Avoiding These Signals Is to Avoid Losses!

As for the competence in forex trading, being professional in one to two techniques is better than being a Jack of all trades, and protecting yourself from unprofitable signals is superior to finding trading signals everywhere. Therefore, WikiFX has summarized signals leading you to failure herein for your reference!

Reversal signals of RSI

Many traders prefer to use the relative strength index (RSI) for operating reversed transactions as it is relatively simple. They believe that RSI will see trend reversals instantly when it reaches the peak or the trough. This is true under the context of horizontal price movement or resistance/support levels whereas RSI cannot display the price momentum immediately in face of a trending market or breaking news as its signals are most reliable when they conform to the long-term trend. As such, adding positions all the time will trigger hefty losses!

Reversal signals of hanging man candles and inverted hammer candles

When trading is based on reversal signals, including hanging man candles and inverted hammer candles, traders should wait for the horizontal price movement to choose appropriate levels for entry instead of trading against the trend.

Insider bar with shadow

If the insider bar forms at the resistance level, the overlong lower shadow should be avoided, which is indicative of the existing upward momentum. Similarly, the insider bar formed at the support level should avoid the upper shadow being too long.

Bollinger Bands lying close together

Traders are well recommended to stop trading under this circumstance that is an indication of a deadlock between long positions and short ones, or the reduction of trading volumes, which may be followed by changes in the price action. Please wait and see or find more lucrative markets to trade.

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