Learning to use the indicator in the lower time frame

Indicators can be a fascinating tool for novice traders. Those who have truly mastered the use of the indicators can easily find false trade signals in the market. Sadly, most novice traders overload their charts with too many tools and lose a big portion of their capital. Being a human beings, it is not possible for us to process too much information in a volatile market. We must learn to create a simple trading environment and only then we can become good at trading.

In today’s post, we are going to learn some amazing techniques by which we can use the indicators in the lower time frame. Make sure you read this article very carefully as it will change your life and let you trade in a better way.

Trade the major pairs only

The price movement of cross pairs in the lower time frame is very unstable. It becomes nearly impossible for retail traders to find the right trade signals in the market. That’s why you should always choose to trade the major currency pairs in a lower time frame. The price movements will be much more stable and you find much better opportunities in the market. You might be thinking that trading the major pairs can limit your profit potential but in reality, it limits your risk factors at trading. However, if you still intend to use the indicators to trade the cross pair, we recommend you to use them in the demo environment. First of all, you should make yourself comfortable with the cross pair’s price movement. As you learn more about this asset, you may take the trades in the lower time frame.

Learn the functions of the indicator

You must learn the functions of the prominent indicators used in the trading profession. Without learning about the key functions of the indicators, no one should try to trade with real money. Things might seem very challenging at the initial stage but once you learn to take your trades in a better way, you will realize the importance of knowing the functions of the indicators. Those who trade bonds online know a lot about these indicators. They never take their trades without doing the proper data analysis. To ease the overall process of trading, we strongly recommend that you learn to use simple indicators first. Once you get comfortable with the simple indicator, you may use the complex tools.

Modify the settings

At times you need to modify the settings in the indicators to find the best possible trade signals in the market. The rookies often mess things up and expect to make a big profit without changing the value of the indicators. Some indicators need to be changed based on the functions of the trading strategy. For instance, you can’t use the moving average with default period 9 to find reliable trade signals. Based on the conditions of the market and your trading technique, you must bring positive change to its settings. Once you do that, you should back-test the performance of the indicator in the paper trading account. If you feel confident with the new settings, you may keep on using them.

Trade with low risk

When you will use the indicator to trade the lower time frame, make sure you trade with low risk. You should never trade the market with high risk as you never know the outcome of the trades. As you become skilled with the trade execution process, you will slowly learn to take the trades in a better way. You will eventually learn the proper way to manage your risk profile. Moreover, it will make you a confident trader and let you deal with the critical states of the asset. So, learn to lower down the risk factors in every trade as it will keep your fund safe.

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