In today forex faq, we are going to address 2 questions from one of our fellow traders.
Below are the questions
I am intermediate trader but still losing on my trades.
- In cci indicators, is it, it will give the exact signals? or it also can be opposite direction i.e when the signals downtrend,the price will go uptrend
- What do lower lows and higher lows mean?And also trend line break means?
First of all, no matter which experience of trading you are, you will always be losing some trades. Even those professional traders in the bank are losing trades. Therefore you need to realize that it is impossible to win every single trades in trading.
What we are seeking is the profit and not the winning percentage. As long as you have a good risk reward ratio, you will always be profitable even when you have strategies that only wins 50% of the time
1) You can never be profitable if you plan to rely on the entry signal from one indicator as there are a lot of false alarm signal given by indicators.
A good strategy is one that has a precise entry and exit signal plus it has a false alarm reduction techniques to help you identify false alarm signal from your indicators so that it will increase your winning percentage.
There will be times where you see the CCI indicator giving you a SELL signal but the market moves up. That is why you need the help of price action plus other indicators to help you formulate a solid strategy to trade with.
2) Take a look at the picture below, the blue arrow shows you a high on the chart. If you take a look at the red arrow, is it higher than the one on the blue arrow. This is what we call the higher high.
The same applies for lower low.
When you see a lower low, it is a sign that the price is now in a short term down trend.
When you see a higher high, it is a sign that the price is now in a short term up trend.
A Little Trading Tips for you
When you see higher high on the higher time frame like the 4 hourly chart. What you can start to look for is a BUY opportunity on the lower time frame.
A short term up trend on the 4 hourly chart can last quite some time on the 15 minutes chart.
I hope that I have answered your question and do let me know if you have any question