Following these tips in demo mode will mean you are learning something handy and passing the time without being almost convinced to leap into a real trade when the conditions are not right. Something like that may have some bizarre effects and it’s better to leave the market alone for a couple of hours. Are they converging? This can mean a breakout is coming. You can place orders outside of the range of the lines, a buy order in case the price breaks much above the lines, and a sell order in case in breaks below. Check 1 other indicator before acting. On the other hand, if the support and resistance lines are approximately parallel? If so , you can expect the market to turn when it reaches them. This can be a first signal for a short day trade.
Consider whether there are any other related currency pairs and if this is so take a look at what is happening with their prices. Do they support your proposed trade? For instance, there’s often an inverse link between EUR/USD and USD/CHF, so that when one is falling the other will rise. EUR/GBP and GBP/CHF have an inverse relation too.
It is vital to exit as fast as your profit target or stop loss fires. So do not become distracted, but watch the market conscientiously. Foreign exchange currency trade strategies in a troubled market are always going to involve short term trading.
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