Imagine that you are all set to start your trading career. You have your Forex account in place and your finances sorted. Now all you have to do is make good trades so that you do not suffer any unprecedented losses. Think what will happen if you don’t tread carefully enough. Do you know the selling point? Did you take a look at the forex graph and understand how the trading pair is faring?
A wrong decision will not only upset your trading career right at the beginning, but also discourage you from trying new things. When you are going into Forex, you must know the basics if you want to perform well.
Online trading has always been a fascinating activity for people who want to try their hands at making becoming professional traders. There are new platforms coming up everyday allowing everyone to try their hands at it.
Forex is one of the best online trade platforms because it offers a volatile market that is accessible at the same time. Moreover, it is also very flexible and can accommodate people from all over the globe. If you are beginner in Forex, then you must be wondering how you can start off on a good note and make the perfect entry.
Trade entries are crucial as they can make the difference between your success and failure. You can never take them for granted because good trade entries can potentially give you better rewards and reduce risks. When you enter a trade, you are risking a certain amount of money that you stand to lose if things go south. Moreover, trade entries help determine your identity as a trader.
The Top Tips to Make Your Forex Trading Journey Easier
The following tips might help you!
You can take advantage of the limit orders in order to get better prices for yourself:
In Forex terms, a limit order is actually a pending order which you can place at a price which is less or more than the current market price based on the direction you want to go. If you are planning to trade long, then you should fix it below the current market price, so you can get filled long if the price rotates down. On the other hand, if you want to trade short, you should set it above the current market price.
Limit orders will let you choose a trade that is priced according to your convenience. There is a chance that you might not get filled at all but that risk is worth taking because you will get a great deal if things go your way. You will also get more flexibility in your stop loss placement which can make a big difference.
Use the T.L.S principle and await confluence:
Trading is all about making the right call at the right time. If you take one wrong step, you can suffer the consequences for days on end. Hence, you should follow models that have proven themselves to be beneficial when you are looking for trades. The ‘TLS’ model is one of the most popular tools used by Forex traders. It can be expanded to ‘Trend, Level, Signal’ which means that you have to follow three simple steps:
- Firstly, you have to find the TREND/market bias.
- You need to locate the key LEVELS.
- Now all you need is a trade SIGNAL.
If you find that you have completed at least of two of these steps, and they are in alignment, you will know that you have a great trading opportunity at hand. Never give up on a trade that combines all the three elements in a way that is most convenient for you.
Set up trades after wrapping up your day:
One easy way to ensure that you are entries are as perfect as they can get is to set your trades at the end of each day. You can simply analyse the market data at the close and frame your entries. The advantage of this method is that you will not have to deal with intraday charts that can confuse you. Moreover, you will find that checking up on your trades just twice a day will help you control the temptation to make unnecessary changes. Day trading also has psychological effects that you may not handle well.
The daily chart time frame is more relevant than the lower time frame charts. Hence, you will notice a great deal of improvement in your trade entries if you follow the daily chart instead. It filters out the bad trade entries and helps you make decisions based on more reliable data. You should not risk any fluctuations when you are dealing with your hard-earned money.
A trading checklist can make a huge difference:
Being a Forex trader is anything but simple. You cannot settle for simply any trade and risk your money on it. You have to devote time to finding the best possible trades for yourself. Once you have found the perfect trade, you must have the courage to actually go through with it or else you will be regretful later on. Preparing a simple checklist will give you all the pointers that you need in order to differentiate between the good signals and the bad signals.
Sometimes we get so excited after spotting a trade that we forget to check if it is actually profitable. The checklist can have images and drawings that represent your ideal trade setup so that you can always run a quick comparison. You can also write basic to-dos on the list so that you do not forget about them. Your check plan will be personal and customizable which means that you can change it whenever you like. Having an organised plan will also help in effective risk management.
You might think that a checklist often fails to resolve the emergencies that arise in a volatile world like that of Forex. However, a basic guideline will keep you from deviating down the wrong path. You will be surprised at how much better you become at making the perfect entries with this.
Be well-acquainted with the market:
One foolproof way of ensuring that you do not make bad entries is actually knowing your playground, aka the Forex market. Traders often forget that the market functions on its own and heeds no traders which means that you need to especially careful about volatile it is.
As a trader, it is your duty to know which of your techniques work best in which market condition and adjust your strategy accordingly. Being frustrated because the market is not going your way will not help your case in any way. You must figure out the best time for you to conduct your trade based on the prevailing condition.
The Forex market is extremely volatile. That is both a good and a bad thing. The flexibility and versatility of the market allows you to learn trading in your own way. On the other hand, it also means that there are a large number of fluctuations in the market. Since Forex is dependent on the changes in the exchange value of different currencies, you will have to adjust to rapid changes without any previous preparation. Any worldwide financial issue can affect the value of a particular currency against another. If you do not remain aware of trending news, you will suffer. The market works with invisible hands, and you have to swallow your pride and fix your entry points accordingly.
Do not shy away from making the best trade entries now that you know the best tricks in the market. Always remember that your entries can decide your fate in the market for the next day, week or month.