Eight forex tips to help make your trade profitable
These ideas have been used by me and are good. None of them are mine. I learnt them from others and from studying.
- Trade longer time: This is good for all, especially those who check their charts once in a day like students and those who have full time jobs. All should plan to trade longer term. A trade that is closed in the short term in loss may eventually become a profit if left for longer. This is where good capital and small lot size come to play. This is the opposite of scalping and is referred to as swing trading.
- Bollinger bands: It shows where price have been and where it’s going. It does not work all the time but it works most of the trading times. When price crosses above the upper band you can sell. When price crosses below the lower band you can buy and make your profit.
- Use very wide stop loss: This gives the market the time to walk back to profitability. Small stop losses make you lose money. Stop lot sizes which I discourage can be used with small stop losses.
- Backup trades: When you place a buy and price goes against you. You can place another but lower down as a backup. After a while the second trade cam get to profit which will be more than the loss from the first when both are closed.
- Trade small trade size: this can’t be overstressed. The advantage is that when things go wrong you can always escape with small losses and still keep trading.
- Have small profit targets: the more pips you want the more difficult. Target say 2000 naira per day on a 100, 000naira account. Take it easy and not plan to double your money in a week.
- Keep learning: A lot of articles on forex exist. Lay hands on them and keep learning. Ultimately you will make it. Practice whatever new thing you have learnt using a demo before you go live with real money.
- Not pacing a trade is a trade: It’s not compulsory that you place a trade every time. Not taking a trade position is a position in itself. As I am typing this now, I just ended a series of trades that summed up to negative 62, 000 naira. Even with the close I still have 64, 000 naira profit waiting to be withdrawn. There are times you must exit all trades to refresh. I can’t tell you the time but its left for you. Take a break after a series of profits. Take a break after a series of losses too. For a day, a week or so. Re appraise your strategies from time to time.