BC: Tips for Success in Forex Trading – Punch Newspapers

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These concepts from an experienced trader will help you succeed in Forex.
Our trader highlight is Ebuka Ambrose, a skilled trader with over 2.5 years of experience. He has anchored many educational events, both virtual and physical, for OctaFX. Here is one of his latest Question and Answer Sessions with Ozo.
Making sense of Forex Trading
What is Forex? Forex simply means foreign exchange. The Forex market is a global market where currencies are exchanged or traded. It is the largest financial market in the world, with a total daily liquidity of $6.6trn. This means at least $6.6trn is traded in the Forex market every day. Can you imagine that?

Let’s consider the currency exchange we do when travelling abroad. You sell the currency of your home country to get the currency you will need in your destination country using an exchange rate.
The main objective of Forex trading is to buy or sell a currency in relation to another currency for profit.
But how does one make profit buying and selling currencies? The answer is basic economics.

Supply and Demand
Currencies fluctuate based on supply and demand because exchange rates are subject to volatility. You profit when you take advantage of the difference in value for a currency when we buy in relation to when we sell, and vice versa.
For instance, if you buy $100 worth of U. S. dollars at the rate of 500 naira to a dollar, you have purchased 50,000 naira worth of U. S. dollars. If you were to sell the naira later, when the exchange rate shot up to, say, 600 naira to a dollar, your $100 would now be worth 60000 naira and make you 10,000 naira in profit.
You’ve heard the phrases ‘Buy low, sell high’ or ‘Buy the dip’. Understanding market conditions and their implications for currency fluctuations helps improve the accuracy of your predictions of market movements. This is how you make Forex trading profits.
Tips For Success In FOREX Trading
Avoid Unreasonable Expectations
The Forex market is one with high liquidity, so it’s imperative that you approach it with a practical mind. You want to set realistic goals and keep fear and greed out of the equation.

Trading is an art and should be approached as one. There is a steep learning curve with rewards in the end. Although you cannot become a master in a couple of weeks or months, the great news is, Forex trading mastery is certainly attainable.
Watch this video that likens Forex to different art forms.
Know thyself
The best forecasters in different industries are usually the most self-aware people there are.
Key: Spend a considerable amount of time in conscious introspection.
Knowing the kind of person you are informs your goals, expectations, and trading style. This is an important thing to keep in mind as you want to evaluate the risk profile for whatever trading strategy you decide on. Can you stomach the risk of loss for prolonged periods at a time? You’re likely to adopt long-term trading, leaving your trades on for weeks to months. Are you incapable of going to sleep without closing a trade? You’ll likely adopt day trading.
Define your goals

Your success in Forex trading is determined by you and only you. One important step before you attempt measuring your trading success is to determine what exactly success means to you. Setting a clear goal helps you make calculated moves to get there.
Bonus tip: It helps if you print your goal out and visualize it.
You have to know if your trading methods are conducive to your goal.
Enjoy your little beginnings
The initial learning phase of Forex trading shouldn’t be rushed. You need to invest your time more than your money in this phase. Solid foundations make solid structures, so take the time to understand the basics—terminology, trends, orders—before shifting focus to learning how to analyse the markets. While the majority of trading knowledge does come from trading and experience, a trader should learn everything about the Forex market before delving into it. This includes the geopolitical and economic factors that may affect your preferred currencies.
Don’t make beginner mistakes
Going ahead to trade without prior understanding of the market, or giving in to greed or irrational FOMO, among other popular beginner mistakes, will cause you to lose your trading capital in no time. It is a well known rule that you should only risk 1-2% of your trading capital on a trade. Likewise, you should always implement proper risk management tools in your trading, such as stop-loss and take-profit orders. Remember these and the forces will be in your favour.

Analyse like a learner not a pro
Research from Tetlock and Mellers shows there are two kinds of forecasters: one that usually adjusts  ideas in light of unexpected events; and the other kind that rarely does. While your trades should always be backed by comprehensive analysis, it is important to criticise your analytical frameworks from time to time. People who are great at forecasting market movements keep an open mind when it comes to their beliefs. To be a great Forex trader, you should be quick to accept it when you are wrong and not let your ego get in the way.
Research, practice, repeat
In addition to criticising your analytical methods often, read and research! No one is successful without opening their mind to knowledge. Benjamin Franklin once said: ‘An investment in knowledge pays the best interest.’ In other words, getting adequate knowledge about the Forex market is important to help you make informed decisions when trading​.
Read about the latest trends in the market and what the industry professionals are into. Find educational content. For starters, go to the educational section of the OctaFX website.
Test out strategies using your DEMO account. Never go live without testing or when testing a strategy. Trading on a practice account will immerse you and give you insights into the strategy before you’re confident enough to trade using a real account.
Document everything

Keep a trading journal where you document your entry and exit points and the ideas leading to those decisions. Pay attention to emotional reasons like anxiety, greed, fear and note them. Studying past trades gets you insight into your behaviour, methodology, how often you stick to your strategy, if your strategy really works, and how to modify all these for increased profit. This way, you will develop the emotional stability needed to follow your trading plan.
Always review your strategy
Calculate the reliability of your current system. Pick your last 5–10 trades to measure your profits and losses.
Keep in mind that leverage is a double-edged sword
Traders use leverage to enhance the profit from Forex trading. Leverage is essentially borrowing capital from a broker that gives a trader the advantage to buy and sell more currency. Understanding that while leverage may boost your profit capacity, it can also amplify your losses is a first step to navigating this concept. Forex traders implement strict trading strategies that include the use of stop-loss orders to limit their potential losses, as well as moderate and conservative lot sizes that can give good profit and minimise margin loss.
Prioritise capital protection over profit
Being one of the most actively traded markets in the world, Forex has the potential risks magnified for traders compared to other markets. It is a lot harder to get back from a loss than it is to grow your trading balance. In order to avoid losing money in the foreign exchange, do your homework and look for a reputable broker. Minimise risk and increase winning odds to your favour when testing analysis techniques by using a practice (or DEMO) account. Treat your trading as a business by documenting everything and staying in the profit zone. The moment you start to make consistent losses, your business has failed. Avoid failure by using proper money management techniques and controlling your leverage.

Choose a reliable broker
You want to trade with a broker that gives you the opportunity to efficiently utilize your trading skills. There is a lot of uncertainty around the Forex market and, frankly, your broker shouldn’t be one of your headaches. Finding a broker with all the right tools to confidently access the Forex market is a skill on its own. Ideally, you want to go with a broker that has been around long enough to learn from its own processes, that has and continues to modify their operations in a way that caters to the needs of their users. OctaFX is a reliable broker with over 10 years of experience developing the perfect trading tools for ambitious Forex traders. When it comes to innovation, speed, education, and promotional offers, OctaFX is highly recommended.
Gregory Mankiw in his Principles of Economics outlines this one important principle: ‘Trade can make everyone better off.’ Hoping you take a hold of this world of opportunity with Forex trading. Being profitable in the Forex market goes beyond the trading strategy utilized. It is determined by a host of other factors:commitment, consistent practice, patience, understanding risks, becoming savvy, and ultimately confidence in yourself and in your broker. It takes just about the same input and time required to master any other art form. You, too, can join the thousands of people attaining financial freedom through Forex trading. Mastery does look like you!
FOREX, BITCOIN AND BINARY TRADING:
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