Forex Trading Tips
Whether you’re a newcomer to the existing world of Forex trading or a professional with years of experience in the field, there are some points worth taking into account both before and during your trading;
You’d be amazed at the number of people who jump into Forex trading without doing any form of research beforehand. It’s all very well to place money on a trade because you have a hunch that a particular currency will rise or fall in value relative to another currency. However, in order to move from hesitant bets to self-assured trading, one needs to do research.
What political or economic events are due to take place which have the potential to affect the currencies in question? What has been the previous trend or general movement of the currency pair been like, both on a short-term and long-term basis? Are there certain times of the day, week or month when your chosen currency pair tends to be more volatile – and will you, for example, be awake or available at that time to capitalise on that potential volatility?
You don’t have to take these things into account when you trade – you can make money without them or lose money even if you do considerable research around your currency pair beforehand. However, knowing more about your product and about Forex in general can help you avoid making trading mistakes which might have been avoided had you been in the possession of certain readily available information relating to the product in question.
One of the consequences of FX’s nature as a global trading system is that it can be extremely volatile, reacting to a constant stream of events. As a result, sometimes a strong position in the currency markets can quickly change to a weak one and vice versa. You need to make sure that you are in a position to take advantage of currencies moving your way in open positions as well as being able to close a trade quickly if the markets start rapidly moving in the other direction to your trade. In short – you want to prevent yourself from being caught out by sudden shifts in the currency markets.
There are several ways to go about doing this. The first is to maintain a constant watch on your open positions. ETX Capital’s platforms are available on iPhone, iPad and Android devices, giving you the ability to keep track of your positions while you travel as well as when you’re at your desk.
Alternatively, with ETX platforms you have the ability to place stops on open positions, which will close your trade if the option in question reaches a certain level that has been pre-defined by you. You can also set open orders which will allow you to open a position if a particular option hits a level pre-selected by you.
Unfortunately it is all too easy to let emotions – whether influenced by the markets or an outside source – affect your trading. If you feel that your financial judgement may be affected by how you’re currently feeling, it may be wise to take some time away from the markets, returning when you feel that you’re back at your trading best.