A well-placed global financial leader, Australia has one of the most sorted economic sectors in the growth around the world. Most Aussies are well-versed and fond of the famous currency market and trade forex.
Foreign exchange trading is genuinely effortless. But, doing it well and achieving consistent profits is the tricky part.
So, if you are one of the new ones planning to dip your toes in the forex market, you must know how to master its complexities. After all, it’s one of the larger trading markets, and there is hardly a day when something exciting does not happen there.
Let’s help you grasp the pulse of this last great investing frontier and bring you closer to your fortune!
Keep a close eye on the everyday pivot points
If you plan to become a day trader, or better yet, a swing trader or a position trader, it’s essential to pay attention to pivot points. Why? The entire community of traders always look out for the pivot levels.
Pivot trading is a self-fulfilling prophecy. On pivot levels, markets often either receive support or sustain resistance or simply turn around since the traders mostly place orders at these levels.
Hence, if a big trading move is happening at a pivot level, it’s solely because many traders have placed orders upon such a move. So, regardless of your trading strategy, check for the daily pivot point’s indications and trending activity.
Keep an edge
If you take note of the most successful traders around the world, you will see how they all believe in taking risks and grabbing the edge the market presents to them. This significantly improves the probability of the trade doing well.
Several things can transform into your edge. For example, it could be as plain sailing as purchasing at a price level or selling at a price level since you’ve noticed specific support or strong resistance in the market, respectively.
You can hone your edge by ensuring that most numbers of technical factors play in your favour. This will enhance your chance of attaining success.
Safeguard your capital
The first and foremost rule of delving the trade forex – minimize your losses as much as possible. More than your profits, it’s crucial to prevent your losses. Winning big in the forex market requires patience and, most of all, a strategy to preserve your capital.
Play great defence. As long as you have got capital in your hands, you continue to be in the game. The minute your account is drained, so is your chance to enter any profitable trade.
Practice stringent risk management rules. The longer you stall your losses, the better your chances of making a ‘home run’ trade!
Simple techniques
The forex market is riddled with endless indicators, and you can only keep track of so many. The more complicated your trading strategy is, the more doubt, confusion and indecision it will induce.
So, start with only a few basic rules, and consider minimum indicators in your decision-making. This simple market analysis will help you achieve better trade results.
Wrapping up
52% of trades in the forex market use the Australia Dollar – clearly indicating the popularity of foreign exchange trading in the country. However, another statistic shows that only 15% of traders worldwide earn profits.
The only way to become a part of the 15% profitable traders is through proper study of the market, practice, time and patience. Additionally, keep the four essential tips in mind as well:
- Pay close attention to daily pivot levels
- Have an edge during your trading
- Protect your trading capital
- Use simple trading techniques and market analysis
- These tips will ensure you have a solid start in your foreign exchange trading journey!
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