Understanding the Ups and Downs in the Forex Market

The experienced traders know the extreme nature of the Forex market. They never rely on cheap emotions as it cost them money. On the contrary, the rookie traders in Australia depend on their emotions and gut feelings. They execute each trade with a valid reason. Make sure you have developed a perfect trading strategy before you start thinking to trade the real market. Once you have done that, it’s time to understand the ups and downs of the trading market.

Understanding the Ups and Downs in the Forex Market

Uptrend and downtrend

When the price of a certain asset starts rallying higher, we consider it as an uptrend. But never think the price shoots up without any retracement. In an uptrend, the price will often drop and against start rallying higher. The bearish drop is known as a market retracement. Similarly, when the price of a certain asset exhibits extended bearish rally we consider it a downtrend. In the downtrend, the price will often shot up and such movement is known as a bullish correction.

Long and short trades

The traders need to execute long orders at the end of the bearish retracement. For the short orders, they need to find the endpoint of the bullish retracement. The best way is the use the Fibonacci retracement tools. To use the Fibonacci retracement tools, you must use the best Forex trading account. Those who trade with a low-end trading account doesn’t get access to the robust trading platform. Thus they always faulty trading tools.

Now comes the trade execution process. Instead of trading all the important levels, you need to focus on the 50% and 61.8% retracement levels only. Look for price action signals and execute the trade with managed risk. Before you start trading the market with real money make sure you have demo trade the market for a few months as it will help you to develop your trading skills. Take your time and try to understand how this market works. Once you learn the nature of this market, you can execute trades in the ups and downs of a trend.

Dealing with the loss

Maintain a positive equity curve without having any ups and downs is impossible. The traders always lose money and due to their strong risk management plan, they recover the loss. If you look at the skilled trades, you will understand why the majority of the retail traders are losing money. The majority of people don’t know the perfect way to recover the loss. They take aggressive steps and trade with big lots. Eventually, they blow up the account. Instead of trading the Forex market with aggression, you need to focus on long term goals and trade the market with low-risk exposure. Accept the losing trades and look for the next signals.

Developing your confidence level

To deal with the ups and downs in the trading profession, you must develop strong confidence. Without having confidence it’s really hard to accept the losing trades. The majority of the retail traders are losing money since they don’t have the skills to protect their trading capital. They become emotionally unbalanced and start executing the trades without thinking about the long term goals. Before you start taking aggressive steps, ask yourself whether you are ready to deal with such a volatile condition of the market. If so, try to trade with a small investment and focus on the development of your trading skills. Create a simple trading technique so that you can make a profit at any market condition without taking too much risk. Think about the long term goals and forget about the losing trades.


Successful traders always think about the safety of their investment in the Forex market. They never break the rules. They keep on learning new things about the trading profession so that they can fine-tune the trading strategy without having any hassle. Think like a successful trader and you will get better at trading.

Print Friendly, PDF & Email

About Dequiana Jackson

Dequiana Jackson, Founder of Inspired Marketing, Inc., helps overachieving women entrepreneurs conquer limiting beliefs and create marketing plans that win. This includes one-on-one marketing plan development, digital product creation, web design and content marketing. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog, Entrepreneur-Resources.net.

Check Also

5 Types of Forex Trading Strategies that You Can Use

There are plenty of forex trading strategies and techniques out there. This at times can …

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge