If you are looking for resources for building forex trading career, you are in the right place.The following tips and tricks of trading will help you to make consistency in forex trading.
Speculators or short time frame traders generate as much as 90% of forex trading volumes. Unfortunately, it may not be a good idea to be one of them. When it comes to investing your hard-earned cash, you may want to be more diligent! Make an effort to ensure that you invest in safe ventures rather than the first one you spot.
A large number of traders tend to trade throughout the day, over-analyzing short time frames. Often their careers are cut short by the lack of success. When these traders do not get their desired returns, they even double-down and try to conduct their trade at an unsustainable rate.
The Top Forex Trading Success Tips to Help You:
Let’s find out seven ideas how you can transform your trading career.
Know your risks before you start trading:
Most investors just prefer to head online, check the stats put up there and start investing. But this is your hard-earned savings; so you need to do the research before in a trade. Often the statistics put up online do little to educate the investors regarding the various risks involved. Do a thorough market research and then make a judgment call on whether to invest in one or not.
Start with the daily time-frame before studying the intra-day charts:
This is an essential tip that may very well transform your forex trading strategies altogether. Obsessing about lower time frame charts will only lead to stress and anxiety every five to fifteen minutes. With the emergence of new trading cycles every hour, traders cannot get themselves off the hook.
However, the truth is that the majority of these lower time frames tend to crash and burn quickly because of over-analysis.
- Daily chart-reading will solve most of your problems.
- They give you the best market view.
- Comparatively lesser noise and false-signals than intraday charts.
- You learn patience and discipline.
- Less time-intensive which allows you more free time.
- The daily chart helps you fit trading into any schedule.
- Lesser involvement curbs your temptation to over trade.
- You can direct your focus on one trade at a time.
You can also use Weekly and Monthly charts to get a general overview. If you are a good trader, you will still be earning the same amount of money.
Make a written plan to keep you from day trading:
Chalk out a proper trading plan if you really want to be successful. Having it in writing will make you more resistant to day trading. Traders feel compelled to conduct a trade as soon as an opportunity comes up. It is human nature to jump at the chance of making some quick money.
But you need to keep yourself apprised of all the necessary information and data to increase your odds of winning. Unless you are patient and willing to learn, you will not get the hang of factors like the forming of trends, highs and lows and trend corrections. Impatience can lead to a loss of your money.
So it is better to take some time off and have a look at the bigger picture. Even a single transaction can lead to a series of future losses if not done properly.
Day trading is quite a difficult area to master. You will only be able to make money with the best trading skills and discipline. 95% of retail traders tend to lose almost 95% of initial capital in just the first few months. Day trading may sound easy, but it is not. So gather experience before venturing into it.
Do not borrow to invest in day-trading deals:
It is never a good idea to borrow money to invest in a trade. Borrowing money to invest in a financial product is usually called a margin in forex trading.
Here’s the problem – let’s say you borrow and invest but the trade under-performs and yields less than expected returns? For one, you would be left bearing the loss and would have to cover the debt. Even worse, it may bottom out. In that scenario, you will lose all your savings apart from having to clear the debt. So never borrow to invest, no matter how good the trade may seem.
Do not opt for time frames that are less than an hour and do low-frequency trading:
You may have watched movies and loved the edgy lifestyle of traders. If you are just starting out in trade, you will feel compelled to do it all the time.
Day-trading, as already mentioned, will drain your time and energy and most often you will not have gained anything out of it. Combined with trading in higher time frames, you should also opt for low-frequency trading.
You may wonder how that would help you. Low-frequency trading will enable you to undertake bigger risks later on the trades that will meet your trading strategy criteria. Why spend your money on trades that will most likely not be successful.
If you’re trading in high-frequency, you will suffer more losses because of the dominance of false signals and the element of unpredictability.
Taking calculated risks is the best way to approach forex trading. The more time you devote to studying the market, the more successful you will be. You will also have a better quality of life by engaging in low-frequency trading.
Save your money for the bigger trade opportunities:
Do not be in a hurry to spend all your money. Save some of it so that you can invest more in trades you believe will turn out profitable for you. You can split up your money in numerous day-trades, but that will only run you out of funds if suffer continuous losses. So keep your money for the bigger fish.
Unless there is a confluence of time-frames, do not take the trade:
You should also find a higher time frame based on price action trading signals and find a level of confluence.
You might wonder what these two terms mean. Price Action is how a price changes over a given period of time. This will help you find out the market’s directional bias. Confluence marks the intersection point of two levels. Now use this data to form an effective strategy.
Following these tips will help you rise from a beginner to a professional forex trader!
Forex is not a place to gamble. It is always suggested to consider forex as a business. As a trader, you should develop a strategy that suits your personality. You may develop a strategy complying with your jobs, or other activities. Before going to invest in the forex market, always remember the risk associated with it. You may follow a successful trader in making a good career in forex trading.