Many market commentators, analysts and mentors claim that markets are random and by association chaotic. If you get down to a granular level, they have a point; if you watch the movement of forex tick charts or one-minute time frames, FX market movements can look random, and you can’t possibly identify trends.
However, if you scope out to higher time frames, then the patterns look less chaotic. You can identify both past trends and potential trends developing. These trends won’t be random or messy; they develop due to market sentiment primarily caused by breaking news events or the results of the events listed on our economic calendar.
As examples, during 2020, the US election, the COVID-19 pandemic, and the UK Brexit were the primary causes of market movement. As these macroeconomic issues developed during the year, the major forex currency pairs reacted. On time frames of 4hr and above you can see the 2020 trends perfectly illustrated.
Market randomness can be predictable
The claims of randomness do have some truth. We might predict that if the UK Bank of England takes the base rate negative at their next monthly committee meeting, or creates another £250b of quantitative easing simultaneously, GBP will fall. We can’t predict (and this is where randomness comes in) by how far GBP might fall versus some of its peers. But we can use various trading tools to control our actions and make decisions to capture some of the market movements relating to the BOE decision.
Market orders take on many forms
Market orders aren’t just for taking initial trades; orders get executed each time you engage with the market. If you hit the buy or sell button to initially enter the market, set a stop, take limit order, or close a trade, you’re executing a market order.
You can use market orders to control your overall FX exposure, limit your risk per trade and put yourself in an ideal position to potentially take a significant proportion of profit out of the market movements you correctly identify. With market orders, you’re taking control of all your decision making, you’re waiting for the market to reach the levels you believe are critical, and trading on your terms.
How to use the previously mentioned market orders as a system to trade the markets
You might want to consider using orders to automate the nucleus of your forex trading decisions, and this is where your MT4 platform excels. Automating certain aspects of your forex trading will reduce your stress levels, allowing you to engage with the market more constructively. You can concentrate on perfecting your method/strategy and refining your money-management.
Early on in your trading career, you realise that trading FX manually on a full-time basis is a privilege reserved for a small percentage of our retail trading community. Unless you’re a wealthy individual, you need to generate enough income from day-trading to cover a revenue loss; you must pay the bills, which is why most retail traders develop swing trading skills. With swing trading, you can trade the FX markets part-time and still do your day job to the best of your ability.
However, if you use automation, you can still day trade when markets are open, without being chained to your laptop or smartphone. You can set your entry orders, stop orders, and take profit limit orders based on specific levels or round number/handles. Similarly, you can swing trade and use the MetaTrader MT4 platform’s alert features to make you aware of price reaching levels you believe requires action.
If you begin to utilise these primary forms of automation, you’re opening a gateway to progress your trading skills. The MT4 platform has a (relative) infinite number of automation and coding possibilities using the MQL language. With the creative use of orders through automation, while developing your confidence and competence in the MT4 platform, you’ll be taking your trading onto a new level. And you can take these steps today if you want to control every aspect of your trading.