If someone wants to be a successful trader then he should be aware of the technical terms of Forex. He should build or find the forex strategies according to his trading style, we are talking about the technical forex strategies or the unique method to read the charts of Forex. Graphs of product presents the visual stats and technical trader can predict next move of market with the help of his strategy or by combining different tools.
Moving average convergence and divergence is the most common indicator. This is very helpful for traders to measure the pressure or the divergence. Traders use MACD in different ways but we will tell you the most effective method.
This strategy is for every product but on commodities, its way more effective. Especially on Gold or Crude oil it could be home run.
Now we will teach you this strategy in steps from beginning to the execution of trade:
Step 1: Prepare chart
Just open MT4 or any other platform and insert the MACD with default values. Now insert moving average of 12 in larger time frames and 25 in small time frame. Make the support and resistance levels with the help of indicators.
- Open MT4 or other platform
- Go to indicators and put MACD on chart
- Place moving average on Forex chart
- Make support and resistance levels
Step 2: Understand the strategy or How to use
Now you have to wait until the market touch support or resistance level. When the price will be on support or resistance level then note the reading of MACD. You can’t put trade when market touch the support or resistance first time, you just need to note the market rate and reading of MACD on the level. Wait for some time when market will retest that level then you will see the rate and the reading of MACD and compare with the first attempt of price action when market touched that point earlier. If the value of MACD decreased then it is going to sell and if value is increased then hope for high rates or buy.
- Wait for support or resistance
- Note the value of MACD on support or resistance
- Wait for second retest of price on support or resistance
- Note the value again
- Compare the previous and new value
Step 3: Execution of trade
When the market is on the price action level or support and resistance level or the situation is according to our strategy then just put the trade by assigning take profit and stop loss.