Forex encyclopedia

One of the main qualities for a Forex trader is Patience. We should stick to a trading plan and control our emotions every day. We should not plan to take all from the market, we are here for a small piece from the price fluctuation. It is very difficult to stick to this attitude, but practice makes perfect. Once we keep on doing the same, our subconscious mind would automatically place the right order. Do not pressurize yourself or fix any targets in trading. Just trade and stick to your plan. Your mind should be fixed and never panic thinking about something. Making a consistent profit in first few weeks and losing everything at end of the month makes no sense.

A number of reversal patterns is indicated in Forex: Head and Shoulders, Double top, Double bottom, Triple top, Triple bottom, Diamond. Head and Shoulders Top – is a classical reversal pattern of technical analysis, which is formed following to a long upward trend. The model is considered to be fair reliable and is often formed. But despite above-mentioned, many beginning traders do not manage to take profit using this graphic pattern. The reason is that positions are opened prior to forming this model. Let's figure out the structure of the figure and its formation on the chart of trading terminal. The model consists from three subsequent price extreme points, the middle one is higher than others (head), and the rest two are below the middle one and are roughly equal (shoulders). All three uphills are supported by the neck line.