It’s all about getting the law of averages to work to your advantage when it comes to trading.
There is no such thing as a quick fix for profitable trading. You must repeatedly trade a proven forex trading technique for the tactics to operate well enough to yield an overall profit over several trades.
The method is simple. If you trade with discipline, you will prosper; if you sell without penalty, you will fail. Many foolish investors want to quadruple their money in a matter of days or weeks. However, they don’t realize that forex trading is just like any other investment, not a get-rich-quick gimmick.
- Trade according to your timetable.
Here’s the thing: if you don’t set a timetable for your trading, you’ll end up trading all over the place. You’ll be looking for trading setups in the 5-minute, 30-minute, 4-hour, or daily timeframes. You’ll become paralyzed by analysis paralysis.
The daily timescale, for example, maybe in an upswing, but the 15-minute timeframe may be in a downturn. Should you stick to the 15-minute or daily timeframes?
You’ll only trade your timeframe and disregard everything else once you’ve defined it and stuck to it. Things will start to make more sense because you’ll only pay attention to what’s essential to your trading window and ignore the rest.
- Ignore forex signal services.
Don’t do it if someone tells you to purchase EUR/USD with a 50-pip stop loss and a 100-pip goal. If you leave your trading to someone else, you’ll never learn how to trade.
In your head, you’ll have a lot of competing thoughts. So stay away from signal services; they will not assist you in your trading profession.
- Use variable lot sizes instead than fixed ones.
Many traders make this error because it is straightforward to risk one mini lot on each trade. After all, it is simple to enter that amount into the MT4 platform, for example.
However, the issue here is that the volatility of different currency pairs varies. When you compare the volatility of the USD/JPY and the USD/CAD, you’ll notice that they’re not the same. Furthermore, the pip values of different pairs are varied. Visit here to get more insights best south african forex brokers
- Set your stop loss to the side of the price chart.
In the forex or stock markets, you want to put your stop loss at a level that will invalidate your trading setup. It must be placed at a point where the market will struggle to achieve your stop loss.
If you’re in a long trade and you bought because of a bullish setup, your stop loss should be set at a level that the price is unlikely to reach.
Your stop loss may be below support, as this is an area where potential purchasing pressure could push the price higher. As a result, you’ll want to place your stop loss a bit further away from support.
- Stick to your trading strategy at all times.
You are biassed if you wish to sell or buy a specific pair based on trade calls you see on websites or friends informing you the team is overbought/oversold. You should always be on the lookout for convergence in our field. When the majority, if not all, of your criteria have been met, and technical data is available, you should proceed with the transaction based on your analysis.
Suppose you are continually checking your trades every three minutes and can feel your heart pounding rapidly when you place a deal. In that case, you are either risking too much of your capital or have not yet mastered your emotions enough to trade responsibly. You will become profitable if you maintain the same consistency in your trading process and execution strategy.