Simple Forex Trading Tips to Improve your Trades
Trade Forex Zen
14 October, 2014
When trading forex it is important to keep everything simple, straightforward and easy to understand. There’s no point in complicating matters; the market is a huge, bewildering place that needs the simplest approach in order to be tackled successfully.
Follow the below tips to facilitate your trades and improve your return on investment:
Conduct Technical Analysis
Technical analysis involves analysing price charts. During technical analysis you should look for previous buying and selling zones that other traders have recently used to enter or exit the market (also known as support and resistance levels).
Performing technical analysis will give you the best possible market entry point. This will ensure limited drawdown and maximum profits.
Don’t Ignore Fundamental Analysis
Some traders are 100% devoted to technical analysis but by ignoring fundamental analysis you eliminate an understanding of market sentiment. Market sentiment is a fantastic way to tune in to the market and understand exactly why a currency’s value is moving in a particular direction. It is the reason why the current market is moving in the direction and can have a huge impact on the profitability of short-term trades.
Once you have performed your technical analysis and have established a trading strategy based on the current market sentiment, it’s time to place your trades. From here, you should monitor the various technical levels for possible entry points.
Always manage your trades based on your pre-determined trading strategy. This helps to keep everything controlled and manageable, which eliminates the chances of trading on a whim.
It’s essential to have a well-defined trading strategy that outlines exactly when you intend to exit a trade. Otherwise, you run the risk of keeping the trade open for too long or even exiting too soon and not reaching your maximum profit potential.
Never Stop Learning
No matter how long you have been trading forex for you should always stay open to learning. Nourish your knowledge of the market on a daily basis and practice new trading strategies on a demo trading account.
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