eMoneyIndeed Make Money Online
There are so many Forex trading tips out there these days, it can be difficult to figure out what is useful, and what is simply the same regurgitated ‘advice’ that will not really work when you try to apply it.
These tips, hopefully, will fall into the category of useful, but not yet well-known. They will address important trading principles, and should help both new trades and those who are more experienced alike.
Read on to Learn How to Maximize Your Chances of Being a Successful Foreign Currency Trader
#1. Pay Attention to the 200 EMA Whatever Your Strategy
Whatever your trading strategy, it’s worth looking at the 200 EMA. This is something that many traders pay attention to, and that many traders react to – but that’s actually a good thing.
If a signal appears close to the 200 EMA, then it’s probably a good idea to wait until the signal actually cleanly passes through it, or to try to get in on a potential reversal.
If you want to test that theory, add it to a higher time frame chart, and then follow to see how the price reacted, historically, when it got close to the 200 EMA. You might be surprised how reliable it is.
Must Read – The Most Popular Trading Platforms
#2. Watch the 4Hr / Daily NY Charts
If you’re a US trader, then paying attention to the close of the charts for the 4hr and daily charts is a good idea. A chart that closes at midnight GMT, for example, will have a small fraction of a bar on it that sets signals off, just slightly.
For this reason, if you want to trade on a 4hr or a daily chart, with a USD pair, then it’s best to look at a broker that will close the candlestick when the US trading session closes. That’s the basis that people who analyze those charts work from.
If you aren’t sure when a chart closes, contact the broker’s support team, they should be happy to tell you if they are a reputable broker.
#3. Be Wary of the Asian Market’s Movements
USD traders focus on the period between the close of the NY market and the Asian opening, because they want to avoid the influence of false movements. Often, when the Asian session is active, a price will pull back, but then it will rebound in the New York session.
Traders should be aware of that, and take it into account to avoid the premature triggering of a stop or an order.
Also Read – Making Money Online Through Stock Trading – Steps to Follow
#4. Scalping Needs a Lot of Attention
A lot of people talk about scalping as if it’s a great way to spend just a few minutes interacting with the markets, and yet make a huge profit. This is not true. The reality is that scalping will involve shorter trades, but it also means that you need to spend time analyzing the markets to find the perfect time to scalp. Unless you want to rely on blind luck alone, you’d be much better off if you focused on longer trades that require less attention.
#5. Learn Using the Daily Charts
If you haven’t yet managed to make a profit, focus on the daily charts – they’re the easiest time frame to use for learning. They are long-enough that they aren’t overly polluted with noise, but short enough that the signals are clearer too.
You don’t have to worry about processing masses of information, but the signals still aggregate enough information to matter. A four hour chart, on the other hand, has a lot more noise than a daily chart.
#6. Don’t Use Too Many Indicators
Trading is complicated no matter how you do it. You’ll probably start with someone else’s strategies but eventually you will want to build your own. At that stage, you’ll want to focus on understanding different indicators.
Take care not to swamp yourself with too much information. If you use too many indicators, you’ll either make mistakes because the indicators provide confusing signals, or you’ll find yourself spending too much time trying to understand them, and not enough time trading.
You May Like – The Beginners Guide to Investing – 3 Smart Tips
#7. Not all Strategies Work for all Traders
Not all trading strategies are equally effective, or designed for the same time of person. A large part of trading comes down to personality. If you’re excitable, you probably don’t have what it takes to scalp – you need to be cold and clinical for scalping to work well.
If you’re impatient when you’re looking at the markets, you might do better with a set it and forget it longer trading strategy, where you exercise discipline and leave your trades alone until the time is right.
#8. Exits and Entries Both Matter
A well developed strategy isn’t just about entering the markets at the best time, it’s about having the right exit points as well. Traders often neglect their stop losses – and this is what leads to wasted profits and big losses.
Scalpers should be looking to make small amounts of profit on a regular basis, while longer term traders will likely want to opt for bigger profits – which means greater risk – but they’re holding positions for longer.
Some long-term strategies could involve placing just a couple of trades per month, but will hold on to the positions until they can cash in for big amounts of money.
Must See – The Most Profitable Online Business Ideas
#9. The Calendar Matters Too
It pays to learn the best times of the year to trade. For example, the stock market tends to do a Santa rally just before Christmas, but the Forex markets tend to be lower volatility in that time, because so many traders are on holiday.
This makes it a bad time for long-term traders. There may still be opportunities for scalpers that are very attentive, but a lot of other traders just log out until the new year.
#10. Support and Resistance are Zones, not Lines
The support and resistance points on your charts aren’t hard lines, they’re zones. Once you understand that, you will be able to plan your trades around it.
Give yourself breathing room with your trades, rather than expecting a hard cut-off once those points are reached. Experienced traders already know this, and leave a bit of space on their stop losses, but many novices forget to do so.
Related Articles
Featured Post
