ETF Trading is a very challenging profession. Those who are making a regular profit in the ETF trading industry know a lot about the market. Sadly, the rookies start trading without knowing the basics. They expect to make a big profit and keep on investing their money. Eventually, they make their financial condition much worse before leaving the investment industry.
By learning about the basics of technical analysis, you should be able to trade in the ETF trading industry. But to trade like a pro trader you need to learn about the chart pattern trading strategy. Today, we are going to highlight the importance of chart pattern trading in the ETF trading business.
Helps you to secure big profit
Do you want to make a big profit from this market? If so, you must learn to deal with the major chart pattern. By using the major chart pattern you can easily predict the big market movements. But to trade the chart pattern you have to rely on the higher time frame. Higher time frame is a little bit boring and many novice traders consider it as a waste of time. They want to make a quick profit from this market by trading the lower time frame. You may make a quick profit but for that, you need to have extensive experience in the retail trading industry. Unless you are good at technical analysis, you should always try to trade the market in a higher time frame only.
Helps you to find the major reversal
If you ever look at the top traders at Saxo capital markets singapore, you will be surprised to see that they are trading the major reversal without having any issues. They can do so because they have strong knowledge about chart pattern trading. For instance, think about the head and shoulder chart pattern. If you learn about this pattern, you should be able to spot the bearish reversal pattern without having any problem. But reversal pattern trading is a bit risky and you should never look for the counter-trend trading method unless you are good at fundamental analysis. The reversal pattern should be merged with the fundamental data and only then you can expect to get better results
High risk to reward ratio
Securing a high risk to reward ratio in the trades has become a very challenging task. Most of the novice traders fail to maintain the 1:2 risk to reward ratio and thus the overall recovery factors become very hard. If you wish to pursue your career in the investment business, you must learn to trade with a high risk to reward ratio. By trading the market with a high risk to reward ratio, you should be able to embrace the losing trades. Most of the time the novice traders never give any importance to the risk to reward ratio factor. But if you do the math, you will realize giving importance to the risk to reward ratio factor is the only way by which you can protect the capital.
Ease the overall trading process
Once you learn the art of chart pattern trading, the overall trading process will become much easier. Some of you may think you can trade the market based on the trend lines and other simple tools. Though these factors can indeed help you to make money consistently, still you need to learn chart pattern trading. Chart pattern trading will provide you an advanced way to deal with the financial trading instrument. You will learn to think outside of the box and eventually taking the trades in favor of the trend will become easier. Moreover, you will develop the unique skills to learn from your mistakes. So without wasting your time, you should get a demo account and practice chart pattern trading techniques. Once you become good at chart pattern trading, you may trade with real money. But do not forget to keep the risk factors low in each trade.