Forex Trading Signals to Avoid

Forex Trading Signals to Avoid
By [http://ezinearticles.com/?expert=Tim_Richau]Tim Richau

It is easy to think in realistic terms, but in Forex trading, those "real" world thoughts are not so realistic and not so much a reality. Forex is not a world where equations are the same. More doesn't mean more and in Forex trading it is easy for traders to overlook what they want to avoid. Just as understanding and knowing prime set-ups, it is equally important to understand and know the dog trades to be avoided.There are common trades that would be best to avoid for new traders, and sometimes all traders. If your strategy is a price action trader, you will likely be familiar with the set-ups. Get to know the set-ups and understand that they are set-ups I do recommend leaving alone.

The Reversal Signal Buried Away in Price

This can play havoc to a trader. It is a price action signal that forms in traffic. These signals do not have the edge on the market that large signals have. You'll find reversal signal buried away in price. They can stick out or not stick out and will show different positions. You want to look carefully at the charts and understand the signals and their position.

Incorrect Swing Signals

When you begin to learn trading, the signal from the incorrect swing is tough to learn. We have some key points to share with all traders when you do a reversal signal trade:

1. When you trade reversals, you will need to enter the trade picking price to "reverse"

2. You will not be able to trade a reversal as a continuation

3. A price swing isn't determined by a specific numbers of candles

4. A single candle in not a price

The toughness of trading reversal signals is that you'll often enter market areas were the big boys are reaping their profits when you trade from the incorrect swing points.

Wicks on the Other Ends of Pin Bars

When you see a Pin Bar with a wick that sticks out, it is considered a good Pin Bar. But, you do not want the candle to show wicks on the other end of the good Pin Bars. A general tip here, you want to avoid Pins with large lower or upper wicks as they can create problems. The reason why is how they were created. You'll find that many times the wick was created due from the price being rejected from a level. Sellers then push the price back down, and the result is the creation of the upper wick. Wicks on Pin Bars can be very confusing and downright tricky. There is risk involved. You find that when you go to enter a trade with the Pin Bar there is danger as you can push the price back higher.

The Inverted Pin Bar

If you are new to learning Forex trading you may have been drawn to the Pin bar, which may prove to be difficult when first learning, and, unfortunately, something that most traders are drawn to when they first begin to learn. What is confusing about the Pin bar is where the best trading spot is. But, when from the right spots on the chart, it can be a reliable and powerful price action set-up. It needs to be the correct spots, however, or it will lose its edge on the market.

The inverted Pin Bar is the Pin that forms pointing the wrong way. However, it can be deceiving to read. As the Pin Bar sticks into the price instead of pointing away. In other words, the Pin bar doesn't stand out from a price to help your mind register to avoid it. It is confusing. Too often, the Pin Bar hints at price moving in the opposite direction than that of what they would normally indicate and this is the reason why new traders are gullible not the Inverted pin Bar. Traders need to know what the signals of the Pin Bar as they offer different signals that hint in different directions. And, when you trade from all Pin Bars, they must be traded from the correct areas on the charts.

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Article Source: [http://EzineArticles.com/?Forex-Trading-Signals-to-Avoid&id=8051537] Forex Trading Signals to Avoid