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With a design meant for capitalizing the spike moves in currencies, the Memory of Price strategy aims to strategically predict bearish and bullish trend reversals. Aside from its over 50% accuracy rate, it is consistent in focusing on enabling the support and resistance levels of trades to influence the movement of prices. Regardless of any factor concerning the current market, the approach insists that the buying power of a trader as well as his investment can manipulate price action.
Short Trade
For short trades, the primary advantage of the Memory of Price strategy is that it offers a slightly positive reward. Should a trader feel risky and make a trade in an amount higher than usual, his odds are good. As he decides on his actions from records, the chance of him succeeding is raised - provided he is fully aware of the extent his latest investment can reach. In the event he doesn't, the impact won't be too severe as the trade was only meant for a short period.
Long Trade
Should each of his trade be listed, the Memory of Price strategy will benefit the long-term trader. Instead of trading currencies without any basis, he plans actions carefully. Consequently, this allows him to be more confident and be unafraid to take risks by gradually aiming for higher trades. After he gains from a single currency exchange, he'll become more ambitious. As the secret of the trading technique is in the use of previous transactions' results, with records in place, getting a favorable outcome is possible.
The Memory of Price in Action
A trader hopes to exchange the USD/CAD currency pair for an interest of 2%. Following the Memory of Price strategy, he is supposed to gather records of his transactions using the USD and the CAD. As the goal is to raise the probability of gaining more, he sorts out all the highs and lows of each currency, then applies them to his individual situation. From the accounts, he may determine whether the USD/CAD pair is the more profitable trade.
Is There Any Risk?
Though the approach is about adjusting the stakes for better and consistent results for a trader, the Memory of Price strategy remains to have its own share of risks. Among the usual concerns is that it has a negative ratio. As a market's progress may sometimes decline, it could mean that there isn't any profit to gain. For the more conventional trader, this is a downside as the approach doesn't offer him other opportunities.
Source: http://www.mtrading.ph , A Forex broker from Philippines.
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