🔷 1. Identify the trend
Use tools to determine the current trend:
Uptrend: Higher highs and higher lows.
Downtrend: Lower highs and lower lows.
Sideways range: Price moves within a horizontal range.
🔴 Indicators used:
Moving Averages (MA):
Crossing of the EMA 50 and EMA 200 (Golden Cross or Death Cross).
Trend lines: Draw lines along the swing highs/lows.
ADX Indicator (Average Directional Index): Measures trend strength (above 25 = strong trend).
🔷 2. Entering a trade
Buying in an uptrend or selling in a downtrend:
Entry signals:
Retracement to the moving average (like EMA 50).
Breakout of resistance (in an uptrend).
Candlestick patterns like bullish engulfing or hammer pattern (for buying).
Example of a buy setup:💥
Price is above the 50-period exponential moving average.
Average Directional Index > 25.
The Relative Strength Index is not overbought (>30) and <span (ATR) to calculate the stop loss based on volatility.
🔷 4. Identify profit-taking
Let winning trades run:🎯🎯
Use a risk-to-reward ratio (e.g., 1:2 or 1:3).
Or trail the stop loss using a moving average.
Fibonacci levels can also help identify profit-taking areas.
🔷 5. Risk management
Do not risk more than 1-2% of your capital on each trade.
Use an appropriate position size.
Avoid overtrading.
👉👉 Examples of tools and indicators:
✅ Exponential Moving Average (20, 50, 200)
✅ Relative Strength Index (14)
✅ Moving Average Convergence Divergence (MACD) (for momentum)
✅ Average Directional Index (ADX) (for trend strength)
✅ Trend lines and price action
😎😎 Tips:
Do not trade against the trend unless you are very experienced👍