Forex Trading Tips Pt. 4

Posted in Forex Trading Tips on 26. Mar, 2010

1. You have to focus on trading currency pairs. Not just a single side of them. There are 2 ways in forex trading, you have to understand how both of them affect each other.

2. Having knowledge gives you an advantage in forex trading. You have to understand the basics of market psychology and keep listening to the news. The news will affect the way the market moves and you should be gaining profit in times when the market moves, not when they calm down.

3. Do not make small trades. Newbie traders place small trades and hope to make a ton of money. This is not true and shouldn’t be the way you trade. It’s difficult to gain back the money you lost in the spread, so make bigger trades and longer term ones to profit more.

4. Take on more risk. If you make small trades while taking small risk, what’s the point of trading? If you ever want to succeed in forex trading, you have to give more chance for your trades to succeed. This means taking on more risk as well.

5. Be independent. If you are going to trade on a specific strategy, focus on it. Don’t go running around telling everyone about it and ask for their opinions. Opinions cost nothing and therefore will have tons of it contradicting your strategy. Be independent and just focus until you see results.

6. Playing with huge margins is dangerous. Although margins can increase the amount o leverage you can get in a market, it is extremely dangerous if you ever have a losing trade. Increase your margins in line with your experience and expertise.

7. Have a strategy whatever it is. If you want to be a savvy trader and make money from your trades, you have to have a strategy. Most people lose money because they don’thave a set of rules, they just enter the market and exit as they please.

8. Do not trade off peak hours. There is very little volume going around and the market is not liquid during this time. It’s safer to just call it a day and trade when its on peak hours.

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