9 Forex Trading Secrets That Only Experts Use
There is no Forex trading strategy which can be profitable if a trader has the wrong mindset. Here are nine trading tips that you can use to avoid disasters and maximize your potential in the currency exchange market.
1. Plan your goals
Define your goals, know what you want from trading, and define a time-frame and a working plan for your trading career. What is the time-frame for the trial and error process that will inevitably be an important part of your learning? How much time can you devote to trading?
These questions must be answered before you start trading.
2. Choose your broker carefully
Choose a broker with whom you feel comfortable but also one who offers a trading platform that is appropriate for your style of trading.
It’s important that your expertise level, and trading goals match the details of the offer made by the broker
3. Methodology Selection and Application
To analyze the market and predicting the future trend, you need to be aware of two things, the technical analysis and the fundamental analysis.
Fundamental analysis is a method of predicting price movements and future market trends by studying charts of past market action which take into account price of instruments, volume of trading and, where applicable, open interest in the instruments.
Technical analysis is a method of forecasting the future price movements of a financial instrument based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the financial instrument.
4. Chart Synchronization
You must pay close attention to the time frame of the chart you are using. If for example, you are viewing a weekly chart and based on your analysis, it is showing you a great buy opportunity, make sure to open a chart with a lower time frame, such as daily or hourly, and make sure they are telling you the same thing.
5. Expectancy Calculation
When and how do you know if you made the right decisions? For this, you need to calculate your gains and losses from time to time. You should go back into your trading history and count the number of winning trades vs. losing trades. Once you have done this, calculate the amount traded in all your winning trades vs your losing ones.
6. Money Management
Money management is how to use the leverage you are offered. Leverage must be used only with its logical limits. Overuse of leverage in Forex trading has caused many traders to end up suffering heavy losses.
7. Confidence Build Up
When you become a trained Forex trader, you also build your confidence which will eventually leads to a small loss. No matter what happens, it is important to stick with your decisions. Do not let emotions get in the way, try to stay objective and calculated when trading Forex.
8. Weekend Homework and Analysis
Over the weekends, when the markets are closed, do your analysis, read the news, watch the movements of the past week, and make important decisions about the upcoming week, take your time and make the right decisions about how and when to trade.
9. Record Everything and Keep it Printed
The best way to stay objective is to write everything down.
Write down your entry and exit points, include your emotions about the trade, your anxiety, as well as your level of optimism. Specify your situation when you closed your trade weather you were greedy for example or not.
This will help you to grant you your ability and mental control.
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