The right strategies can transform your trading potential!
Choose your preferred currencies
Choose the currency pairs that you want to trade, based on your appetite for risk and expected market conditions. Some currency pairs are inherently unstable and will constantly change in value – sometimes by a considerable amount. Some are more stable and produce smaller profits.
Decide on your timeline for each trade
It’s important to be clear about how long you intend to allow each trade to run. Timelines might be minutes, hours, or even days. Some open positions may incur rollover charges. You can use stop loss and take profit tools to manage trades.
Be clear about your financial targets
Decide in advance how much profit you want to make before you exit a position, and how much loss you are prepared to accept before you give up on a trade. This is particularly important if the markets are volatile.
Use Technical and Fundamental analysis
Make full use of charts and news updates to be aware of any factors that can affect your open positions.
Your broker should provide a selection of live charts showing asset performance. It may also be worth paying for additional charts. Effective technical analysis is vital to profitable trading.
Your broker will almost certainly provide a full economic calendar which lists and explains upcoming economic events. Use these to plan your trading and aim to benefit from significant market events.
Analyse your Own Trading
Consider choosing a trading platform that allows you to review and analyse all your previous trades. You can evaluate how effective your strategies really are, and whether you are improving as a trader. You will probably see clear patterns in your own behaviour and can seek to maximise personal strengths and correct weaknesses. Use our simple checklist to evaluate your own performance and find improvements:
EUR/USD (The value of 1 EUR expressed in US dollars)
USD/CHF (The value of 1 USD expressed in Swiss francs)
Practice Risk Management
Disciplined trading begins with systematic use of Stop Loss and Take Profit tools. Decide in advance how much you expect to gain and how much you can afford to lose on each trade. Set the automated tools and remove emotion from the trading process.
This simple tool automatically exits an open position when you have received your desired level of profit. Your profits will be ‘locked in’ even if the asset later falls in value.
The stop loss tool will automatically exit a losing position when a predetermined level of loss is reached. Although you’ll have lost some of your trading funds, the loss will be within acceptable boundaries. Inevitably, some of your trades will fail. Accepting loss is part of being a trader, but wise traders limit their losses.