept in technical analysis.
Many technical tools have been developed to take advantage of support and resistance levels…. If you trade, we can save you time and money… See how here! Next: Step 2 of 4. Phillip Konchar October 7, Learn and view trades in real time on our: Trading for Beginners Course.
Speculators use futures contracts to speculate on the market and make a profit. Learn more, take our premium course: Trading for Beginners. Learn about Technical Analysis. For example. A Forex trader who holds an Aussie trade open over the weekend may get seriously hit by a Trump tweet on US-China trade relations and we know how much he likes to tweet over the weekend. Categories: Skills.
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Phillip Konchar. Related Articles. Joe Bailey October 8, Phillip Konchar June 2, Joe Bailey September 29, Phillip Konchar October 18, Phillip Konchar December 6, Request a Free Broker Consultation.
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