If you want to really have a profitable fx trading career, think like a pro. They spend a lot of time watching and waiting for a beautiful, leaping dolphin to swim by because they know that such a catch will provide a very good run for the money. So, if you’re an fx beginner, look at your monthly charts and try to find the “next big trend”. While you’re doing this, read as much as you can about the fx currency pair involved – particularly any forex reports from banks that specialise in trading the currency pair in question. Enter at the beginning of the trend and slowly build up your position with additional contracts. Along the way, adjust your stops (or create “trailing stops”) to protect your implicit profit. If you don’t know when to exit the scene, try using a “Parabolic SAR” indicator (on a weekly chart, only) to help you see when the trend changes.
Don’t forget to keep your leverage ratio low. Beginners should not go over 50:1 – ever.
Becoming Better-informed On FX Currency Trading
The internet has a veritable cornucopia of fx-related resources available for no charge or almost no charge. Many banks publish their fx opinions on their websites. News sites like Reuters and Bloomberg feature a myriad of fx-related stories, commentaries and pricing data. Former fx traders also have established their own websites and freely expound on their latest fx trading strategies. There is practically no end to the number of fx-related blogs and chat rooms that have popped up. In addition, your trading platform will provide you with selected news reports, analyses and commentaries. Obviously, some judicious reading is demanded. While many may claim to be an expert, stick with reports from those who truly are: banks and former bank fx dealers.
Tactics To Avoid When FX Currency Trading
Beginners usually make two basic fx trading mistakes. First, they underestimate the power of leverage ratios that are in excess of 50:1 – and, as a consequence, they go higher than 50:1 on their trades – which can propel a position straight down faster than you can believe. So, if you’re an fx beginner, stick to less lofty levels (i. e., 20:1, 30:1 or 40:1) and give your trades a chance not to get whiplashed into oblivion. Second, beginners have a tendency to get emotionally involved and forget all about their trading plan (doing all kinds of crazy stuff like launching trades on Fridays or going against a major trend, etc.). That’s a no-no; and, you’re likely to financially suffer for it.
Ways To Boost FX Currency Trading Profits
Trade like the experts do. They watch for really big (i.e., 1-6 month long) trends to emerge and try to get in at a relatively low averaged cost and then they just “ride the wave”, adding on contracts with the extra cash margin appearing in their accounts. In this fashion, they keep their execution costs to a minimum, maximising the profitability of their position. Toward the end of the trend, they may also take part of their fx profits “off the table”, just in case some kind of unforeseen pricing reversal occurs. In 2013, the USD/JPY has been trending in such a fashion and, as long as Japanese Prime Minister Abe stays in power, this massive upward thrust should continue.