How to Trade Forex Successfully?
1: Don’t invest too much money! Some new traders like us when they first start their Forex trading experience they wonder why they wouldn’t be winning all of their trades, so they would just go ahead and make big trades believing that they should succeed. The truth is, most people who start trading this way never have successful trades.
So always remember NOT to risk more than 1% to 5% of your Forex live account when trading, and keep in mind that this way you can perform more trades and thus gain more experience.
2: Depend on more than just one factor! There are tons of ways to predict price action, watching for previous resistance or support, Fibonacci retracements, indicators, candlestick patterns, chart patterns etc. Do not decide on your trade just using one of those things, but rather try to have at least two or three of them confirming your trading decision.
3: Always remember that you don’t have to trade this particular pair! Sometimes we see the chart slightly going up and because we feel like we need to be trading, we just make believe that there is a buying opportunity there, almost half of the time (or even more often) we make the wrong decision and we get disappointed watching a downtrend formation and our money goes to waste.
The only one way out of this is to make sure that the currency pair you are about to trade have a clear trading opportunity. We have dozens and dozens of currency pairs in Forex, always choose the pairs that have an opportunity that speaks for itself.
And please do not get confused with this next tip…
4: Try to be an expert in one pair of currencies! Is there a country that you are so interested in? You know its language? Political scene? Then why don’t you go ahead and try to learn more about its currency?! Try to monitor this country’s currency’s performance and see if it could be a good Forex trading candidate. The more you know about this currency and the political system of its homeland, the more successful and smart trader you will be.
5: DO use STOPS! Many new Forex traders ignore this, thinking they could just watch the trend and decide when and where to stop the losing trade (if they believe their trade could lose at all!) Using a stop will save you money in case something goes wrong with your internet connection or device, plus, you will have a clearer picture of where you are and how far you have gone when it comes to losses.
6: Back test! Go back on the chart to earlier times and try to think what you would have done back then that would have worked in this visual future. Get more ideas and Forex trading strategies analyzing the price action of the past.