How to Make Money in Forex
I understand the reason why people always try to find the way of making some easy money. Basically, we all hope and wish to win as much & as quick as we can.
While thinking about how I was going to start this article, I believe I found an interesting way. I’ve searched all other blogs and forums, and found people who were complaining about losing money on forex trading. Then decided to dig into and find their wrong moves.
I realized, if you stop doing wrong moves there will be no reason to stop you from earning money in forex. And believe me; it is much easier to find the wrong tactics instead of searching for the right ones.
Basically, the point here is; “If you do not lose an important part of your money and always stay in the game, you will have a chance to win. Just don’t lose all of your money.”
So, here we go:
1- After You Start Trading, Decide a Withdrawal Target
If you deposited to your account amount of 1.000$ and start trading, do not expect for millions of dollars profit. Simple facts. Just decide on a target point. Doubling your account in 12 months? Okey. If you doubled the amount after 1 year, then withdraw your initial money. So you will have a chance to trade only with your profit. Oh, did you doubled this amount again? Just withdraw the same amount again.
If you never withdraw your money and wait until your money is finished, you will only have the adrenaline hormone while earning and losing, and that will be the only thing you had.
2- Use Technical and Fundamental Analysis Together
As I wrote many times before, I always prefer using both analysis techniques together. Because focusing on one technique is not giving me confidence. I don’t want to ignore fundamental analysis like monetary policy decisions or important economic data releases while doing technical analysis. So I think you should do the same.
3- Don’t Trust Every Forex Robot
Many of you may think that forex robots always make you money. But I can say it’s not. Except for a few robots, many of them is the waste of time and your money. I wrote an article about forex trading robots before and in addition to that article I can say finding a profitable robot is almost impossible. Because people will not want to sell a robot that already makes money. So think twice before buying a forex trading robot.
4- Stay Away of the Crosses that You Are Not Familiar With
To be able to do successful trades, you must have information about the currencies that in a parity. Thus, you can make the right decisions before executing an order. For example, I recommend you to start trading with parities like EURUSD, GBPUSD or USDJPY because they are the top trading currencies in the world and you can follow last developments about them easier. Don’t trade parities like NOK/SEK, BRL/MXN etc. if you have a lack of information.
5- Don’t Trade Too Much
Be careful about overtrading. By buying more or selling more will not make you rich. Overtrading is a serious problem for some traders and you should avoid from this situation. Less but more confident trades always better than more but unsuccessful trades.
6- Always Use Take Profit and Stop/Loss Orders for Each Trade
After you execute an order you must arrange your take profit and stop/loss orders. Stop/loss level will protect you from losing all of your money. I think using this orders is the very important factor that determinate your trading style.
7- Leverage Usage is Extremely Important. Use it Carefully
Your lot sizes will determinate your risks, yes. But also your leverage ratio can affect that. So, using high leverage can be risky if you are new to forex trading. That’s why you have to pay attention to the leverage ratio before start trading.
8- Do not Try to Buy at the Lowest Point and Sell at the Highest
It is very difficult to do that anyway. If you chase this kind of situations you will probably lose your money. There is no lowest or highest level on forex. Prices can go anywhere depending on the market. So, be careful about that.
9- Get Professional Help
If you are inexperienced, don’t worry. Contact with your broker, get a forex education or do your research on the internet. Test yourself on a demo account without risking your money. After you got some experience you can start trading with real account any time you want.