BMET Demand AND Requirements Are Up

The difference between a trader and a fader is primarily their entrance and market momentum. The traders usually wait for the market to gain momentum in some direction and then get in to ride some of that movement before it ends. A fader will use a solid understanding of cost barriers to decide the end of a run and buy/sell in the opposite direction to catch some of the retracement. Traders will usually live by the mantra, trade with the trend, the trend is your friend which is not a bad idea, and believe it or not, you can be a fader and trade with the trend.

Asking you what trend we were in right now on a particular pair would be an unfair question, because more than likely we are in an upward trend, of a larger downward trend, of an even larger upward trend and so on. The direction of the trend just depends on the scale of your trade. Faders trade with the trend by finding the turning points as they hit the bottom of an upward trend. Simply taking trades off of the bottom trend line of an upward trend does not make high probability trades.

An experienced trader incorporates several other possible tools and factors to decide the strength of a certain price level. For example, let's say the cost was getting to the lower trend line of a trend going up, the trader would notice that the point where the trend ine intersects would land right on a psychological barrier of 00, and also happened to be the 62% Fibonacci level of retracement of the past move going upward. Noticing both these conditions, the trader has a much higher probability of executing that trade.

One of the benefits of being a fader is that once you have fine tuned your entries you may have a much smaller effective stop loss, thereby letting yourself trade more lots and not put more of your account on the line. So when you make good decisions you make more cash for every pip. Another positive is that you may place your stop losses outside of the places that the currency has been recently; above resistance, below support or behind some barrier of price. If you are putting your stops at price levels that the currency has been recently then there is not much keeping it from going there again, it is still in its comfort zone. Most of the techniques that I have designed and trade are based on the fader's way of trading. When I do lose, they are small losses and easy to win. However, when I win, I usually have a positive risk/reward ratio and pull a healthy profit from the market.

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