Have you incurred a ton of losses recently which makes you think that forex trading just isn’t for you? Before you wave the white flag, it’s best to get back to the basics and figure out what you can do to increase your bottom line.
You shouldn’t forget that making money in forex is pretty much the same as generating income from any kind of business. To get bigger profits, you need to either increase revenue or decrease expenses. And in the world of forex trading, the latter proves much easier to achieve.
These tips should come in handy as you try to make more successful trades in the future.
1. Make fewer trades
Many people tend to make a ton of trades each month. A winning trade makes you want to trade more, but a losing trade might also compel you to trade more in an attempt to recoup your money. But taking too many trades increases the risk of losing money substantially. While it may sound absurd, one good setup can be all you need to make good money each month. For instance, you can create a setup in which a single trade nets you a certain amount of profit. If you consider that your bare minimum before opening a position, you’ll be making fewer trades but generating more profits.
2. Stop trying to master all trading strategies at the same time
There’s a myriad of forex trading strategies out there, each of which proves useful when leveraged properly. But no matter how tempting it could be to become an expert on all of these techniques, you may want to consider taking a step back and learning one strategy at a time. This applies to people who use automated software.
It’s a good idea to use a trading robot that comes with a manual trading feature such as QProfit System. Through this, you can make manual trades to test your strategy before letting the software do the work for you.
3. Stick to the daily time frame
How many times have you heard people say you should use the 5-minute chart? The sheer number of people who use this approach might make you think it’s the best strategy. However, using the daily time frame can be more useful as it means fewer quality trading opportunities, thus forcing you to place fewer trades.
Another benefit is that it gives you enough time to think and make educated predictions. Analyzing a daily candle is also more useful for technical analysis because of greater liquidity.
4. Factor in Outside Forces
Multiple outside factors can influence how participants perceive the market. Even if you don’t believe in these factors, you should still consider them as they play a major role in making good trades. You can do all the technical analysis you want, but a strong external factor can change everything. This doesn’t mean you should trade the news. Just make sure you’re aware of what’s coming out and how it impacts the forex market.
These four tips might not be what you often hear or read from other forex traders. But if you keep doing what the majority does, how can you expect yourself to be part of the small group of people who find immense success in forex trading? It’s on you whether or not to do the things other people wouldn’t even consider doing.