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Wednesday, 15 May 2019

3 Effective Steps to Avoid Fake Signals

Just like learning to ride a foot, we must fall repeatedly before becoming proficient. Same with trading, often we are provoked by fake signals (fake signals) that ultimately bring losses. Well, let alone beginners, seasoned traders can still experience loss because of the signal of this deception. So that these errors can be minimized, here are 5 powerful steps to avoid them!

False signals generally appear when traders are studying the market with technical analysis of various indicators and / or price action patterns. These deceptive signals will tempt novice traders to open positions too early. Later, the price moves against this position and as a result, the acquisition of pips is minus alias losers.



3 Effective Steps to Avoid Fake Signals
Whatever your mainstay trading strategy and technical analysis are, here are 5 guidelines to minimize errors in dealing with false signals:

1. Use the Time Frame Daily
Basic errors often occur because the trading system settings are as simple as time frames. The choice of time frame determines the signal quality directly because the frequency of the appearance of the candlestick (bar) bar depends on the height of the time lag.

Fake signals will often appear at lower time frames (below h4). So just imagine if you use option M15 where each new bar will appear every 15 minutes. Price action patterns will emerge in low quality and your indicator will move up and down with high fluctuations. Obviously, the head will be dizzy facing it.

Double check signal quality by identifying the location of the support and resistance points. Reversal signals with good quality when approaching these limits. On the other hand, the continuity signal can also use the reference point as the confluence area.

3. Beware of News & Events
High-impact economic news can move prices without warning from any previous signal. If you catch a signal when or around the time of the news release, chances are that the signal is invalid in following market volatility. This was due to volatile market sentiment during the high-impact news release.

Therefore, you can use the forex calendar to avoid market conditions with high levels of volatility and risk. High-impact news will generally be characterized by three-star markers, three bull heads, red colors, and other highest scales.

Also Read :The most appropriate time for binary trading with seconds duration
Conclusion
Fake signals are actually the "natural" part of trading activities. It's just that the hours of flying and the skills of each trader will vary with each other in dealing with these false signals.The five steps to avoid fake signals above are just basic guidelines

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