Forex Trading Insights – 10 Things You Need to Know to Be a Successful Trader

Forex Trading Insights – 10 Things You Need to Know to Be a Successful Trader

how to be a Successful Forex Trader

The Forex market is highly volatile. Unpredictable as it is, trading is on speculation. This market deals in currencies from across the globe. Traders speculate on the price movement or about the valuation of the currencies. The right guesses make money and the wrong ones, lose money. This is the basic fundamental on which an FX  trader trades. However, trading in FX is fraught with risks. Yet there are suggestions and insights, from experts, that help traders to play smart and be successful.

Here are 10 insights and tips to bear in mind while trading in FX.

1) Know when to play the market:

A trader might be full time into trading. But that should not mean that he trades every day, without fail, even if the conditions seem unfavorable. Here stemming of emotions is extremely important. Sometimes a trader has to take this call due to economic reasons too.

2) Buy and sell at the right time:

When the market is doing good, traders may feel tempted to buy, at that point in time, thinking that the market will continue to be volatile and the prices will keep on an upswing. This is one of the worst mistakes to make. With the probability of an upswing, there is every possibility of a pullback too. Vis a vis this, the fact also remains that many a times traders end up selling when the prices fall, fearing a bad phase of earning way below investments made. Here the traders behave in an absolutely illogical order. About this Kishore M, a Dubai based FX expert says, ” The fundamental is to buy when the market is down since the market has to pick up due to its volatility. It is therefore sane to sell when the market is high”.

3)  Money management is a must:

This is an obvious one. FX is all about trading with investments made on currency pairings. It is the trader’s money, which each individual trader must try and safeguard and hence play safe.

A trader may trade in many trades and risk a huge chunk of his money or he may choose to trade in a few known trades and risk a lesser percentage. Here the idea is to lessen the impact of losses and ensure trading where a trader is confident. Money management starts with investments but does not end with a win or a loss. The cycle of investments and gains or losses is vicious. The catch is to protect the gains while planning your investments better.

4) Follow the trend:

Basically means that every trader should go with the flow. If he tries to swim against the market swing, it will destroy his account. If a trader plans on going against the trend at all, it is either because he is too seasoned to know that the tides will turn in his favor or he is just gambling.

5) Keep your emotions in check:

Profits and losses are a part of trading. While a profit can definitely give a trader a big high, losses should not push the ego buttons the wrong way. Kishore M, says,” Traders tend to play harder when they are making losses, definitely with a hurt ego to ease off losses. This proves to be the death knell, which can kill accounts”.

6) Optimize on opportunities:

While entries and exits into the market are hinted at by trading tools, all the elements rarely cross paths to present to a trader with the perfect swing to make profits. If that ever happens, and the trends are precise as predicted by your strategy, jump in to optimize.

7) Patience pays:

At times, the market is not favorable or rather the conditions are against a trading strategy. Nothing much can be or need be done in such a case. Here a trader needs to learn and understand, that at times “nothing actually happens in the market”. Trading forcefully is wastage of funds because it ensures losses. Hence patience for the market to pick up is what is patience is all about, in the FX trading world.

8) Make technology a friend:

Today markets move fast. Tracking through news and phone calls, makes decision making way too late. FX brokers have trading platforms and tools available for traders to dabble in and use. In fact, for new traders, they have tools that let the new ones practice so that the new traders may learn to trade and make their beginners trading strategy. Hence, a trader must learn to use technology to advantage.

9) Use Stop loss order:

This cannot be emphasized on enough. Stop loss orders should be the first check to be put in when you are trading. This is when you are into Algo trading or automatic trading. The computer software needs to be pre-instructed to stop trading on a trader’s behalf after a certain level of losses has been incurred. These would be the bearable losses for a trader. Stop loss orders are almost the lifesavers in FX  trading.

10) Trading is “win some and lose some” :

Trading is not a hobby. FX trading especially is not for all. It has huge amounts at stake. Hence while entering the FX market as a trader understand that it is not  always raining profits there. There will be losses and there will be profits.

Conclusion:

These trading insights are words of wisdom from seasoned traders. Traders would know many of these tips or insights but not all will adhere to these or remember them. Traders who have these insights to share are people who have burnt holes in their pockets.

10 insights to be a successful trader

Know when to play the market

Buy and sell at the right time

Money management is a must:

Follow the trend

Keep your emotions in check:

Optimize on opportunities

Patience pays

Make technology a friend

Use Stop loss order

Trading is “win some and lose some”

2018-10-29T09:04:36+00:00