Everyone knows that the chart pattern trading method is a pro-level trading technique. Very few people have the skills to identify the major chart pattern and take advantage of the market. People become restless and they intend to make a profit without even knowing how to spot the chart pattern. The top CFD traders in Singapore always trade with strategic steps regardless of their trading style. If they spot any major chart pattern, they become more cautious because they know big money is on the line.
So, is there any secret formula to trade the chart pattern? Can we create a super trading system that will help us to gain insane profit? Sadly, we don’t have such a formula. But we can offer you a series of tips that will help you trade the major chart pattern with a great level of success. If you can stick to this method, you can expect to make big gains without having any major trouble.
Supply and demand
Before you go to the chart pattern trading technique, you must understand the law of supply and demand. When the price tends to rise steeply don’t expect it will rise forever. The demand for that particular stock will fall as soon as the supply increases. As a result, the price will eventually fall. Similarly, when the price falls sharply the supply will fall. Eventually, the demand for that asset will rises causing a strong rally in the price. Being a new CFD trader, you should know how the supply and demand works. In layman’s terms, we can say you have to get a good idea about the support and resistance level. So, why do we need a good idea about the support and resistance level? The reason lies within the breakout technique in the chart pattern. When we talk about the chart pattern trading strategy, we refer to the breakout trading method. So, if you lack knowledge of the law of supply and demand and the level in the market, you will lose money.
Major chart pattern in the market
If you trade with Saxo capital markets PTE, you will get the premium platform. So spotting the major chart pattern will be an easy task. On the other hand, if you trade with a low-end platform, it will be tough to spot the major chart pattern and you will lose money most of the time. Start with the head and shoulder chart pattern. After learning about the head and shoulder chart pattern, you have to focus on the inverse head and shoulder chart pattern. Both of these patterns help you to take trades in a major reversal.
New traders should not start with the reversal chart pattern even though it provides a powerful way to make money. They should rely on the continuation chart pattern. For instance, the triangle and the rectangle pattern can provide a powerful means to take quality trades. Spend some time learning these patterns as they occur frequently in the chart.
Deal with the daily and the weekly chart
As a chart pattern trader, you should deal with the daily and weekly chart. If you take the trade in the hourly chart, it will be a tough call to make a profit. People always think they know a lot about this market. But if you do the math, you will slowly learn to take the trade with discipline. This will give you an idea of why the higher time frame is better for chart pattern trading strategy. In the higher time frame, you will be able to execute quality trades with a high level of precision. This will give you a better chance to avoid a false breakout.
Be careful about the false break while trading the major chart pattern. You can rely on the price action signals and learn more about the conservative trading technique. Use some indicators to assess the breakout pattern so that you can trade with more confidence.