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Day Trading Forex and the Top 10 Forex Beginners Trading Tips
The standard use of the term "Day Trading" refers to short term market positions where the trader opens and closes a position within the same day. Rather unfortunately, this term along with the original concept received bad press in the 1990's when it earned the reputation of liquidating many beginners Trading accounts. However, the fact remains that no one whether beginner or seasoned trader, should simply jump into the markets without thoroughly testing their system, methodology, plan and so on. Therefore it cannot be overstated enough not to engage in online trading platforms without applying tried and tested trading strategies. The naïve and simplistic basic idea of immediately "going to work on the markets" and "making a mint in trades" is a nice thought but without the proper experience, knowledge and trading plan will in many cases prove to be catastrophic.
However, its not beyond the scope of reasonable thinking to realise that Day Trading need not be a complicated task once a well practised and simple rule-based strategy for anticipating market moves has been established and time proven.
10 Top Forex Trading Tips for beginner Day Traders:
1) Research and seek scenarios where supply and demand are drastically imbalanced. The edge: use as entry points.
Forex Markets are similar to other buying and selling opportunities in life. When any supply approaches exhaustion and there are still willing buyers, the probability exists that price could in fact continue and go higher. Conversely, when excess supply approaches and there are no willing buyers, the probability exists that price will go down. Therefore, early pattern recognition or EPR is necessary to give the edge and identify any of the previously mentioned set ups or potential turning points on a price chart. Research and studying historical charts will sharpen the senses and raise the awareness in real time chart analysis.
2) Set price targets in advance of taking the trade.
When buying or taking a long position, make a decision upon an acceptable level of profit in advance. Always place a stop loss (SL) to limit losses if the trade reverses against a position. Always stay with the pre-set plan. This limits any potential loss while simultaneously preventing any over eagerness of being greedy in the event of market price spikes to an unsustainable level. Naturally, a caveat can be written in the trade plan that if a strong market is apparent, then create a new profit goal and stop-loss level but only once initial targets are obtained.
3) 3:1 Minimal Targeted Risk Reward Ratio.
Another important lesson in Forex is to properly understand the 3 R's, this does not mean Reading Riting and Rithmatic, no, it means "Risk Reward Ratio". Worth noting that a "lose small win big" Policy should be adopted and practised. The idea behind this policy is that any Trading loses are over written many times with profitable trades. It is therefore absolutely necessary to gain valuable experience in Risk Reward Ratios, achieving in some cases up to and greater than 5:1
4) Having a little Patience can go a long way towards successful Trading.
So the paradox of successful Day Trading is patience because for many reasons but more over market conditions, will not allow a strategy to be traded successfully every day. Day Traders follow the markets during the session but if the correct conditions for the trading plan are not totally fulfilled then no trade executions will take place in the nominated trading session. It is therefore reasonably practicable not to Trade against personal trade parameters, methodology through over eagerness to simply be in the Market for the sake of it. In essence, just practise to adhering to the pre determined Plan.
To Learn more about Forex and find the Top 10 Trading Tips click here
Best Regards,
Sir Gissachance (PPND)
The standard use of the term "Day Trading" refers to short term market positions where the trader opens and closes a position within the same day. Rather unfortunately, this term along with the original concept received bad press in the 1990's when it earned the reputation of liquidating many beginners Trading accounts. However, the fact remains that no one whether beginner or seasoned trader, should simply jump into the markets without thoroughly testing their system, methodology, plan and so on. Therefore it cannot be overstated enough not to engage in online trading platforms without applying tried and tested trading strategies. The naïve and simplistic basic idea of immediately "going to work on the markets" and "making a mint in trades" is a nice thought but without the proper experience, knowledge and trading plan will in many cases prove to be catastrophic.
However, its not beyond the scope of reasonable thinking to realise that Day Trading need not be a complicated task once a well practised and simple rule-based strategy for anticipating market moves has been established and time proven.
10 Top Forex Trading Tips for beginner Day Traders:
1) Research and seek scenarios where supply and demand are drastically imbalanced. The edge: use as entry points.
Forex Markets are similar to other buying and selling opportunities in life. When any supply approaches exhaustion and there are still willing buyers, the probability exists that price could in fact continue and go higher. Conversely, when excess supply approaches and there are no willing buyers, the probability exists that price will go down. Therefore, early pattern recognition or EPR is necessary to give the edge and identify any of the previously mentioned set ups or potential turning points on a price chart. Research and studying historical charts will sharpen the senses and raise the awareness in real time chart analysis.
2) Set price targets in advance of taking the trade.
When buying or taking a long position, make a decision upon an acceptable level of profit in advance. Always place a stop loss (SL) to limit losses if the trade reverses against a position. Always stay with the pre-set plan. This limits any potential loss while simultaneously preventing any over eagerness of being greedy in the event of market price spikes to an unsustainable level. Naturally, a caveat can be written in the trade plan that if a strong market is apparent, then create a new profit goal and stop-loss level but only once initial targets are obtained.
3) 3:1 Minimal Targeted Risk Reward Ratio.
Another important lesson in Forex is to properly understand the 3 R's, this does not mean Reading Riting and Rithmatic, no, it means "Risk Reward Ratio". Worth noting that a "lose small win big" Policy should be adopted and practised. The idea behind this policy is that any Trading loses are over written many times with profitable trades. It is therefore absolutely necessary to gain valuable experience in Risk Reward Ratios, achieving in some cases up to and greater than 5:1
4) Having a little Patience can go a long way towards successful Trading.
So the paradox of successful Day Trading is patience because for many reasons but more over market conditions, will not allow a strategy to be traded successfully every day. Day Traders follow the markets during the session but if the correct conditions for the trading plan are not totally fulfilled then no trade executions will take place in the nominated trading session. It is therefore reasonably practicable not to Trade against personal trade parameters, methodology through over eagerness to simply be in the Market for the sake of it. In essence, just practise to adhering to the pre determined Plan.
To Learn more about Forex and find the Top 10 Trading Tips click here
Best Regards,
Sir Gissachance (PPND)