Top 5 Forex Trading Tips

There are a lot of numbers around the number of traders who earn money and the number of merchants who lose money. The most common is that 90% of traders lose money, and only 10% of traders consistently win. So what does this 10% of you put in this role. Equally important, the question is, what does a majority do, making them lose constantly. And in this article 10 tips for Forex traders will help you get the right way on your trip to the profits and make you 10% of the winners .

1-Set your goals and choose a suitable strategy to suit your personality:-

One of the first things you should do as a trader is to understand your trading goals. Most new forex traders come to the market, believing they know, but they really don't have a plan or any concrete goals. Just after you set some goals for yourself, you can start looking for different trading methods that will help you achieve these goals. Keep in mind, you should aim to be realistic in your expectations, and make sure that the trading methodology you choose fits your profile.

There are many questions you should answer for yourself. Do I feel comfortable occupying positions overnight? How much risk am I willing to take for every deal? Am I more comfortable trading with direction or opposite direction? How long do I have to devote to watching the markets? Will I trade to complete my current entry or do I plan to trade on a full-time basis?

These are just some things you need to decide on before you start.Once you have an idea of your trading objectives and what kind of trading is right for you, you should work on an appropriate trading plan that you can use to trade markets in an orderly manner so that the trading process becomes effortless.

2- Pursuing a trading plan and using multiple time frame analysis :-

Regardless of whether you are a trader at DayTrader, Swing Trader or Long Term Position Trader, you should always try to follow a suitable market trading plan. What this means is simply to start with a higher time frame chart and zoom from there to the trading timeframe chart. This will help you give you a wider lens through which to make the price move.

Many traders make the mistake of making trading decisions based solely on the time frame in which they are traded, which means the time frame for the signal.

For example, if they see a hammer candle model on the 4-hour chart, they take this pair of time frame without thinking about what can happen in the next higher timeframe, which will be on the daily chart in this example. In addition, the trader who wishes to trade the hammer signal that appeared on the graph in the 4-hour, can turn into a 60-minute chart to get a better trading entry.

In order to increase the likelihood of a profitable trade, it is always prudent to analyze multiple timeframes. What often happens is that you can either filter out bad deals based on the analysis of the higher timeframe or get additional confirmation of your trade. In both cases, it is likely to increase your chances of winning trade by following a top-down analysis method.

3- Testing of the special strategy :-

As traders, our mission is to find and implement high-probability settings without allowing our emotions to fall in the way. That's really. But to get here, you realize that trading revolves around controlling risks and knowing the odds. Through rigorous testing and validation of our forex trading strategies, we can be confident in trading and sticking to it in the long run.

You should know what the odds are for any particular deal within the arsenal of our trading settings. So how do we go about this? Easy and simple, we must conduct the necessary testing of our strategy on historical data. We can achieve our test objectives either through the Backtesting test program if you are using a trading system where the parameters are direct and can be entered and tested.

On the other hand, if you are a discretionary spot trader, you can achieve the reverse test through a manual process. You have to return in time through the date of the application price strategy, submit a manual record to win and lose trades, and the corresponding amounts.

Projection = (probability of winning * average win)-(probability of loss * average loss)

For example, let's say that Forex trading strategy produces a profitable trade of 50% of the time. Your average rolling profit is $400 while your average loss is $250. Accordingly, the expected average of each trade is $75 as follows: (0.5 * $400)-(0.5 * $250) = 75 USD .

4-Keep a simple trading, avoid using a lot of indicators :-

As a forex trader, you will soon realize that the use of indices in trading sometimes leads to adverse results. Most profitable traders will tell you that the best indicator is the price, and that every other indicator on your price chart is derived from the same rate. In the world of trading, since entry before anyone else is often the difference between a profitable or losing business, then I would like to emphasize, that we must try as much as possible to trade using abstract price tables and to study the price movement of our graphs.

Trading should not be complicated. If you can learn to read the price movement and understand the basis of price movement through supply and demand imbalances, you will be 90% ahead of forex traders there.

But if you're one of those traders who should have their favourite pointers on graphs, I suggest you narrow them to just one or two pointers that you can use and rely on to confirm. Anything more than 2 trading pointers on your chart, you're really just making the trading process more distracting needs to be.

Able to focus on price movement alone, using basic support areas and supply and demand levels. I think you will find that this will not only help streamline your business, but will serve you better from the point of view of total profitability.

5- Find out where the main support levels and resistance are :-

Understanding support and resistance is one of the key concepts in trading. Support and resistance are defined as the main price levels where buyers and sellers have shown sufficient interest and circulation to cause the price to stop or stop and to reverse the creation of a significant swing level. The trader will use these levels to measure future price levels as buyers and sellers are likely to enter the market in the future. You can draw horizontal price lines where the price is traded and reversed to create a support area or a significant resistance that needs to be monitored. It should also be noted that the higher the time frame at which the main support or resistance level is, the more reliable. For example, the level of support that consists of the daily graph is much more credible than the level that is set on a 30-minute chart. Support levels and higher time frame levels are those that have been formed over a much longer period of time, and certainly have more involvement during their formation.

In addition, most of the big players in the markets, those who can move prices, such as hedge funds, and other institutions, tend to monitor the levels of support and resistance that have been formed on the daily chart for example, much more than in the daily time frames The smallest. S/R levels can be useful in both trade entry and trade management. For example, if you want to trade a particular pair of foreign currencies, then you can start with a long position where the price is approaching the support level or if you are looking for a suitable time out of a short position, then you can use the support area for example, as a goal as well.