Top 5 Forex Trading Tips That Will Make You A Better Trader
If you are going to have any real success in the world of foreign-exchange investing (Forex) there are a number of tips and tricks you have to have in your back pocket – the same tips and tricks, strategies and tactics used by the most successful Forex investors on the planet.
The market moves so quickly and sentiment changes so rapidly that abiding by “rules” in the world of Forex will gobble up any chance you have of profit. But with these tips and tricks ready to be deployed at a moments notice – at just the right time – you’ll be able to make smarter and more strategic trades that boost your odds of turning your financial dreams into a reality faster than you thought possible!
Let’s dig right in!
Define Your Goals
Just as you wouldn’t jump in a car to head out on a cross-country trip without punching the destination into a GPS (or at least looking at a map) you can’t just jump headfirst into the world of Forex and expect to make a mountain of money without an idea of what you want to get out of your trades, to begin with.
Clear goals, aligned with a specific trading style that works for you, will always help you outperform investors that are just sort of flying by the seat of their pants. Maybe you want to date trade, maybe you want to be more of a position trader, and maybe you are more interested in “sit and hold” kinds of opportunities with a different risk profile altogether.
Find out what your goals are first and then jump right in.
Choose the Right Broker and Trading Platform
Secondly, you need to make sure that you selected the right broker and the right trading platform to help you make your trading goals and strategies come to fruition.
There are a bunch of different options out there to pick and choose from, some better than others, but a little bit of research and online broker reviews should help point you in the right direction. You want to feel comfortable with your platform, comfortable with its reputation, and comfortable with the tools and technology it offers to help you execute these kinds of investments.
A Defined Methodology
Top Forex investors will never make a trade until they know exactly why they are making the decision right now, at this moment – but also until they know exactly how they are going to profit from this decision (and when that profit is going to come down the line).
Far too many new be Forex investors jump on board Forex signals that look right, trades that look exciting, and investments that look smart and savvy. But then they are left holding the bag without knowing when it’s time to move on from that kind of trade or execute another trade that actually unlocks the profit potential hidden inside of the first move.
There are a lot of different Forex methodologies out there you can research and look into but at the end of the day, you have to find something that resonates with you, resonates with the kind of money you want to make in the Forex market, and makes sense with your goals and overall trading strategy.
Figure Out Your Expectancy
Expectancy in the Forex world is a formula used to figure out just about how reliable your system is over time. It lets you know whether or not you are making the right moves or if your system needs a little bit of adjustment.
What you want to do is look back at a specific amount of trades (maybe over the past month, a couple of months or year) and “back test” how profitable your winning trades are versus how much money you’re losing trades lost.
This will help you average out your overall expectancy of winning each individual move you make if you keep running the same system. If the system isn’t giving you a high expectancy it’s time to make adjustments.
There’s nothing quite like the excitement of opening up a new Forex account and jumping headfirst into the world of this fast-paced, roller-coaster style investment vehicle.
At the same time, real money is on the line – your money is on the line – and you need to think about minimizing your risk, minimizing your losses, and “missing small” on opportunities as they come down the line.
Everyone has a different tolerance level for risk but you’ll want to figure what yours is ASAP. The last thing you want to do is lose monthly expense money on a risky Forex bet just because you ignored the mantra of “miss small”.