Forex market is an excellent opportunity to earn big profits. However, foreign exchange markets are highly volatile and rates keep fluctuating every second. For beginner forex traders sometimes it is hard to find a right way in the jungle market. Many of them start their career without the right advice and the right forex strategy.
Beginners and Experienced traders as well must remember that knowledge, practise and discipline are key to success. These forex trading tips will give you a solid foundation for building a winning strategy to reach your profit goals while trading forex.
Choose a Trading Style
The 5 Best Tips From Professional Traders in South Africa
1. 🥇 Choose a trading style
2. 🥈 Write down all your trades
3. 🥉 Always set a stop-loss
4. Know when to walk away
5. Keep an eye on current events
There are four different styles of trading to choose from: Scalping, Day trading, Swing Trading and Position Trading. Let’s have a look at each one of them:
Scalping is for traders with a lack of patience. They want to enter in fast, get out, and keep going. Scalpers are focused on small profits, as small as a pip in Forex currency trading per transaction. But they do many trades.
Day traders ‘ style is similar to scalpers except it requires more analysis and enough patience to occupy a position for part of the day.
If you are patient and can wait for the right trade to develop, do not choose scalping nor day trading, they are not for you – you are more like a swing trader.
If you prefer to think for the long term and benefit from a fundamental analysis that requires a considerable amount of time to develop, position trading is more your game style.
Write down all your Trades
As you may know learning from a mistake is a part of self-development and improving your skills. Keep records of all the transactions you made, the risk/reward ratio, and the reasons you decided to make the moves.
From time to time it will be very beneficial for you back over your previous transactions and think over what went wrong and what went well, and why. You can use this information to modify your trading style and strategies to gain more profits in the future.
Those records will help you to easily see your Forex profits, avoid losses, and improve your decisions.
Always Set a Stop-loss
When you develop your forex strategy on some level, you start to become confident that your transactions will definitely be successful.
But this natural expectation of profit in the Forex market must be tempered by awareness that you can’t always be right.
To avoid big mistakes, it is crucial always to set a stop-loss on your trades, as soon as you open them.
This protects you from catastrophic losses to your trade account if the market turns against you, even if you are not monitoring your position.
Know when to walk away
Sometimes you just need to know when you are out of the game.
As we already mentioned Forex trading requires mental discipline. Only a solid forex strategy won’t help you if you don’t focus.
High-performance day after day is sometimes simply not possible. Learn to recognize when you should withdraw for a day or more.
Here’s an easy tip for that: set a firm daily loss limit and move away when you touch it. Keep in mind that there always will be new opportunities.
Keep an eye on current events
Forex markets volatility is dependent on some international or local political and economic events. You have to be fully aware of any news that is about to happen that could affect a currency pair that you trade
Current events can move markets very quickly. However, if you are aware of the present political and economical situation you can predict the movement of the forex market.
Check the forex economic calendar, do not lag behind any events that could affect your positions and try to keep an eye on developments that are not expected.
Frequently Asked Questions
Can forex trading make you rich?
It is possible, but for most it is rocky road to huge losses.
How do I get better at forex trading?
Here are 5 Tips that every Forex Trader should know.
How long does it take to learn forex trading?
There are no shortcuts, for some professionals it took 2-10 years to become successful.
It can be if you treat it that way.
Why do forex traders fail?
Because they are undercapitalized in relation to the size of trades being made.
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