Are you looking to make consistent, money in the forex market quicker than you thought possible? While there might not be any really quick shortcuts to mastery of technical analysis and the currency exchange markets, by employing the forex strategy listed below you can maximize your gains and minimize your losses while you’re learning the market. Even if you’re not a beginner, these forex strategies can help save you several pips a day and thousands of dollars are year.
Always Set a Stop Loss to Limit Losses and Ride Wins
This is the most important part of trading forex, especially for beginners. For every single trade that you enter into, no matter what, always set a stop loss. Initially, you can set the stop loss for 20 pips below the entry price with a goal of taking profit when the price rises at least 10 pips. When the price does rise, you can make a decision, either you can sell the currency or you can move your stop loss to break-even. As the price rises you can move your stop loss up or sell if the trend indicates the currency might moves down. This way your bad decisions won’t cost you while you’ll get the maximum profit from your wins.
Use Proper Money Management
Another important tip that will separate traders that make money and can stay in the market from those that lose most of their money early is proper money management. Don’t chase big wins by risking your entire account balance. Instead, only put about two to five percent on any given trade. Risking a lot of money on a single trade might make you a lot of money over two or three trades, but long term it is like placing all your money on black in roulette. Even professional traders that do a lot of forex day trading don’t risk large amount of their trading capital on a single trade. Take a hint from them and trade defensively.
Develop Discipline and Remove Your Emotions
If you’ve ever played poker, you probably know all about tilt. Tilt is when a player loses a lot of money in a hand, usually through a bad beat, and starts playing erratically and throwing money around the table. Usually this is bad for the player but great for table because he usually loses most of his money before he regains his head. Much of the same thing can happen in currency trading if you make a few bad trades and lose some money and start to make larger trades to try to make up for the loss. Always make sure that you have a good forex trading system with forex signals that you can trust and stick to your plan. If you start to get angry and can’t think clearly, always walk away from the computer. The coolness when you trade is takes time to develop and every trader will go through it.
Pick and Simple Forex Trading Strategy and Master It
While there are many, many different ways to trade forex, instead of trying them all and trying to find the best forex strategy, as a beginner in the market you should focus on one system that fits with your trading style and where you can easily see the forex trade signals and master it. Some of the best strategies that you can use as a beginner are:
- Japanese candlesticks (for learning to trade with the trend)
- Moving averages
- Support and resistance
Employing these four different forex strategies in conjunction with a great broker will make sure that you make the most money possible with your forex account. If you’re still on the fence on whether you want to have an account or not, get started today with a practice account at one of the major brokerages.
