Forex trading is getting popular each passing day and more and more number of people are indulging in forex trading. However what matters is how much one knows about forex trading this is something which is important. Professional forex trading is purely a number game and one needs to have a thorough knowledge about it and only than he/she can book profits. One thing to add on this is that no fund manager can be able to win 100% of the time as forex markets are unpredictable. Though traders try to predict it using a variety of information. Now, this raises a big question in mind is that whether profitable forex trading is possible? Well the answer is certainly not but what can be done is that one may minimise the risks and should not expect a 100% win rate all the time. Let us understand few things about forex trading so that it may help you to become a professional forex trader so as to you can make profits on a regular basis.
Keep your leverage low
Leverage is a powerful tool when it comes to investment. Leverage can multiply gains and at the same time it can also multiply losses and this is why higher the leverage less is the room for mistakes. Thus the amount of leverage sets the position size that you can control your trade. Leverage allows you to create greater returns on your investment.
Put correct stop loss and book profits
Setting correct stop loss is one of the most important things in trading and a professional trader should always set the stop loss very calculative. The decision of where the trade will exit (which can be profit or the loss) should be set on the state of the market and length of the time the trader is prepared to wait to book profits. Setting the right stop loss basically reduces the risk and leads to better outcome of the trade.
Trade higher timeframes
Short term trades are always stressful and this is the reason that a trader should avoid doing it. It is often time consuming as well as less profitable this is why it is always suggested to hold positions for longer duration and indulge in trades as investments.
Look for reasons to avoid trades
All the traders a variety of news and reports each day where charts are screaming buy or sell and it looks everyone is making money which might not be true. Whenever there is idle money laying in the traders account it is more than tempting for them to place orders but one should always exercise caution. One should always remember that brokers and news providers really don’t care whether the market goes up or down as it is not their money.
In addition to this there are many other important points that one should also take care of few more things like
Set realistic goals
Use the appropriate trade based on your account size
Study the market very carefully
There are many other things which one should always look out for other than the above mentioned in order to execute good trade and book profits.