10 Tips to Successful Forex Trading using Crypto on TradeConnect
Whilst Crypto trading and Forex trading both involve “currencies”, there is still an enormous number of differences when trading the two markets. For example, Forex trading is one of the largest and most well-established trading markets in the world that only deals with any of the 180 legally-established ‘fiat’ currencies available worldwide. Crypto trading, on the other hand, is a fairly new market which deals with digital assets or “virtual currencies” which are largely unregulated and of which there are no physical elements.
Starting out in the world of Forex trading is a skill of its own however that doesn’t mean that there aren’t strategies and tips that can help you make the best decisions when diving into the world of forex trading using your cryptocurrency as collateral.
To help you start trading Forex with confidence, we’ve put together 10 tips and trading strategies that can help you build a more comprehensive trading plan…
1/ Learn the Rules of the Forex Market
Ensuring that you have a good understanding of the Forex market and the strategies required for trading are essential skills to achieve before you start live trading.
It is important that you take every opportunity to learn more about Forex and the methods of market analysis.
You will find that there is a great deal of readily available information in books, blogs, videos, and even on our own TradeConnect blog that can help you learn the fundamentals about the largest and most liquid trading market in the world. Did we mention that all of our resources are free? :D
2/ Create a Plan for Success
A forex trading plan provides you with a blueprint for your trading activities and will clarify the necessary actions you need to take when trading.
Your forex trading plan should always document your goals, methodology, as well as your risk-tolerance level, and the analysis process of your forex trading strategy.
In all cases, it is important that you document your forex trading process by writing a plan on paper and you must follow the plan as it is written in order to streamline your trading efforts. Never try to remember the plan in your mind, you must always write it down to ensure that you have it to refer back to.
3/ Put your Plan to the Test
It is important that you go through the motions of your forex trading plan as it is just as important as the documentation of your forex strategy. At this stage, you can try to use a demo trading account to test your trading plan using real-world market conditions.
Demo trading accounts are readily available from most platforms and will provide you with the best opportunity to practice trading and test your trading plan in a lifelike yet simulated trading environment with no risk.
Practicing your forex trading with a demo account will help you to identify weaknesses in your trading strategy and it will allow you to adjust your strategy where necessary without you having to worry about losing money.
4/ Determine Market Conditions Before Taking Action
Regardless if you choose to use fundamental analysis, technical analysis or a mix of the two core analysis styles, a complete and regular assessment of active market conditions is essential before placing any trades.
Sometimes market conditions will be primed for trading while other times it may be best to stand aside. If you take the time now to learn more about the methods of market analysis it will serve you well later.
Choose an analysis method that is not overly complicated, you understand well, and you are comfortable using. Complete your analysis then let the market show you the way.
5/ Know the Limits of your Trading Capital
Successful traders know that there is risk in every single trade that they make and they take steps to limit their exposure by putting rick controls in place.
By selecting a risk point that fits your financial situation and personality style, you can help control your risk exposure on every trade.
For example, many traders use a 1% to 3% risk level as their control point. A trader with $10,000 in trading capital and a 2% risk point will never risk more than $200 on any single trade.
It is not uncommon to experience phases of wins as well as losses. A low-risk point will ensure that you will do what’s necessary to reduce your risk while maximizing your reward.
Always identify the specific risk point that is appropriate for you and make it a part of your personal trading plan. Never risk more than you can afford to lose. Always make sure that you have enough capital to support your trading on both your good and your bad days.
6/ Know Where to Enter and Exit the Market
Pending and take profit orders can help you to manage risk and will help you to protect your potential profits by helping you to get in or out of the market at specified prices.
The use of these specific orders will help to ensure that you enter the Forex market where your plan indicates and that you exit the market in the same way.
Locking in profits and controlling risk is the key to trading success over the long run.
For each and every trade you should identify your entry, stop-loss, and profit goal price levels. All of these levels should be determined by the rules of your trading plan.
7 / Remove Emotions from the Equation
Did you know that uncontrolled emotions are one of the key reasons traders never achieve the success that they are seeking?
Successful traders use the structure and discipline provided by a well thought out trading plan to eliminate emotion from their day-to-day trading. A planned and strategic approach to trading helps to reduce any uncontrolled emotions.
Some traders use a daily ritual such as a short checklist related to their trading plan. Others use brief physical exercise to help clear their mind and sharpen their focus.
Whatever you choose, what is most important is the result that your decision provides — delivery of the mental focus required for your Forex trading.
8/ Know What Type of Trader You Are
Understanding your own personality and working with a trading plan that complements your personality will help ensure you get the most positive experience and best results from your trading.
Knowing your own personality is just as important as knowing the personality of the market you decide to trade.
Some traders are better suited for high volume short-term trading while others thrive when using a slower long-term style.
There are many online assessments available to help you learn more about yourself as a trader. There are also numerous books written on trading psychology with behavioral finance themes. Always explore who you are as an individual person and how that can impact your trading psychology.
9/ Discipline and Consistency will Lead to Success
It is important to remember that success in Forex trading, or any trading, is a result of discipline, consistent actions, and hard work. It is not the work of an above-average ability to select successful trades.
In fact, did you know that most traders select losing trades juts as much as they do winning trades? Over time the success rate of traders begins to move towards a 50/50 win-loss ratio. The more trades you complete, the closer to the 50/50 average you get. For this reason, it is important to remember risk to reward ratios.
If for every trade you risk $1.00 dollar and attempt to make a profit of $1.00 with a 50/50 average you will come out even. If you increase your profit targets anywhere in the range from $1.01 to $2.00, on average, you will come out ahead.
This is, of course, a simplification of the entire trading process but successful traders do understand this principle and they use correctly weighted risk to reward ratios along with strong discipline and consistent actions to control the risks they take and therefore maximize the profits they gain, thereby achieving success over the long run.
10/ Change with the Markets
Over time, markets shift and market mechanics always move in different ways. As a trader, it is important to review your trading plan regularly and, when needed, adjust your trading plan to new trading environments as they evolve in your day-to-day trading life.
It is important to remember that the core elements and principles of a quality trading plan will serve you well in all markets. Always take time to understand the fundamental influences in play for your specific market and adapt your trading strategy to sync up with your market of choice.
Plan your trade and then trade your plan.
🌟 Getting Started with Forex Trading on TradeConnect Using Crypto as Collateral
Despite the numbers, data, and charts, forex trading is not rocket science. Practice and knowledge are the proven keys to successful Forex trading.
Now that you are armed with these 10 tips to help you get started planning your Forex trading strategy, all you need to do is download the TradeConnect app and get started trading in 5 easy steps:
- Download the TradeConnect app from the App Store
- Create a FREE account — takes 30 secs and it’s really easy.
- Deposit bitcoin or ethereum into your secure platform wallet
- Choose your Forex market to trade
- Open your position
That’s it!
