Want to make money in Forex trading? Use these strategies to get more return on your Forex trading investment. Plus some rules that will make you a better Forex trader.
Trading in the foreign exchange market involves a significant amount of risk, but does the risk worth any of your effort?
Before we continue, let me show you, what we will cover in this guide.
- Forex trading Basics/Fundamental
- Forex trading strategy
- The three most important choices in the Forex market
- 5 rules for successful Trading
How to Make Money in Forex Trading
Today, I’m going to share some tips that will help you make money in Forex trading. Whether you are a currency trader, a volatility index trader or a binary option trader, this guide will expose you to some of the secrets that most successful traders use to make sustainable income from the Forex market.
Forex trading Basics/Fundamental
The reason most traders lose their investment or fail in the Forex Market is that they failed to know or understand the basics of Forex trading. Let me warn you, if you want to make a long term career in trading and you don’t understand the fundamentals of Forex trading you are wasting your time.
Information or strategy can change due to some market conditions but the fundamentals hardly change.
So what are Forex fundamentals.
Market movement or direction
Market can go up or down, and it can dance at places called consolidation. Market direction will help you understand when to buy, sell or do nothing in the market.
Here we considers points in the market that attract attention, like support and resistance; swing highs, lows, double bottom, double top, and sometimes candlestick pattern, chart etc
Spread,bid, ask and margin call
Though spread changes often, it’s a basic tool you must understand and study before you even think of placing any trade.
Pips, Lots, Trading session
You need to understand the concept of using the right pips and the right lot size in trading
Limit, order, stop loss, take profit and price action
Limits, placing order, stop loss, take profit are some of the first thing you must learn and understand before even thinking of trading a real account.
Studies show that traders who understand how indicators works have 70% chance of developing a good trading strategy. You don’t just add indicators as a design to your chart, you need to know what they stand for and how they can help you make better choices.
if you don’t have an in-dept knowledge of the above listed Forex fundamentals, you are not a trader, you are a gambler
Forex trading strategy
For the records, the number one Forex trading strategy is trading on a demo account. This will not just build your confidence, it will give you a clearer understanding of the market, from there you can test how different indicators works, understand the market structure, endure the pay of losing and celebrate the joy of winning trade.
Trading in a demo account will help you develop, refined and build a strong trading strategy.
What to consider when developing a Forex Strategy.
Your trading pattern
Are you a day trader or a swing trader? a strategy that works for day trading may not necessarily work for swing trading.
This will help you decides the lot sizes to use, take profit and stop loss point.
Your trading session
You have to factor in the best time for you to trade depending on the market. If it’s currency trading, you need to understand the major trading session and decides which works for you.
Indicators to use.
Indicators help you make better decision on the market,but you can’t use all indicators in a chart at once. So, don’t just add indicators for fun or to make your chart beautiful. Know why you are adding any indicator and be convinced about the value it will add to your trading plan.
Sometimes, some trades failed to follow our trading pattern, you have to decide when to close and take profit or close and stop loss manually if the situation arises and include same in your strategy.
The three most important choices in the Forex market.
The three most important choices in the market is:
- Deciding when to buy
- Deciding when to sell
- and knowing when to waiting.
Buying and selling is what will ensure that you make money in Forex trading, waiting on the other hand will help keep your equity safe.
Knowing when to make any of this decision is very important to your success equation in trading.
5 rules for successful Trading
- Never risk more than you are willing to lose
- Eliminate fear and greed
- Don’t trade against the trend
- Use stop loss
- Never Stop Learning
In Conclusion, before thinking of placing any trade, make sure you know how the market works. You can only make good money if you have more win than lose.
Have a good money management skill, don’t trade if you don’t see the opportunity and make sure you respect your trading plan/strategy.