5 FOREX TRADING TIPS THAT CAN BOOST YOUR PROFITS TODAY
If you want to make a profit from forex trading, you need to be smart enough to take advantage of potential opportunities. To do that, you need to master forex trading tips. One of them is the understanding of support tools and forex strategies that make trading easier and more successful. This article will give you 5 forex trading tips to make a profit from forex trading, helping you to make money constantly from this market. If you follow the tips and put it into practice, they will definitely improve your trading results!
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Know your type
There are four different types of transactional personalities. Discovering your trading personality will help increase your strengths and minimize weaknesses. There is only one best forex strategy that suits you. If you are new to the market, you may find it difficult to understand your trading personality but these tips will help you find it. You will fall into one of four categories:
A scalper does very well in fast market trading and leaves it. He enters the order, makes a profit and exits the market as quickly as possible. Instant traders usually trade with small time frames, spend less time trading daily and capture smaller pips but more frequent trading intensity.
These traders want to look at the market every day, the time it takes for a long order to capture a larger number of pips. This group of traders uses a medium-term time frame and is very cautious with the analysis to avoid a market reversal.
These traders trade only once or several times per month after major financial news such as quarterly reports or earnings. This group of traders mainly participates in surfing.
Long term traders
These traders enter and drop orders for very long runs. They trade with a larger time frame by using trading strategies that help them win boldly in a period that can last up to months. They only focus on safe trading options and have high profit potential.
Learn to control risk
You enter an order but always burn out your account before the market goes right for your analysis. The solution here is to always use Stop Loss. Cutting losses prevents you from losing all your trading account funds. You set a stop loss figure and when the market reaches this level your trade will automatically cut. Adjust cut loss depending on market conditions.
When the market is volatile, stop-loss orders will be larger. This volatility creates higher peaks and troughs, which helps to bring in high profits for smart traders. Smart traders are flexible in stopping losses according to market movements.
Trading in groups
You can save time and multiply your profits by trading in groups. This is a strategy that allows you to control the two dimensions of the market, including selecting a currency and placing it in the following two sections:
- The control part is when currencies such as USD are to the left of the currency pair's slash - USD/CHF, USD/JPY, etc.
- The anchor is when the currency of your choice is on the right of the slash like EUR/USD, GBP/USD, etc.
The first step is to choose a currency to focus on. As soon as you do that, you create the control section and anchor part. The next step is to conduct research on the currency you have chosen. Then, based on your research, you will receive information about how the currency works against the currency associated with it. You can trade both bearish and bullish trends at the same time when you break the currency pairs into baskets.
For example, you analyze the Euro. You find out that the Euro is strong against the Yen and weak against the USD. Therefore, you can create a trading group that let you buy EUR/JPY and sell EUR/USD.
Don’t trade with 2 or 3 strategies simultaneously
For example: some traders like to apply day trading and swing trading in the currency market. Huge mistake, I tell you.
Too many strategies will confuse your mind and make you eventually lose potential profits. Why you need to stick with these three strategies is because there are three types of market movement and each strategy will support trading each type of market. You need a strategy for day trading, another strategy for surfing or long term trading, and a pipeline trading strategy (when the market is flat). Develop a reliable strategy for each market situation that makes it easy to trade in all market conditions.
Trade with multiple time frames
You should trade with multiple time frames. This is because the active time frames are interconnected, each affecting each other. Candlestick patterns appearing in long-term transactions are shown more clearly through short-term transactions and vice versa. For example, when you want to enter an order on an hourly chart, you would start by analyzing the 4 hour chart or the higher time frame chart. The general rule is to continually have your replacement time frame at least four times bigger than your original time frame size. Smaller time frames have an effect on larger time frames and vice versa.
We do hope that these 5 forex trading tips can help you succeed more in forex trading.