The majority of the new forex traders are often choosing day trading as their first trading strategy. The reason is this strategy allows them to gain fast profit since all trades are closed within a day. Regrettably, most of them end up getting more loss trades than winning trades at the end of the day. Here are several forex day trading tips to make sure this won’t happen to you:
1. Do not trying to take several currency pairs at once
You will find tons of resources, tips, and suggestions and part of them might be accurate, but it’s just crazy to attempt to follow all of them. You’ll find yourself with a handful of charts from various currency pairs, trying desperately to comprehend them, and wind up getting even more overwhelmed with more and more losing trades.
Concentrate on 1 currency pair and build a solid feeling in it. Learn the ideal time to trade that currency pair. Uncover the best method to get profit from it. Get better at that currency pair first before switching to another.
2. Keep the indicators in your technical analysis at minimum
A trading system with a variety of indicators may appear superior and sophisticated, but it does not ensure a winning trade. Conversely, history has shown that a simple trading system can do better. Use a trading system that only employs a few indicators to discover the entry and exit points.
3. Use trading system that can adapt or use two sets of trading system
There’s two conditions in the forex market: trending and non-trending. You have to be capable of taking advantage of those two conditions in order to make profits on a regular basis. Figure out how to recognize a trending and non-trending market. Becoming accustomed to a distinct currency pair greatly helps in this matter.
Furthermore, there is condition where your technical analysis and standard methods will not work: when news is revealed. Study fundamental analysis and how to take advantage from the news. Sometime, you can even get far more than you typically have through the use of news. If not, if you’re not actually sure, simply try to keep from trading when the news is released.
4. Know when to get in and get out from the market
Identifying an entry point is one thing, but figuring out when to get out is a whole different matter. Although you might be planning to watch your trade (as you are sure that it’s not going to take that long), you will still need to put your stop loss and take profit orders.
Though it may be okay to remove your take profit order if you think you can obtain more, never ever take out your stop loss order. Stop loss order will keep you from losing all of your investment from a single blunder. If the price in fact hit the stop loss point, just let it go and concentrate on the next opportunity.
Here’s the key issue: many traders think that they can get tremendous amount of profits in a day with day trading, yet they don’t want to get through all the efforts and time required to get better in it. Hopefully, those forex day trading tips above can help you to avoid newbie’s mistakes and get better in trading currencies.