Understand The Techniques Of Trading Strategies

Understand The Techniques Of Trading Strategies

What is STA Strategy?

The Stop-Trail-Add (STA) Strategy is a scaling technique used to maximize profits while minimizing risk. This idea is to take advantage of a favorable price action by adding to a position but still limiting the risk by moving the stop loss. It is usually expressed as the S-T-A ratio.

Three Letters Stand for:

1. The size of your initial STOP loss in pips.

2. The size of your TRAIL as a ratio of your original stop.

3. The units that you ADD as a ratio of your original position size.

How to Determine the size of Stop-Trail-Add?

The Currency pairs have unique behaviors, so the size of the Stop-Trail-Add should be appropriate for the pair you are trading. You don’t want to get stopped out too early with a uber tight STA, knowing that you could catch the move with the larger STA.

One way to determine your Stop-Trail-Add is to experiment with the pairs that you regularly trade and keep track of the STA sizes that would be profited. Through a consistent and deliberate practice that Dr. Pips low always recommends, you’ll be able to gauge which STA works for your favorite pairs.

Another way to determine your Stop-Trail-Add would be to use the pair’s average true range (ATR). This also depends on whether you are in a day trade or a swing trade.

What is an Average True Range (ATR)?

The ATR measures the usual pairs range based on the lows and highs of previous price action. It comes with the parameter X, which determines how far back in previous price action you will go. For instance, if you are using ATR (10) on a daily time frame, the indicator gives you the value for the pair’s average range for the past 10 days.

ATR can be used to determine support and resistance levels for the day or the week.

How to calculate the weekly and daily ATR?

You don’t have to worry about the calculations as there’s an indicator that would churn out the figures for you.

Just you have to make sure that you know what the ATR is measuring and what the parameter stands for, and then apply that ATR to the proper time frame.

To get the DAILY ATR, values on the DAILY time frame and divide it by two. Add this figure to the DAY open price to get the top of the day range and subtract the same figure from the DAY open price to get its bottom counterpart.

For the WEEKLY ATR, values on the WEEKLY time frame and divide it by two. Add this figure to the WEEK open price to get the top of the week's range. Then, subtract that same figure from the WEEK open price to get the bottom of the WEEK’s range.

7 Tricks Every Forex Trader Can Follow

7 Tricks Every Forex Trader Can Follow

The best traders set their skills through practice and discipline. They perform self-analysis to see what drives their trades and learn how to keep fear and greed out of the equation. In this articles, you find some tricks that will help you make smarter, more profitable trades too.

1. Define Your Goals

Before you began out on any journey, it is important that you have some purpose of where your destination is and how you will get there. Consequently, it is essential that you have clear goals in mind as to what you would like to achieve.

2. Choose a Compatible Trading Style

After setting your goal, then you have to set your trading method is capable of achieving your goals. Each type of trading style needs a different approach, and each style has a different risk outline, which requires a different position and approach to trade successfully.

3. Choose a Broker

It is important to choose a broker who offers a trading platform that allows you to do the analysis you require. Choosing a reliable broker is of paramount importance and spending time researching the differences between brokers will be very helpful.

In choosing your broker, it is important to know your broker's policies. Also, make sure that your broker's trading platform is suitable for the analysis you want to do. A good platform with a poor broker or a good broker with a poor platform can be a problem. Make sure you get the best of both.

4. Carefully Choose your Entry and Exit Time Frame

Many of the traders get confused because of conflicting information that occurs when you look at charts in different time frames. What shows up as buying opportunity on the weekly chart could, in fact, show up as a sell signal on an intraday chart. Consequently, if you are taking the necessary trading direction from a weekly chart and using a daily chart to time entry, be sure to synchronize the both. Keep your timing in sync.

5. Focus on Your Trades and Learn from Small Losses

Once you have funded your account, the most crucial thing to remember is that your money is at risk. Hence, your money should not be needed for living or to pay bills. Consider the trading money as if it were vacation money. Once the vacation is finished, your money is spent. Have the same attitude toward for the trading. This will psychologically prepare you to accept small losses, which is key to managing the risk. By focusing on your trades and accepting and learning from the small losses rather than always counting your equity, you will be much more successful.

6. Build Positive Feedback Loops

A positive feedback loop is created as a result of a well-executed trade by your plan. When you plan a trade and then execute it properly, you form a positive feedback pattern. Success breeds success, which in turn breeds confidence especially if the trade is profitable. Even if you take a small loss but do so by a planned trade, then you will be building a positive feedback loop.

7. Keep a Record Book

Maintaining a record book is a great learning tool. Print out a chart and list all the reasons for the trade, including the fundamentals that affect your decisions. Mark the chart with your entry and your exit points. Make any appropriate comments on the chart. File all the record so you can refer to it over and over again.