Understanding and trading on consolidation patterns will give the currency trader in the know two "edges". First, the trader can hold his or her initial position for a shorter amount of time, thus minimizing the risk of holding positions in the case of higher rollover interest. Second, the profit potential from such a position can be big, as long as the trader follows strict, disciplined money management rules. Without money management, the trader might as well be playing with fire.
Source: http://www.investopedia.com/articles/forex/06/ConsolidationPatterns.asp; http://www.onlineforextrading.com/
Tags: money management, forex trading
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