January 2013 was a very interesting trading month for me; I learnt more in that month, than all my months of trading combined. I learnt to SEE the trend. This might seem funny to a lot of traders, because most traders open their charts and can tell easily if the market is bullish or not. The essence of this article is to share my trading setup and some trading tips which have helped me become a better trader.
Before I begin, there are some basic trading principles which we must consider.
The markets trend and they can trend for several weeks or months.
The best place to enter a trade is after a trend has been confirmed; this would probably mean placing trades in the “middle” of a trend.
When the trend is up, we buy dips and when the trend is down we sell rallies.
The Golden Cross is a very popular trading concept used for generating trading signals. The signals are generated when a short-term Moving Average (MA) crosses over or under a long-term Moving Average. Bullish signals are created when the short-term MA crosses over the long-term MA, while we get bearish signals when the short-term MA crosses below a long-term MA.
An example can be seen below; a cross between the 5-day…