After trading Forex for 15 years, I have discovered a few truths on how to win consistently. Before reading the further, I need you to understand a few important points.
- There is no holy grail or magic pill strategy. If you think there is, the markets will eat you alive!
- Forget about making 50% - 100% a month. Only poor people think this way!
- A $100 robot that can be bought online can generate 90% winning trades. Run away as far as you can from this robot!
- Today is the last opportunity to make profits from the Forex market.
If you think even 1 of the above 4 is possible, please stop reading here and go back to the Fantasyland that you are living in.
If you agree with the 4 points above, you can continue reading the rest of the article below. You belong to a small percentage of people who knows how to separate reality from dreams and lies.
Today I'm going to share with you a few things to you need to do if you want to be profitable in the Forex market. And if you combine them all together, I can say you will move from the 90% losing traders group to the 10% winners group. However, let me add a disclaimer here. There is no holy grail strategy and success is not guaranteed if you do not put in the effort and sacrifice. Not everyone is going to make money. If it was so easy, I would just sell the information for $1 million!
Chart Patterns
When I talk about chart patterns, its simply looking out for Support & Resistance levels. These are the potential turning points the the market tend to make. These are the price levels that people are going to have a reaction. If you observe the charts, price tend to do 2 things at Support & Resistance. They either bounce back or they break through. However, just by trading at these levels alone is not going to make you profitable. There is much more. You still need to know when to enter. Read on.
Break Outs
In order for the price to go higher, it has to break the previous high levels. For the price to drop lower, the opposite has to happen and it has to break the previous low levels.
High Timeframes
Most traders love trading on the M5 or M15 charts. And they end up losing all their money. Learn from this! Stay away from these small timeframes. H4? How about D1?? For the past 10 years, I have never look for trades below the Daily charts.
Tight Stop Loss
Stop loss is the only thing that protects our trading capital. Without a stop loss, we are basically putting our wallets on the table and then walking away. When you return to the table, the wallet will be gone and so will all your money.
If you can master these 4, you are going to have a better chance compared the the next guy at succeeding. Before I end today's article, I also want to share 1 more last thing and that is to have a bigger Take Profit than Stop Loss. If your Stop Loss is 50 pips, your Take Profit should be at least 50 pips or more. Ideally, you should aim for a Take Profit of 3x your Stop Loss. However, don't be so rigid and refuse to exit from a winning position. Don't ever let a winning position turn into a losing position.
Good luck in your trading and feel free to comment below if you have any questions for me.
Daily Forex is my way of sharing my personal thoughts on the Forex Industry with would-be traders as well as current traders.
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Here are some interesting topics to start you off :
- Daily Forex #20 - Can You Really Make Money Trading Forex?
- Daily Forex #13 - Make Your First $100,000 Trading Forex
- Daily Forex #12 - Forex Is Not a Get-Rich-Quick Scheme
- Daily Forex #9 - 2 Main Reasons Traders Fail
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