Secrets of Success on Forex

Marco Green
December 18, 2020

 

 

This year, online trading is all the rage. As millions of people were stuck at home with a lot of time on their hands, the FX community has grown substantially. However, not every trader has the right mindset and skills for success. Here are five tips that will help you achieve great results in the largest financial market.

 

1.   Choose the Right Broker

Would you deposit money in a bank with no licence? The broker will process all payments and store your data, so treat them with the same degree of caution. Choose companies which are officially approved by regulators. Licences from different jurisdictions such as Cyprus (CySEC), United Kingdom (FCA), or South Africa (FSCA) are evidence of compliance with the industry norms.

2.   Research Your Instruments

Any currency pair can bring profit if you know giao dịch forex, and what drivers to look out for. Many traders choose EUR/USD as the most liquid combination. Majors and minors indeed are the easiest to trade, as there is always a match for an order. On the other hand, exotics are also lucrative if you know enough about the economies they represent. For example, a trader in South Africa may reap a big profit from buying or selling USD/ZAR.

3.   Hone Your Foresight

Learn as much as possible about technical and fundamental analysis. It is possible to use either system or combine them. Each method has its peculiarities. For example, technical analysts should always look for confluence — groups of two or more indicators pointing in the same direction.

One should not trade based on volume alone. This is an insufficient basis for decisions. At the very least, you should add a price-based indicator. Explore all the visual aids in the demo mode before live trading.

4.   Calibrate Your Risks

Supply and demand, two fundamental forces, are beyond any trader's control. Neither can anyone affect interest rates, geopolitical negotiations, or oil prices. These threats are inevitable.

That is, prepare and protect what you have before opening any new positions. Risk management in Forex includes several elements. First, it is the stop loss feature of the software, which limits potential damage.

Secondly, this is portfolio diversification. The more different instruments you trade across unrelated markets — the lower your potential losses. This is because failures in one domain are compensated by gains elsewhere.

 

5.   Never Stop Learning

Traders never stop learning. The currency exchange is always changing, and you cannot achieve consistent results if all you know is a single strategy. Explore the great variety of systems, techniques, technical indicators, etc. There is always something new to learn.

The Bottom Line

Keep an open mind — it is essential for success. Take only calculated risks, and work through a reputable broker. Forex is neither a scam nor a get-rich-quick system. It is a field where knowledge is monetised. Your decisions must be grounded in solid analysis, not emotional impulses.

 

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