Monday December 26, 2016 - 12:33:59 GMT
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Top things that you should know about forex trading
There are many people in the forex industry who are constantly trying hard to make a good living out of trading. Most of the traders in the forex industry fail to make a decent only because of they don’t have the proper knowledge to trade the different financial instruments in the forex market. In order to trade the currency market properly, you need to have strong determination, sincerity, and dedication. Once you have this three quality you have the spirit to overcome the challenges in forex trading. Most of the professional trader who is trading the financial instrument over a long period of time has these three extreme qualities in them.
As a professional trader, you must know some of the key things which help the trader to become a professional trader. The statistics of a successful trader in the forex industry is too low since 5 percent of the people are making a consistent profit out of trading the financial instrument. Let’s discuss some of the important things that you should know when to trade the financial assets in the market.
Treat forex as a business: The forex market is such a lucrative market that most of the traders jump into the world of online trading only to make a decent income. They consider forex as get rich quick scheme. But in reality making money in forex is just like doing any other business in the world. You need to have a proper plan and you should have a strict trading discipline in order to become a professional trader. If you can treat forex as your business only then you will be able to make money in the online industry.
Stop overtrading: Overtrading is a serious mistake in the forex industry. Almost every single retail traders think that the more they trade the more money they will make. But in reality, trading too often simply increases the associated risk in the market. Most of the professional prefer to execute a quality trade in the market rather than quantity. If you truly want to become a professional trader then you need to focus on quality trade execution. Experts hardly take one to two trades once in a day. So as a trader you should follow the expert’s guideline since they are making money successfully in this industry.
Don’t rely on indicators: There are many traders in the financial world who often mess up their chart by using too many indicators. But relying on too many indicators creates massive confusion in trading. As a trader, you need to understand the market behavior very precisely. The best way to understand the market movement is by using the price action trading strategy. On the other hand, if you become dependent on the indicators then you will never be able to execute quality trades in the market since they will never give you real time signal. Either they will act as leading indicator or else they will give you lagging signal. But when you will start trading with the price action trading strategy you will trade the real-time market data with clear explanation.
Avoid using short time frame: Most of the new traders in the financial industry trade the short time frame since they think short time frame offers more trading opportunity. In reality, short time frame does offer a lot of trading opportunity but compared to offered quality the quality is extremely bad. As a professional trader, you should always focus on higher time frame. Most of the professional trader uses the higher time frame to execute their trade in the market.
Stop using tight stop loss: There are many new traders in the financial world who often use a too tight stop loss in the market. As a professional trader, you should give your trade some space. If you don’t give some space to your trade then many trades will hit the stop loss in the market. The market generally gives false spike and take away the tight stop loss so be sure to use a reasonable stop loss in the market and allow your trade run long.
Embrace losing orders in the market: If you become a full-time professional trader then losing trade is inevitable. As a professional trader, you need to embrace your losing trades just like the winners. Instead of embracing the losing trades the new retail traders in the financial industry try to recover their loss instantly from the market and thus incur a further loss. As a professional trader, you need to learn how to embraces the loss in the market. And always assess losing the trade in the market since it’s a great way to enhance your trading performance.
Keep things simple: Trading has nothing to do with complexity. As a professional trader, you should always try to keep things simples in the market. If you make things complicated then it will become extremely difficult for you to make a profit, always focus on simple things and try to trade the market by using price action trading strategy.
Summary: Forex trading is completely different from any other profession in the world. As a forex trader, you need to have a complete control over your emotions. You should always trade the market with the logical decision and never execute any order based on your emotions. In the eyes of trained professional proper risk management factor is also very important in forex trading. Make sure that you execute every single trade by using proper risk management factors. Never trade with the money that you can’t afford to lose and concentrate on your long-term trading performance.
Article was written by Dwayne Buzzell
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