Tip 1 for forex traders– use mini-lot
The idea of mini-lot does not make forex trading any less interesting, it’s just effective for forex traders to manage their risks without being pushed to any unwanted situations.
Tip 2 for forex traders– Use low leverage
Leverage is exiting for forex traders that they can use up to 1:500 for forex trading. However, a use of high leverage can wipe out accounts in a slit second.
Tip 3 for forex traders– Use stop-loss orders
The stop-loss does what it says can do for forex traders. It stops loss if you have set it up for your orders. However, the stop-loss does more than that. The stop-loss can be used as a strategy for channel break. If the price breakout either line of the channel, the stop-loss can automatically capture the opportunity.
Tip 4 for forex traders–Risk 1 percent of your account for each trade
Forex traders may get lucky and get whole lot of profits, but they have bad days too. Risk 1 percent of your account for forex trade ensures your standing in the market even after a streak of bad trades. That’s not unheard of from even top traders.
Tip 5 for forex traders– Use multi timeframe
Always use the multi timeframe for forex trading. The longer timeframe can help find the big picture. For example, you can detect whether the trend is indeed developing over the days. A shorter timeframe does something else; it helps pinpoint the entry and exit levels.
Tip 6 for forex traders– Learn Fibonacci numbers
Every forex trader use Fibonacci numbers in their trading life. In fact, that makes Fibonacci numbers a self-prophecy for forex traders. The more forex traders believe in the theory, the more price patterns can be attributed to Fibonacci numbers. If everyone else is using Fibonacci, you better catch up.
Tip 7 for forex traders – Overlapping support levels is a confirmation
A support level is much more likely to hold when it overlaps or nearly overlaps other support levels. Draw a variety of support and resistance lines to see these overlapping levels. Use Fibonacci, trend lines and prior swing peaks and valleys, for starters.
Tip 8 for forex traders– Trend is your friend
From my year’s trading experience, trend is forex trader’s true friend. Many people believe following the trend is rather dull. And they want to do something differently. But trust me, following the trend is always the best way to maintain your head clear and make profits.