Forex hopefuls who’ve embarked on reputable Forex trading courses will have understood some important concepts from day one: never trade on hunches and intuition alone and always employ sound Forex trading strategies.
Here are seven overarching tips that apply to all trading:
1. Never neglect economic fundamentals
Technical analysis is vital, but you should never forget that economic events drive the general direction of money markets. This means taking fundamental analysis into account, too, when you develop your trading strategies.
2. Study successful traders
They’ve stayed in the currency trading game because they’ve been successful. Study their trading strategies carefully. You can test them and modify them according to your trading needs and style.
3. Filter your input
Don’t be too swayed by stuff that you’ve gleaned from dubious sources on the Internet. Investigate the source of the information that you’re receiving. If it’s trustworthy, use it. If it isn’t, forget it.
4. Don’t slavishly follow advice
When you’re implementing Forex trading strategies, it’s good practice to begin with advice from experienced traders and analysts. But before you use it “live,” test it through a demo account first, then modify your strategies and watch the effects before any real-time trading.
5. Keep an eye on the long term
Many traders make money on short-term market fluctuations, but don’t be misled: the successful ones have a good sense of where the market’s heading because they never neglect the signals emerging in longer time frames – the real indicators of market movement. Short-term signals alone will never give you a good overall picture.
6. Vary your time frames
Don’t stick to the same time frame when you’re devising your strategy. Take daily and weekly data into account, even when you’re interested in hourly trading.
7. Always set stops
No one can watch the currency markets continually for 24 hours at a time. When you have open positions, stops help you sell the currency when it hits a specific price value without having to keep your eyes on it, protecting your profits and shielding you from painful losses.