When considering the average daily dollar volume of all markets worldwide, the Forex market far outstrips stock and bond exchanges.
As such, the Forex market provides traders with a variety of benefits by design, such as the largest leverage of any investment arena and constant market activity throughout the trading week.
On the other hand, large institutional investors make up the majority of the market’s daily volume, with billions of dollars changing hands in currency exchanges around the world every day a bank is open.
Here are some winning forex trading secrets and five suggestions to assist you trade more profitably and advance your trading profession.
1. Always use the right stop loss orders
When it comes to risk management, many new traders make the error of thinking that all it takes is placing stop-loss orders close to their trade entry point. However, consistently placing stop orders too near to your entry point is a major contributor to poor trading results.
Stop-loss orders should be set a small distance above a price at which the market should not trade if your understanding of the market is right, using advanced trading platforms such as those offered by IFX Brokers.
2. Don’t overcomplicate your technical analysis
Technical analysis can be applied to a chart in nearly an infinite number of ways. On the other hand, excess is not always (or even usually) a good thing. A trader’s ability to see the forest for the trees is hindered when they consider an overwhelming quantity of indicators.
In general, successful trades are more likely to result from a trading strategy that is both straightforward and easy to implement, requiring only a few rules and a minimal number of indicators.
3. Have a risk-adjusted approach to your money
When trading foreign exchange, it’s more vital to limit losses than to maximise gains. If you’re just starting out in the trading world, you might not think that makes sense, but that is the case all the same.
Knowing how to keep your trading funds safe is essential to success in the foreign exchange market. Having and religiously adhering to a set of risk management guidelines virtually ensures that you will become a profitable trader in the long run.
If you can keep your trading account from being wiped out by losses, you have a good chance of hitting a “home run” trade and seeing your profits and account balance skyrocket.
4. Trade on opportunities
The best traders are the ones who only take a chance with their capital when they have a clear advantage over the market, or when the odds of the deal going in their favour are high.
Your advantage might come from anything, from knowing when to purchase (or sell) based on historical price action to having insider knowledge of a key support or resistance level in the market.
5. Monitor the daily pivots
Whether you prefer position trading, swing trading, or trading primarily on longer time frames, it is crucial that you pay attention to daily pivot points.
Daily pivot points are important to monitor for signals of trend continuations or potential market reversals, regardless of your trading method. Consider pivot points and the associated trading activity as a supporting technical indicator that may be used in combination with your preferred trading approach.
Starting winning in the forex market by applying the guidelines listed above.
