March 8, By Graeme Watkins. Why Trade with targets? What indicators can you use in target trading? While the list below is by no means exhaustive, you may want to consider the value of using any of the following indicators: Fibonacci levels: These levels make it easy to plan trades around extensions and retracements to these widely used levels.

Target prices and stop-losses can be placed just above or below a target price. Moving average convergence-divergence MACD : Target prices can be accounted for alongside price momentum by watching for MACD crossovers. When the MACD line crosses above the signal line, it can indicate a potential price swing and motivate an open position.

Where do you place profit targets? Target Trading: When should you walk away? Use a stop-loss or trailing stop-loss to lock in profits. Sell off a portion of your position to claim profits and reduce your risk if a price swing occurs. Monitor technical indicators closely, and exit if your available evidence is pointing to impending losses. What types of stop-losses should you use in target trading?

There are three types of stop-losses to consider as you plan out your target trading: Trailing stop-loss: With a trailing stop-loss, the trader continues increasing the price point at which a stop-loss is set, locking in profits as the price movement for a currency pair moves in their favor. This protects you in the event of a sudden downturn, ensuring that your assets are sold at a price that guarantees a profit.

Incremental stop-loss: If you want to balance profit taking with holding a position to capitalize on future growth, incremental stop-loss orders can be placed to gradually reduce the size of your position as profits are achieved. For example, you can sell off a certain amount of your position once you reach the target price while holding on to some of that currency to see if the price continues to climb beyond your target.

Stop-and-reverse order: If prices experience a sudden swing, a stop-and-reverse order lets you exit a position at a set price, insulating you from the dramatic loss in value you would otherwise suffer. Disclaimer: The information provided herein is for general informational and educational purposes only. This post was written by Graeme Watkins CEO Valutrades Limited, Graeme Watkins is an FX and CFD market veteran with more than 10 years experience.

Key roles include management, senior systems and controls, sales, project management and operations. Graeme has help significant roles for both brokerages and technology platforms.

Read more articles by Graeme Watkins. Valutrades Blog Stay up to date with the latest insights in forex trading. Subscribe For Blog Updates. Popular Posts. Topics Competition 4 COVID 1 Cryptocurrency 1 Economic News Events 7 EURUSD 2 Forex Affiliate Programs 1 Forex Indices and Commodities 4 GBPUSD 1 HK50 1 indexes 1 Indicators 4 November Monthly Review 1 NZD 1 NZDUSD 2 Seminar 1 Sentiment Analysis 1 Trading Accounts 3 Trading Strategy 7 Trading Videos 6 UKOil 1 US30 1 USDCAD 1 USDJPY 1 WTI 2 XAUUSD 3.

Shane first starting working with The Tokenist in September of — and has happily stuck around ever since. Originally from Maine, All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.

Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid. The year was a roller coaster—so much so that the trends set in forex then have not really stopped to this day.

Millions have entered the market this year just in the U. This competition has made the present moment a perfect time to start trading quickly and cheaper than ever. Some are very beginner-friendly and can make you your first profits today, while some take more time to master but will bring pure joy and material gain once you figure them out.

The key to being a successful trader is knowing how to predict whether prices are going up or down. If you have the necessary knowledge, then you only need a starting capital as well as a good forex broker to invest through. However, forex is not like that. Exchanging currencies is all about noticing small opportunities and exploiting them quickly. Mastering a simple strategy will allow you to make correct predictions and profit most of the time unless a black swan event like COVID happens.

But even then, if you can adapt quickly, you will make an even greater profit. Randomness and chaos affect all traders, and the more confused they are, the more opportunity you have to strike gold. One more huge benefit of knowing about strategies is that all traders use them. Take a look at our report on the leading forex brokers in the US. The best strategies are those that work, have always worked, and will continue to work in the foreseeable future.

We will now list and explain these strategies and rate how beginner-friendly, time consuming, and risky each one is. This strategy consists of looking at a price chart and finding the so-called resistance and support lines. You can make a resistance line by looking at the highest price points over a certain period and connecting them with a straight line.

You can think of a resistance line as an upper price limit of a currency pair—if the price goes beyond it, that means that traders have overbought and that the price will drop very soon.

The support line is just the exact opposite of the resistance line. You just take all the points on the chart where the price dipped and draw a straight line through them.

As you can see from the bottom part of this graph, the blue boxes represent peak prices and the red ones represent bottom prices. This tactic only works if the markets are stable and passive. If the prices are going up or down, you need a different approach, and if the prices are too volatile, using range trading might prove impossible. Nonetheless, this strategy is recommended for complete beginners who are just getting introduced to forex trading. Unlike range trading, this strategy uses price trends to find buying and selling opportunities.

Here you must also find the lowest lows in the price chart and the highest highs. Then you should draw lines through them and that will represent the price trend—this can either be an upward or downward trend. So, if the highs are steadily getting higher and the lows are steadily getting higher, this is an upward trend.

That tells you you should buy the currency pair when it dips and sell when the price surpasses the latest high point—or you can hold it for a while and sell when the price grows a lot.

Naturally, the approach is the opposite if you have a downward trend on your hands. If the answer to all these is yes, you usually have a steady upward trend on your hands and you can exploit it.

This is a long-term strategy that requires fundamental analysis but also following macroeconomic trends and relevant news. As you can see in the graph above, the places where the prices stay very high for a long time are the head and shoulders points. Finding these areas and drawing a line through them can tell you where the prices are going. In this example, we can see the Germany 30 index. An important thing to note is the effect that Brexit had on the movement of the price trend—you need to analyze charts and follow the news just so you can take major economic events into your calculations.

Check out the top forex trading apps for mobile access to the forex market. Day traders open and close all their positions during the same trading day—nothing is left to sit overnight.

This strategy is all about finding small daily price fluctuations, buying low, and selling high. Slow but profitable! Just few of them but I want to start trading. So I need advices. What should I do? Hello Gracien. Welcome to the site and to trading. Hopefully this will help you and others. Find something that makes sense to you. I can recommend one or two systems. Second, you need to prove that your chosen system is profitable in the long term. You do this by taking at least demo trades.

Depending on the system, you can do these trades through backtesting. I recommend doing this whenever possible because it will give you months or even years of experience with your system in only a few hours.

Some systems may only give accurate results through forward testing live market demo trading. For instance, a system that relies on news releases will have to be forward tested.

Note: For backtesting in MT4, simply hit F12 to move forward one candlestick at a time. Alternately, you can use Forex Tester for a more realistic backtest. There is a free version with limited functionality. I recommend using this if you can.

Gaining confidence in your system is key. You need to trade with an account small enough that you will not be devastated to lose the whole thing, but big enough to cause emotional pain after a loss or losses.

So figure that out first, then get started on this phase as soon as possible. Take your time. You will be much more profitable in the future if you do. If you do these things, you will be miles ahead of the majority of traders.

I hope this helps you. Or those figure are just to take the pressure off and have more reasonable figures? Good question. These limits are intended to keep realistic expectations. However, I have NEVER been able to hit my daily cutoff every day of the week.

This article is still here to give new traders a better understanding of realistic expectations from the market, and to remind them to use wise money management. You have to take what you can get. Hope that helps. I am not expecting to multiply my account by 10x or x in a couple of months. By the way, what kind of strategy you follow, price action or a couple of indicators, if you are into PA, do you think it is worth getting into harmonics or just keep it simple and look out for patterns?

The idea is to gain complete confidence in your system and trading abilities. Also, if £ is not a great deal of money to you, you can risk more and shoot for more, with the idea of building up the account to a meaningful amount of money. You cannot carry on like that forever. Another point that I would like to make is that aiming for a monthly or weekly goal that is too high means you will have to increase the frequency in which you trade.

Most traders think they will make more money by just taking more trades. That is patently wrong. Ask any experienced trader. In essence, trying to force more trades than your system is giving you is a problem, while taking only the best trades from multiple, profitable systems or strategies can logically help you reach your goals.

To answer your second question, my strategies have changed over the years. In the Forex market, I prefer PA strategies the most. I prefer to take daily candles swing trading , because of the time freedom and the strength of the signals. However, I will drop down to the 1H or 4H charts from time to time, for certain strategies. If I add an indicator, it is to spot divergence.

If you think harmonics, or any other technicals, will give you an edge, test it to death. If it works for you, use it. I prefer to keep PA as simple as possible strong signals, horizontal levels, trendlines, etc. I set my target to 2. The risk is The system works fine in downturn and flat market. But in bull market, some time I reach my target too easy, and I cannot hold the temptation to set my sell order price higher.

What is your suggestion on this? Should I restrict with my trading strategy or give it a room when market is good?

If you really want to try to milk the market for more during the strong trending periods, you might try to exit only half of your position at your normal target or use two separate orders. Obviously, you should backtest or demo trade any new strategies — including exit strategies. Try different combinations of risk to reward ratios, break even stops, etc. Testing is key.

First of all. I like your responses to previous comments really much, anyway. I have a question. Which is e.

I dont understand this. Thanks for the kind remarks. Let me say it another way: You would predetermine a logical place to put your stop loss, and buy the correct amount of shares for stocks or contracts for options, e-minis, etc. I try for profits of Is this considered good? Is that good or average? Thank You. Hey William. Good is a relative term. Good for whom? In another year or less, that 19K could be 40K, then 80K, and so on. Once you get it, no matter what the gain, it becomes exponential.

The next 10K should be easier to come by then the first 10K. Hi Chris I really like the way you think, from your risk management to your earning expectations. However, I have not started trading yet, but I have been studying a system for the last three months and I am ready to look for a broker.

I live in the U. and I understand that I need a U. broker that offers a demo. Also, the system that I am studying uses the MT4 platform.

My dilemma is that I can not get anyone to recommend a broker. I have read many stories about brokers that become sharks. I have complete trust in what I am studying and I feel that I can trust you.

Therefore, would you recommend a broker? If you cannot publish a name in your newsletter, perhaps you could email me. Thanks for the kind words! I have no problem recommending a broker. I have used a bunch of them. I can only tell you who I use — take it or leave it. Until recently, I was using FXCM. Due to the recent news, and FXCM being kicked out of the CFTC, I will probably move to OANDA.

I have two demo accounts n have read info on it. N watched some tutorial videos. U talked about back testing which makes sense to do Put it this way I just need to learn what about stragies n how to understand it all. Could u direct me to a good place to learn what I need to learn. Hey, Julie, sorry for the late response. I have a free price action course on this site that you might find useful.

I only recommend one of them Day Trading Forex Live on my this site because it was very helpful to me. hi chris… hope you r doing great.

i would like to ask about trusty broker for middle east or south asians countries. i have been trading for one year now but didnt find reliable broker. and the second question is.. what does it mean that broker is regulated? i mean if someone deposit his hard earned money to the broker…. and if there is something happens like alpari did few years ago… so how can one be atleast get their money back from regulated broker?

waiting for your swift reply.. thanks jawad. I have limited experience with brokers outside of the U. As for your second question, not all countries are regulated the same way. Different countries require different things from brokers in order to be regulated. Then find out whether or not the potential broker you are researching is regulated by those agencies. It all depends on the circumstances and the regulations in your country. Many professional traders keep only half or a third of their trading capital with their broker.

They leave the rest in a savings account, but trade as though all of it is with their broker. This is the method I prefer. Other traders split their capital between brokers, but do the same thing that I mentioned above. The advantage of this second method is that you can split up multiple open trades between brokers as well. Good luck. thanks chris for your quick response…..

i got your point. thanks alot….. you gave me useful idea of splitting capital… but one more question…plz reply this … is ecn broker really good for retail traders? if yes then how to identify a true ecn broker? ECN is the way to go. You just need to do your due diligence in researching your broker.

Start by reading your broker agreement. Also, true ECN brokers have no dealing desk. They will allow scalping. They will have no restriction on where you can place your stop loss or take profit. They will not have a fixed spread. There are more ways to determine this, but these tips are the most obvious.

Hey Chris i really enjoyed this article is very helpfull. I like the theory of this plan, but do you think it can be done? Also I have trouble finding the correct graphic to look at I think 5m would be fine and how long should I be on the market, per trade.

Thank you! As far as time frames go, the more meaningful setups always occur on the higher ones. Sometimes losing traders can become profitable by switching to the Daily time frame or higher. Thank you for your response Chris! Also I see internet i full of crap, since everyone is trying to sell you THE system to get rich.

I completely understand what you mean. I went through the same thing and lost a lot of money before I found something that worked. You need to know that it works for sure. Of course, that means you have to start with a good system, but testing is just as important. Not many traders can do that, or at least not for long. I only have an account there to run the Trade Tests for this site. I used to have my live account tracked there too, but when I switched brokers, I never bothered to get it set up again.

Myfxbook is only used because nobody would actually accept my personal trading journal as proof that a system works. Hi Chris, Loved the article. What do you think is the easiest system to pick up? Do you recommend sticking to a few reliable pairs or a lot of pairs to find set-ups? Either way, which pairs? Also, do you think a reward to risk of is easier to achieve in shorter time frames or swing trades? Day Trading Forex Live is profitable and easy to learn.

The community, ongoing daily support, and live trading room really help new members get up to speed fast and trade the system correctly. I also like to trade price action. Price action trading is great and it can be used in combination with other trading systems. However, price action techniques take lots of screen time to become proficient at. I would say that a reward to risk ratio is easier to achieve on the Daily chart because the spread is typically a smaller portion of your risk the higher you go up in time frames.

Why would I not use the free MT4 and make some money instead of being on a subscribed charting software? This led me to Forex Gemini Code FGC which to me was a disaster. I realized Alaziac was just a marketing firm for a lot of sweet talk marketers of new systems for newbies and the annoying thing is that they charge high for these non-profitable systems sold on market high pitch. I later came across Top Dog Trading as well but the scare of FGC had not allowed me to make the move, though I kept taps of TDT.

I realized I was hooked to MTI based on their Fibonacci tool. I searched for a tool that would give me the Extensions without me having to place it opposite the direction as is defaulted on MT4. I became successful in this by imputing negative numbers and levels into the MT4 Fibo tool after working them out.

I tested this over and over by spreading the default opposite and the levels coincided. When I came across your Fibo tool adjustment article and the one you gave from another source, plus the fact you have reviewed TDT positively as well as stated how horrible FGC performed, I realized this was a fellow trader one should give a high consideration of trust to.

However I was even more impressed by your recommending DTFL and IP as better than TDT. Can you also help review a system called [removed]? I wait to hear from you. Wow, Zat! Your story really paints a picture. I looked into MTI myself, BTW, but never pulled the trigger. I know the feeling of getting burned by slick marketing.

Forex trading is all about timing. You time your trade entries and exits. You set stop losses to exit bad trades and profit targets for good trades. Apart from helping to secure your profit, setting targets is also important because it enables you to eliminate emotions from your trading. Without further ado, let's get into the seven common ways to set profit targets on your forex trades.

Well, it appears to be mostly true. And that is why you can set your profit targets using it. But how? You choose one of the closest support or resistance levels as your profit target. In the image below, the trader opens a trade at a resistance level and takes their profit at the support level.

The auto support and resistance indicator can be a helpful tool for this strategy and was used in the image above , as it automatically displays the support and resistance levels on your chart. This makes a lot of sense, as it helps you trade objectively without making emotion-inspired decisions. Forex has many chart patterns.

And often, these patterns have their predesignated take profit targets. Take the Heads and Shoulders pattern , for instance. Once it forms on the chart, you measure the vertical length from the base to the top of the Head. This number of pips is where you set your profit target. This is where partial trade closing comes in. Partial trade closing allows you to take some profit off the trade while you leave some to continue to ride the trend in your direction.

And when the price hits this profit target, take a percentage of your profit off the trade. Then move your stop loss to breakeven or anywhere close to your target. Moving your stop loss to breakeven and away from the negative side assures you never lose a trade you already won. How then do you know when to finally secure all your profit and quit the trade? You may use any of the strategies above to set your terminating price target, or you may refer to the next strategy below. This method is very similar to the partial closing strategy above.

The difference is that after the price hits your first target, you set a trailing stop loss. The placement of your trailing stop loss depends on you and your trading strategies. But the general rule is that you never set your trailing stop loss too close to the price. This way, the market has enough space to make a temporary pullback before going in your direction again. Fibonacci extensions use calculations based on the Fibonacci sequence to show potential profit target levels.

They differ from Fibonacci retracements, which, in turn, show you where the price is likely going to pullback to. When using Fibonacci extensions, you can set targets at each extension level and take some of your profits off the trade as the price hits your targets. Although the This profit target-setting strategy is best for trend traders who want to continue riding the trend as long as it exists. You draw your trendline and wait for the price to break out of it before you exit your trade.

In other words, the breaking of the trendline is your target. The Stop loss clusters indicator shows you where a huge volume of forex brokers have set their stop losses. But why do you need this information? The price tends to make quick pullbacks to these levels; it then catches the stop losses of these traders and forces their trades to quit. You can use this information to place your stop losses in better positions when you have the tool to tell where traders may get stopped out prematurely.

You can then avoid getting caught with your pants down when the price hits the stop losses of others. But how do you use the stop loss cluster to set profit targets?

You place your profit targets at stop-loss cluster levels in the direction of your trade, as in the image above. Emotions could cause you to make the wrong trading decisions that could cost your entire capital. But these targets can only help you if you allow them to. December 27, How to Set Targets in Forex and Lock In Your Profits Trading Tips 2. Related Articles. What's Next? Learn basic Sentiment Strategy Setups.

That may change in the future. Well, it appears to be mostly true. I watch the bond rate differential closely compared with the DXY. I started trading back in and after a couple of years of modest success, I moved to the stock market because trading spot forex became illegal in my country. Support and resistance lines in range trading. This means you can borrow up to 10 or even times your account balance and make a trade. Target Trading: When should you walk away?

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