Trading on the Forex market can be sometimes really hard and that is the one of the reasons why this site exist, today I want to share with you guys three things that you really need to do before you open next trade at the largest market out there. So Just relax for the next few minutes and read this carefully because I can tell you right now, your profit will at least double if not triple with this three things! So let’s start…
Step #1 – Confirm Your Analysis on Larger Time Frame
Ok let assume that you got done some sort of analysis on 30min-1hour chart, and your analysis is showing possible bearish movement on the EUR/USD pair (this is all just example), and you are ready to execute sell/short trade on your account. But wait, just for next few minutes and check what larger time frame is telling you!? If price is pushing higher on a daily chart for few month there is a lot of chance that bullish movement is more likely to continue, is this make any sense to you? I think many of new traders rush to quick into executing trade and that is the main reason why they fail, but if you want to make money you always need to look at the current trend because first rule of forex market that you must follow the trend.
Conclusion of the step #1
Check your next trade on a bigger time frame and if you get confirmation you can proceed to next step…
Look For Fundamental News
Fundamental news got a big factor on the currency market, so you need to know fundamental data if you want to be a one step closer to achieving better results. If we use again EUR/USD pair for example, we need to go to economic calendar and try to get possible news that can impact this currency. Maybe market won’t react a news like you want but still you need to be aware of what is happening in Europe and United States, reason is simple all major banks and hedge funds is looking at them and they are moving market not you so stay with them…
Conclusion of the step #2
Check your favorite economic calendar for news related to country’s which currency you want to trade and write it down on paper.
To become successfully trader you really need to work on your risk, this is what separate winning and losing traders, this is what will give you more profit! In last five years of my experience I meet over 200 traders and every successful trader told me that they usually risk around 1-2% per trade, This is something that I can agree with all of them, My risk in the 90%of trades are just 1% but if my wave counts show me something good I am willing to put 2% or 3% as risk per trade! So if your account balance is let say $10,000 and you want to risk 1% per trade that will be $100 and based on that you can chose your lot size. Before I enter a trade I like to see risk/reward ratio (how much money I am willing to risk/how much profit I can make) and only if my r/r is greater than 1/3 I am willing to execute trade. Risk and R/R you need to decide with yourself I can’t tell you what is the best (I told you mine but this is not perfect for everyone), so take now few minutes and think about this!
Conclusion of the step #3
Always have a define money management plan, chose best risk/reward ratio and risk that suit your trading style and you are one step closer to becoming better trader.
Ok these are only simple tips that can improve your trading skills, maybe not immediately but give it a few tries to gain some practice… This step will help you to feel more relax, so that is another plus why you need to consider using this in your everyday trading. I really hope this article help someone, and in the next few weeks I will try to write more helpful articles that will make you successful trader as I am right now!
You think you have useful advice for readers of this site, just post it in comment and let help more people to become successful!
Enjoy Your Trading Carrier,