Winning Forex Trading
Winning Forex Trading – The secrets to winning forex trading that will enable you to master the complexities of the fx market. The forex market is the largest market in the world in terms of the d #USD value of average daily trading. It offers traders a number of advantages, including the high leverage available in any investment arena and the fact that there is forex market action every trading day.
Forex trading is the great investing frontier – the one forexmarket where a small investor with just a little bit of trading capital can realistically hope to trade their way to a fortune. However, it is also the most widely traded market by large institutional investors.
Trading foreign exchange is easy. FX Trading it well and producing consistent profits is extremely difficult.
To help you join the select few who regularly profit from trading the fx market, here are some secrets to winning forex trading, tips to help make your trading more profitable and your career as a trader more successful.
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Winning Forex Trading #1 – Watch Daily Pivot Points
Paying attention to daily pivot points is especially important if you’re a day trader, but it’s also important even if you’re more of a position trader, swing trader, or only trade long-term time frames. Why? Because of the simple fact that thousands of other traders watch pivot levels.
What we mean by that is that markets will often find support or resistance, or make market turns, at pivot levels simply because a lot of traders will place orders at those levels because they’re confirmed pivot traders.
Winning Forex Trading #2 – Trade with an unique edge
The most successful traders are those who only risk their money when an opportunity in the market presents themselves.
Your unique edge can be any of a number of things, even something as simple as buying at a price level.
A similar edge provided by converging technical indicators arises when various indicators on multiple time frames come together to provide support or resistance.
Winning Forex Trading #3 – Watch Your Capital
In forex trading, avoiding large loss is more important than making large profits. Winning forex trading involves knowing how to preserve your capital.
But in order to enjoy that trade, you have to have sufficient investment capital in your account to profit from such a trading opportunity whenever it happens to come along.
Winning Forex Trading #4 – Technical Analysis
There is virtually an endless number of possible lines of technical analysis that a trader can apply to a chart.
Winning Forex Trading #5 – Place Stop-loss Orders
Many novice forex traders never place appropriate stop loss . It is indeed that, but it is also an essential element in winning forex trading.
Many novice traders make the mistake of believing that risk management means nothing more than putting stop-loss orders very close to their trade entry point. It’s true that part of good money management means that you shouldn’t put on trades with stop-loss levels so far away from your entry point that they give the trade an unfavorable risk/reward ratio.
As an example to help you better understand this concept, consider the following two charts of EUR/USD, which looks at the market price action on August 28th, 2016. A trader looking at the 5-minute chart below might have entered a buy order around the 0.7843 price level (indicated by a red up arrow shown just above the medium-length blue candlestick that appears just above the word “level” on the left hand side of the chart), based on the candlestick closing with the price above the two moving average (red and blue) lines plotted on the chart. The trader might also have chosen to place a very close, very low-risk stop-loss order just below the recent lows around the 0.7840 level, as shown by the horizontal red line drawn on the chart.
Unfortunately, the subsequent price movement (just left of the center of the chart, just to the right of the word “low”) would have stopped him out of the trade before there was a substantial price movement in his favor. The resulting loss would have been minimal, so to that extent the trader can be said to have practiced good risk management. However, as the price action on the right-hand side of the chart clearly shows, after the trade was stopped out, price, in fact, turned sharply upward. If the trader hadn’t been stopped out, he could have realized a very nice profit.
FX Trading Conclusion
The forex market has its own unique characteristics. In order to trade it profitably, a trader must learn these characteristics through time, practice, and study.
Traders will do well to keep in mind the helpful tips to winning forex trading revealed in this guide:
- Pay attention to pivot levels
- Trade with an edge
- Preserve your trading capital
- Simplify your market analysis
- Place stops at genuinely reasonable levels
- Download our Forex Signals APP
Of course, that isn’t all the trading wisdom there is to attain regarding the forex market, but it’s a very solid start. If you keep these basic principles of winning forex trading in mind, you will enjoy a definite trading advantage. We wish you the greatest success.