FX Trading Online

Forex Trading Tips 2

Tip 8: Do not trade when you are sceptical - learn to stay out. If it is not clear where the market will move do not trade. In this case saving your existing capital is a better choice than taking additional risks and losing money.

Tip 9: Learn to use protective stops and respect them (do not move them)
Hoping that the market will turn in your preferred direction is a very bluffing hope. By moving a stop loss further you will increase your chances to end up with a much bigger loss.

Tip 10: "Keep it simple and stupid" (KISS rule) for indicators, signals and trading strategies.
Too much information will create a vague picture of when to trade and when not to. To prevent too much confusion you should create a simple but working method of trading Forex.

Tip 11: Think about risk/reward ratio before you are entering a trade.
How much money can you lose in this trade? How much can you gain? Now, you should make a decision if the trade is worth entering. 

Example: if you are looking for a possible 40 pips gain and a possible 30 pips loss, such conditions should not be traded. Compare it with the situation when you have 50 to 100 pips of a potential gain and only 10-20 pips of a possible loss. This is the trade you should look for!

Tip 12: At no time add positions to a losing trade. Do add positions when the trade has proven to be profitable.
Do not allow several losing trades in a row to become a snowball of losing trades. When it is obviously not a good day for you, turn the monitor off. No trading for one day can help to prevent back to back losses. You should not try to take revenge!

Tip 13: Let your profits run.
Let your position be open as long as the market wishes to reward you. Of course, for this you need a good exit strategy, otherwise you will risk to give all your profits back.

Running two or more open trades gives an option to close some positions earlier and keep others running for higher profits.

Tip 14: Cut your losses short.
It is better for you to finish unprofitable trades quickly than waiting for the situation to get worse. Do not put a stop loss too far - it is your money which you risk in every trade. Better calculate the best point to enter where a potential loss would be minimized. And again respect your stop and do not move it.

Tip 15: Trade currency pairs in respect to their active market hours.
You should learn about overlapping market hours: when two markets are open and highest volume of trades is conducted.

For example, Australian and Japanese trading sessions are overlapped from 8 pm to 1 am EST. At that time you can successfully trade AUD/JPY currency pair.

Risk Disclosure: FX Trading Online will not accept any liability for loss or damage as a result of reliance on the information contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets. Currency trading on margin involves high risk and is not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.