If your desire is to make money in forex trading without burning your fingers, it is imperative to know the rules of the game. There are two major categories of traders; the gainers and the losers. In order to be among the gainers, you must play the game according to the rules.
One of the secrets of successful traders is their ability to trade without panicking. They approach the market with boldness and most of the times, they win. Your mind set should be prepared for winning and you will discover that you will be winning in many instances.
Then your forecast is next in the order of importance. You must be able to discover the resistance or support level of the currency pair you want to trade. Coming up with the right forecast is an overwhelming task, but if you are well equipped with the right tools, your job would be made easier.
Using technical analysis tools like the candlestick, Fibonacci, Stochastic, moving average, Elliot Wave, etc., will put you in the right position to make a precise forecast. On the other hand, using fundamental analysis to predict market trends require getting the right forex news at the right time. If you miss it at the right time, you miss out.
Predicting market trends the social way is also an avenue of taking advantage of the market. Social traders watch the moves of others, especially top traders, and open trade positions based on these moves. Social trading requires using a solid trading platform that supports it because only few brokers have it incorporated into their platforms.
The way you make use of leverages will also determine how you will reap from the market. Forex brokers give leverages to their clients in order to increase their purchasing power but be careful with the way you use a leverage. If you are yet to fully understand how forex works, don’t go for a high leverage. By doing so, you will reduce your exposure to risk and increase profitability.
Moreover, some currency pairs are more profitable to trade than others. This is determined by the volume of traders following a currency pair and its significance in the world economy. The EUR/USD and USD/JPY are some of the most traded currency pairs in the world. However, trading these currency pairs successfully requires entering the market at the right time and getting the right information that will lead to coming up with the right forecast. If you can successfully do this, you will make a lot of money in forex trading without tears.