The forex market is the most popular financial market in the world, popular due to the liquidity of major forex pairs, as well as because it’s a 24-hour market. Here are some tips to improve your forex trading experience:
1. Be educated
Which currencies will you trade? If you are squeezing your trading in around a job, then choose a trading session that will work for you:
• The Asian trading session – opening at 0:00GMT and closing at 9:00GMT
• The London trading session – opening at 8:00GMT and closing at 17:00GMT
• The New York Trading session – opening at 13:00GMT and closing at 22:00GMT
Once you’ve chosen your forex trading session, which currency pairs will you choose? Generally Asia-Pacific currencies, like the JPY, AUD and NZD are active in the Asian trading session. European currencies are active in the London trading session, like GBP/CHF, GBP/JPY, GBP/USD, EUR/GBP and USD/CHF. And in the New York trading session, major forex pairs (paired with the USD) are more liquid, along with some European currencies due to the session overlap – AUD/USD, GBP/CHF, GBP/JPY, GBP/USD, USD/CHF and USD/CAD.
Although most of your forex education will come from trading experience, a trader should learn about the markets and economic factors that affect them, using the media and online resources, along with market updates than some forex providers have on their sites.
2. Make a plan
We’ve already discussed when you want to trade forex, and this will probably influence the currency pairs you choose to trade. So why are you trading, then?
Setting goals gives you a framework for your forex trading – not only are you more likely to achieve your goals if you clarify them, but if you have a specific goal for a trade you are also more likely to get out of trades with your profits before the markets turn, rather than greedily waiting for an extra pip.
Once you’ve defined your objectives, find a system and stick with it – take every trading entry, adjust every stop, and close every trade as the system says.
If you aren’t sure about your trading system, being consistent is the best way to find out whether it works or doesn’t. And, if it works, sticking to it will result in more consistent profits.
Your forex trading system should address:
• Trading rules for entering, adding to, and closing positions
• What to do if the internet connection, telephone or computer fails
• What you will do if you are unable to trade due to holidays or illness
• What percentage of your account you can afford to lose
• How to set orders for when the market opens
Once your plan is in action, keep records to monitor your success. 대여계좌
3. Reduce your risk
You should never risk more than 2% of your capital per fx trade – this means that even if you lose ten trades in a row you have still only lost 20% of your account. The more you lose on your trades, the more difficult it is to turn your situation around, so doesn’t it make sense for you to just risk a small percentage per trade?
So if you had $1000 capital and you lost 2%, you would be left with $980. You would need to make back $20 to return to your original equity value, that’s only 2.04% of $980. If you continued your streak of bad luck for ten trades, losing 20% or $200, you still only need to make back 25% to get back to your original equity value (200/800 x 100 = 25%).
This may seem like a lot, but imagine if you had lost $750, or 75%, on a single forex trade, you would only have $250 of your capital left, so would need to make a 300% return to get back on top (750/250 x 100 = 300%).
As you can see, the more you risk, the less likely you are to get it back.
4. Cut your losses
If you are just trading forex for an hour or so a day, then find a trading platform that allows you to set automatic stops. An automatic stop allows you to program your trade to exit automatically if the market turns against you to a certain degree, and it means you know your maximum losses if you can’t be in front of your computer all day.
For example, if you bought the AUD/USD at 1.5789 with a stop loss at 50 pips, your stop is set at 1.5739. That means if the value of the AUD drops to that level, your trade will be automatically closed and you won’t sustain any more losses.