Trading in the foreign exchange markets isn’t an easy thing to do by default. In fact, many traders find it difficult to break through and see the profits they demand from their trading. For good reason, those that do trade forex tend to be in search of techniques that will improve their effectiveness. Whether this is through better research, analysis and preparation, or through better technique and trading strategy, there are certain trading behaviours that can help improve your fortunes in the market and make you a better trader. But without the right guidance, it can be difficult for any trader to achieve the level of knowledge and ability they require to make major progress.
That’s why we’ve put together just 3 top foreign exchange techniques you can use to get better results from your forex trading. These are tried and tested across years of consistent trading activity, and as such are the closest you’ll ever get to a guarantee in this business. With the right execution of these techniques, it is possible to ensure you generate better results from the forex positions you trade.
Don’t Let Losses Out The Bag In Foreign Exchange
Losses can pop up from anywhere in foreign exchange markets, and there is no guarantee as to when and how severe these losses will present. You cannot let these losses get out of control, let alone gain momentum, if you want to protect your capital. This can be more difficult in practice than in theory – often, the positions you have spent hours researching can turn out to be duds, making it more psychologically difficult to cut these positions when they start making a loss. But you need to be ruthless if you want to protect your capital, as most traders do. Only by being completely ruthless with avoiding and cutting loss making positions can you stand the best chance of trading profitably on aggregate.
Run Profits In Foreign Exchange Trades
By the same token it is essential that you allow profitable foreign exchange positions to mature. The psychology of the average trader is to bag profits when they are there, while allowing loss making positions a chance to recover. This is counterintuitive in reality, and while many feel instinctively comfortable with this approach, it is a sure recipe to driving an aggregate loss. Instead, profits have to be squeezed as far as the possibly can be, while losses need to be kept under check if you want to achieve any serious degree of success. Run on profits so you can offset the losses that you incur along the way, and so you stand the most realistic chance of turning a profit from your trading.
Time Your Trades According To Foreign Exchange Liquidity
Liquidity in the forex markets moves and changes all the time, and only those that can pick the best times for their trading can be expected to see results of any significance. Liquidity is essential for the quick execution of your positions, and for a stable trading environment. Yet, particularly for Aussie traders, time zone differences can make it more challenging to invest in certain currency pairs. Nevertheless timing is an essential issue for traders to be mindful of, in order to deliver the best ongoing results.
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