» Make Plans
Choose the currency pairs suitable for you. There are volatile pairs that move several times in just a day. Some pairs are steady which move slowly over a longer period of time.
Then make plans on how long you want to stay in that position, it could be minutes, hours, or even days. Set your targets, like setting when you will cash out, even if you are winning. Remember that you can lose everything in one false move so you have to be careful.
» Follow the Market
You’ll have a lot of resources: forex charts or follow forex news.
» Maintain a Forex Diary
This ensures that you keep track of the strategies that failed and succeeded. This forex diary will pay a huge part in the learning process.
» Manage the Risks
“The most successful traders are those who take the smartest risks. They succeed because they do not let their emotions get the better of them, whether they are winning or losing. They know how to set their target profits and limits for losses for the positions they took” stated by a Forex expert from MTrading.ph - A Forex broker from Malaysia.
» Learn to Limit Orders
Limit orders tell the system to exit a particular position automatically once the target profit is achieved. This will lock you in with your desired profit while on a winning position.
» Know Stop/Loss Orders
Stop/Loss orders tell the system to exit position when the maximum loss limit was hit. It helps you cap your losses on a losing position.
» Be Disciplined
Long time forex traders use both of these orders as the foundation of their trading strategy. By doing so, they are taking away the emotions and just letting the forex market work for them.
» Set a Limit to Your Stop/Loss Orders
Generally, you have to set a limit that is closer to your opening position. The limit you set will be dependent on your risk tolerance but you have to be smart. Setting a stop/loss order that is too close to the opening position price, it can create normal market volatility, thus, causing a temporary dip in your position. Similarly, if your limit order is too far apart from your opening price, your target profit may not be achieved.
Updated on 5. December 2019
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