9 Secrets for Better Forex Trading

Forex trading is a great way to make money, but it is not an easy one.  Profitable trading requires patience, planning and practice.  There are some basic hacks that can help you find your footing in the market a bit more quickly and firmly, and we’ll list them below to help you get started.

1. You must know yourself to know your method.

There are so many different ways and methods to trade, you must choose a method that suits your distinct personality. If you’re an impatient person, for example, consider a short-term plan rather than a long term one, as you may find yourself itching to close the trade before the best close time.  If you’re a morning person, make sure you don’t choose a strategy that will operate mostly during your night hours, as exhaustion may compromise your decision-making abilities.  Think about yourself while thinking about your strategies – this self-understanding will pay off in the long run.

2. Find a broker that suits you.

Do research on all the brokers available in your area and carefully consider what you’re looking for in a broker and what offerings you’ll be willing to compromise on. Make a list of questions and compare the answers for different brokers, so you’ll feel confident in your decision.  What are the advantages and disadvantages of each broker? What kind of platform(s) do they offer? Is the platform compatible to your chosen trading method? How is their customer service? Where are their headquarters located? These questions will help you find a Forex broker that caters to your specific trading needs.

3. Consistency is the name of the game.

There are two schools of thought in analyzing the market and predicting future trends. Those who use technical analysis claim that the market is semi-consistent and has logic in its movements. Those who use fundamental analysis focus on the news rather than the market. Neither method is perfect, and good traders use both. But decide which methodology will be your primary method and stick with it.

4.Play close attention…to the time frame.

Most Forex traders spend lots of time looking at charts of the Forex market. There are many different types of charts but they all show basically the same thing. It is most important to pay close attention to the time frame of the chart you decide to use. A good rule to follow is to use a longer time for direction analysis and a shorter time frame to decide entry and exit into the market. Check out our videos to learn more about understanding the charts.

5. Make educated decisions.

To make sure you are making the right decisions, you need to calculate your gains and losses every so often. Take a look into your trading history- how many winning trades do you have? How many losing trades do you have? Then calculate the total amount traded in all your trades. This is an especially good idea to do if you are still learning about Forex trading. Check all the times your system indicated that now would a good time to open a position and whether or not you profited from it. Write everything down! It will help you make the right decisions in the future.

6. Manage your money carefully.

Understand that with every trade there is a chance you can lose money. But every trade you make will teach you important trading lessons and give you more experience. Keeping that in mind will help you accept the losses, which in the long run will make you a better trader. Additionally, make sure you know how to use leverage correctly. Fair warning: using leverage incorrectly can result in disastrous loss. 

7. Build your confidence.

The basis for successful trading in Forex is inner confidence. How do you get there? When you have a successful trade because you stuck to your plan, you will gain confidence. Remember to stay objective when trading and try not to emotions or self-doubt get in the way. You will be a better Forex trader if you remember this.

8. Do your homework.

The best time do your market research is over the weekend, when the markets are closed. Pay close attention to the news, what happened the previous week, and if anything is expected to happen in the upcoming week. Since the markets are closed, this is little pressure to make quick decisions. Instead you can take your time and make a well-thought-out trading plan for the week ahead. Once you come up with this plan, it is important to stick to it. If you decide to trade when the market gets to a certain point, wait for it! Self-control and patience are your friends in Forex trading.

9. Write it all down.

This is the best way to remain objective in Forex trading. If you want to open a position, create a chart with all the reasons why it’s a good idea. Then create a chart with all the reasons why it’s not a good idea. Make sure to include entry and exit points, emotions, anxiety, and level of optimism. This way you can trade objectively and refer to your notes when trading in the future.

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