Our community blogs
Recent EntriesLatest Entry
As the foreign exchange market is the largest financial market, the value of currencies goes up and down every day in this market. This market is commonly known as the FX or the forex market. Every day, an average volume of 5 trillion dollars is traded in this market, which is more compared to the New York Stock Exchange, where only 55 billion dollar is traded on a daily basis. Also, if you put together all the futures and equity markets, their total volume of trade will be less than that of the foreign exchange market. You will get many advantages if you trade forex. Of course, the size of the market is also an important factor. The number of buyers and sellers is huge, so the transaction prices are kept low here. In order to become a successful trader in this hugely volatile forex market, here are some tips that you may consider before opening your forex trade account.
1) Make a strategy, analyse and keep notes
If you want to be a successful trader, what you have to do is to make a plan first, then follow the market trends and finally, keep notes of your trades. Once your strategy has been planned, always try to stick to it. It will be good for your trading, if you have solid knowledge about the currency pairs, as there are some currency pairs that are not only volatile but also move a lot intra-day. Also, there are other currency pairs that move slow over longer time periods but are steady. Choose a strategy that is perfect according to your trading style.
2) Manage your risk
In order to be a successful trader, you have to be well-disciplined in your strategy, you have to take smart decisions regarding risk management and you need to take the best positions. You have to be very practical about gains and losses and on top of that, never ever let your emotions come in your way. You can set profit targets and loss limits for your positions. You can even use Stop/Loss and Limit Orders so that you can lock them.
3) Select your approach
There are two main approaches, Fundamental Analysis and Technical Analysis, in order to analyse the foreign exchange market. You should know how to use them successfully. This will help you to earn more and more profit.
4) Know what Fundamental Analysis is
If you are a beginner trader, know what a fundamental analysis is. And for this, you need to have an idea of geopolitical events, interest rates, employment and many other things, as these are the factors that affect the foreign exchange market to a great extent.
5) Keep your emotions away
You should always take your trading seriously, as this is your business. It is true that human beings are emotional, but try not to let your emotions come in the way of your trading.
In conclusion, it can be said that there are many risks in the forex market. So you should always keep your eyes and ears open and trade keeping your emotions away. And you will definitely be a successful trader