The tricks of the trade on Forex

The tricks of the trade on Forex

The tricks of the trade on Forex

Trading in financial markets is hard work. Although some beginners believe that there are some tricks of Forex trading, with which they can cheat the system and get an easy income. In fact, of course, there is nothing of the kind. However, some secrets still exist.

With their help, You can minimize your trading risks (although no one can completely get rid of them). Knowing these secrets will help you avoid unpleasant situations in trading. So let's get started.

Secret 1 - always trade on the trend

Whatever Forex strategy you choose, try to always determine the main trend and trade only in the direction of price movement. It would seem that such tricks of Forex trading lie on the surface.

But in practice, many Forex traders forget about this for some reason. And they are starting to work, including against the trend. What can this lead to? First of all, the fact that among the profitable trades you will have unprofitable ones.

Of course, even in periods of trends, the price only goes in one direction. There are also corrections. But they can be so insignificant that, at best, You will close the deal at breakeven, and at worst - with a negative result.

Therefore, You should have a trader's tool with which you will determine the trend and its strength (by the way, the ADX indicator can be useful here).

Secret 2-trade systemically

The tricks of Forex trading are not limited solely to working on the trend line. It is necessary to have a system (not a strategy, but a system) that clearly defines both the rules for opening transactions, as well as the amount of investment and position protection.

Why is this even necessary? The fact is that systematization in trading helps not only to earn more steadily, but also to analyze errors. If You don't have a system, You won't be able to determine why You made the wrong decision.

To create a system, you can select the following aspects:

Assets to trade.
Trading time.
Timeframes for analysis.
Forecasting tools.
Clear rules for entering a deal based on the strategy.
Defining profit goals.
Position protection.
Rules of behavior in emergency situations.

Secret 3 - always limit your risks

Very often, traders make one significant mistake. They do not limit their risks. This should be done for several reasons. First, there may be sudden Forex impulses in the market that will close a margin call deal. In this situation, You will lose your entire Deposit.

Secondly, such tricks of Forex trading are necessary in order to avoid technical problems. If you suddenly lose contact with the server, your Stop orders will still work if the forecast is incorrect. And if you do not set them, You will have to wait until the connection with the server is restored.

Third, setting clear Stop orders also helps psychologically. It is always very difficult to close a losing trade manually. I want to wait a little longer: what if the market turns around?

Secret 4-using patterns

The tricks of the trade on the Forex mean and use patterns. They are, in fact, not so small and this knowledge will be useful to You:

Price channels. The price is very often clamped in the Forex channel, where it begins to trade from one border to another. At such times, it is easy enough to determine the entry point. This is the trick of Forex.
Gaps. Most often, price gaps in the market are closed. You can use this information to open positions.
Trading before important news. Very often, before publishing significant Forex statistics, prices are squeezed into a range and form price Action graphic patterns, which can also be used in trading.

There are also other tricks of Forex trading. These include, for example, proper capital management. It is not necessary to risk half of the Deposit in one transaction and increase the leverage just so that you can open as many positions as possible.

The tricks of Forex trading are also that you should try to look for currency pairs with the smallest spread, if it is not fixed. After all, the higher this indicator, the greater the risks You bear and lose part of your profit.

Speaking of tricks in trading, we can not fail to mention that Your own opinion about the situation in the market should be the prevailing one. Of course, this does not mean that you should not listen to analysts. But when making a decision, Your opinion should be the leading one.

Finally, the tricks of trading are also the ability to feel the market situation and use the right tool. You should not only use oscillators if there is a clear trend in the market. And do not try to work only with trend algorithms of Forex trading, if there is no trend.

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