Today, trading is an action open to everyone. Indeed, it is possible to bet your money on the foreign exchange market from your home. But it is not easy to succeed in having good profits every time, even if you are an experienced trader. That’s why we offer you rules to take into account to succeed in a Forex trading strategy that will yield the most gains.
Rules for a successful Forex trading strategy
Many individuals are getting into Forex trading every day. Yet there are as many of them as those who fail. So, to avoid the fiasco, here are some rules you can take into account:
A real trading strategy is necessary.
Designing a strategy begins with mastering a few fundamentals. It is about knowing how to interpret the graphs of the financial market. Forex sites usually present charts you should consider before making a buy or sell action. Good knowledge of these fundamentals is done gradually. It is only after mastering these essential points that you could manage to generate significant gains;
Bet on the quality and not the number of trades.
You don’t need to make multiple trades to make huge profits. So you have to put value in your trades. Once again, this requires progressive learning.
Always have a correct risk-reward ratio.
It is for the trader to find a strategy that allows him to have profits on his trades, mainly when he bets on a daily basis. Concretely, the risk-reward ratio means that the trader, for each profitable transaction, earns at least the equivalent of the risk he has taken, which is called stop loss. This implies that if you are used to betting, say 20 pips per trade, you should aim to earn 40 pips in a winning trade.
Limit your risks in Forex trading.
Many traders, especially beginners, are used to betting a significant portion of their capital, up to 10 or even 20% in some cases. A very risky operation, according to analysts, because if the trader accumulates such investments without significant gain, his account may suffer. This is why they are advised to favour the trading trick whose risk is between 1 and 2%. This option can allow you a priori to accumulate several hundred trades without too much difficulty.
Learn the technical analysis
Learning technical analysis for every trader aspiring to become a professional is quite important. Technical analysis is critical to avoid any surprises on the market, such as the so-called bull trap. Making trading decisions randomly is not advisable at all. Also, when you deal with the broker who executes the trades for you, you need to have a clue of what it’s all about. There are so many courses online for free where you can tackle the tech analysis on Forex, stocks or commodities. The convenient option would be to follow the broker’s training you have chosen.
Choose reliable broker
Besides excellent training resources, there are other aspects the broker needs to be in line with. First and foremost, it has to offer good trading conditions in terms of spreads, rollover fees etc. Also, the broker has to offer a user-friendly trading platform that is convenient for rookies as well as seasoned traders. If you already have advanced Forex trading knowledge, make sure the broker offers enough technical analysis tools. Finally, having a demo account is always a plus.
Train yourself on a demo
Demo accounts represent a great way to train yourself in Forex trading and to try many strategies before investing real money. You only need to register on the platform offering this option.