Start
by
selecting
a
time
frame.
A
daily
chart
can
show
larger
trends,
while
shorter
time
frames
like
15-minute
charts
are
more
suited
to
quick,
intraday
moves.
The
key
is
to
spot
clear
price
movements
that
indicate
an
established
trend.
A trend isn’t always smooth, though. Prices often take temporary pauses, known as retracements. These short-lived pullbacks can be a good chance to enter the market at a better price. For traders with patience, swing trading—holding positions for days or weeks—is another way to ride trends and target bigger gains without the constant pressure of monitoring the market. In this article, Kar Yong Ang, a financial market analyst at Octa Broker, talks about the importance of understanding market momentum to maximise the potential of this strategy.
Counter-trend
trading:
spotting
reversals
Counter-trend
trading,
or
contrarian
trading,
is
a
more
advanced
approach.
Rather
than
following
the
market’s
direction,
this
strategy
focuses
on
identifying
moments
when
the
market
appears
overstretched,
signaling
a
potential
reversal
on
the
horizon.
This approach can be riskier because it involves going against the flow. Timing is everything here. A contrarian strategy works best when there’s a good reason for a reversal, such as an asset hitting a historically high price or major news suggesting a market shift.
For instance, if a currency pair spikes significantly, traders may expect others to start taking profits, leading to a pullback. The trick isn’t to aim for the entire reversal but to capture smaller, more achievable moves. However, this strategy demands precision and a strict risk management plan, as predicting reversals can be tricky.
Trading
the
news:
seizing
opportunities
News-based
trading
takes
advantage
of
the
market’s
reaction
to
major
events,
such
as
economic
data
releases
or
political
developments.
This
strategy
is
straightforward
in
theory
but
can
be
difficult
to
put
into
practice
due
to
the
speed
at
which
markets
react.
Events like interest rate announcements or employment reports often trigger sharp movements in currency pairs. For instance, a positive jobs report from the U.S. Federal Reserve might strengthen the dollar, creating opportunities in USD-based pairs like EURUSD or USDJPY.
The key to success here is preparation. Traders should keep an eye on economic calendars and know when major announcements are due. But be cautious—news can be unpredictable, and markets don’t always react as expected. Setting clear entry and exit points is critical to avoid unnecessary risk.
The
importance
of
risk
management
Regardless
of
the
chosen
strategy,
risk
management
serves
as
the
foundation
of
successful
trading.
Implementing
stop-loss
orders,
managing
leverage
carefully,
and
maintaining
diversified
exposure
are
essential
measures
to
safeguard
trading
accounts
during
periods
of
market
unpredictability.
By sticking to a solid plan and being disciplined with risk management, traders can improve their chances of long-term success. Strategies may vary, but the best results come from consistency and thoughtful execution.
Trading isn’t about luck—it’s about preparation, patience, and the ability to adapt. These strategies offer a starting point for traders to refine their approach and navigate the ever-changing Forex CFD market.
Hashtag: #Octa
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