Using a visual chart trading tool on the Metatrader 4 platform to confirm forex chart patterns serves as a verification as well as an alert tool. It is to inform the trader about an upcoming trade opportunity. Making money in the market isn’t easy as much of human nature is geared toward poor trading habits. Therefore, it is difficult to overcome the challenges resulted from the bad habits to become a good trader. Visual chart trading tools make trading less subjective and more systematic in process. This has helped traders in many ways of automation and making better trade decisions which are keys to higher trading performance.
Visual Chart Trading Tool Sets the Forex Trader for Good Trading Habits
1. Don’t enter a trade in the first 30 minutes of the day.
Specifying the time at which to accept a trade signal and refusing trade signal outside of the specified time can now be automated with the visual chart trading tool. We use it to define our market trading hours while leaving the work of placing trade entries or refusing trade entries to the software.
2. Pay a good price
When technical analysis research is performed on the charts, the trader can identify what should constitute as an attractive buying opportunity. However, we may not have the luxury to stay at the computer and wait for a particular price level that is considered a good bargain.
Hence, we use visual chart trading tools to draw lines at the bargain price points. If price is to reach the specified levels, the charting tool will place a buy or sell entry automatically on the trader’s behalf. This process ensures precise entry at a good bargain price and also prevent us from chasing after the market when a signal passes by.
3. Trade based on completed chart patterns
Patterns do not form overnight. They take weeks or even months to form. It is very tempting to enter a trade based on the supposition that a pattern will be completed. Thus, it is very tempting for a trader to get into a trade early on the presumption that the forming patterns may eventually be formed like the trader has perceived to be.
In other words, he wants to beat the crowd before they realize the pattern has been broken. However, an incomplete pattern isn’t a pattern at all. Pulling the trigger or getting into a trade too early may backfire several times that it simply not worthwhile for the risk to profit ratio.
We use the special visual chart trading MT4 tool to draw lines at those critical levels. When these levels are broken or market closed beyond these levels, software will alert us and should we program it to make an automated entry, they will perform the instructions accordingly.
4. Always trade with an exit plan
An initial stop-loss must be place at all times during a trade. This is a safety net for forex traders in a 24-hour market where any event may impact their positions in a short span of time. An exit plan is either being stop out or trade has hit its targeted price.
Although Meta-Trader 4 has basic features of placing stop-loss and take profit levels, its functions are too basic where only horizontal targeted exit prices can be specified. The visual chart trading tool allows us to draw any line with any gradient or slope and when price breaks or touches the pre-drawn line, will warrant a trade exit.