Become A Better Forex Trader With These Tips

bitcoinhealthcoin
September 14, 2022
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Forex

In forex trading, some traders make money, while some lose, and you can find a lot of figures regarding the same on the internet. Most commonly, 90% of traders lose their money, while 10% can make consistent profits. So, what’s the 10% of traders doing, making them stand apart from others? And also, what the majority of them are doing wrong, is causing them to lose trades consistently.

If you are looking for the same answers, here are the top 10 forex tips that you can apply while trading forex to help you be on the right path, trade profitably and be closer to those 10% traders.

Also Read : Significance Of Leverage For Forex Beginners

  1. Be Clear Of Your Trading Goals And Choose A Trading Strategy Suitable To Your Personality:

The very first thing you should do as a trader is to determine your trading goals. Most traders enter the forex market thinking they know everything but don’t have a precise trading plan or concrete objectives. Only when you have set some objectives for yourself you would be able to find suitable trading methods to achieve those goals. Always remember that your aim should be as realistic as possible. Also, ensure that the trading method you choose aligns with your personality.

Once you know your trading goals and what kind of trading strategy will be best for you, you can start working to create a detailed trading plan for effortless and systematic trading.

2. Always Take A Top Down Approach And Use Multi Time Frame Analysis:

Irrespective of whether you are a day trader or swing trader, it is always recommended to take a top-down approach when trading in the market. It means that you must start with a high time frame chart and then zoom down to your trading time frame chart to get a better perspective of price action. You must do a multi-timeframe analysis to increase your chances of winning a trade.

Forex Trader

3. Test Out Your Trading Strategy:

As a trader, it is your job to search for high-probability setups and execute them without allowing your emotions to come in between. However, to reach this point, you need to understand that trading is all about risk control and management. And, it’s only through testing the forex strategies that you can become confident in trading sticks in the market for a long period of time.

4. Keep A Trading Journal With Yourself:

One of the essential trading tips to trade forex like a pro is to keep a trading journal. A trading journal should contain a record of all your trades. This will help you understand your thought process better. As a trader, you must also practice discipline and regularly update your trading journal. Ultimately, you could become your own trading coach and improve your trading processes.

5. Keep Your Trading Simple:

For a forex trader, using too many indicators can become confusing. Most profitable traders believe the best indicator in forex trading is price. You don’t have to complicate everything when trading. Using one or a maximum of two indicators to keep your trading simple is best.

6. Always Trade On Higher Time Frames:

To improve their trading without putting much effort, a trader can switch from the lower time frames to the higher ones for better profitability and lower transaction costs. Additionally, trading on high timeframes allows traders to choose the best setups and doesn’t require you to always stick to the computer screen.

7. Know What Your Resistance Levels Are:

Resistance is a crucial concept in trading because many traders use it to predict future price levels where buyers and sellers can likely enter the market. Additionally, they tend to be more reliable if the resistance levels are formed in higher time frames.

8. Check News Events Before Executing A Trade:

Scheduled news events can create high volatility in the forex market, so all forex traders need to stay on top of any news event and releases for currencies they are interested in trading. You can find many websites on the internet where economic calendars are available to stay informed about such events.

9. Focus On Trading Price Action:

Forex traders should pay attention to price action to see things more clearly. They need to study how the prices are moving to gauge the overall market direction. You can easily read price actions through charts these days. In short, a price action methodology is a logical approach you can follow while trading forex.

10. Set Realistic Trading Goals:

The last tip you can follow to become a better forex trader is always to set realistic trading goals for yourself. If you are chasing something unrealistic, you are bound to fail. So, why go in such a direction? There are already so many distractions for a trader to deal with, do not overcomplicate things by setting unrealistic goals.

Author bitcoinhealthcoin