Trading: Compared to stock and bond markets, the forex market is the largest in the world by dollar value. It offers tremendous advantages like high available leverage with valuable market actions every trading day. The advantages become more obvious if you utilize a trusted trading platform like MetaTrader 4. Follow these effective tips for Forex trading in MT4.
Tip 1: Focus on Daily Trading Pivot Points
It is very important to pay close attention to daily pivot points especially if you are a day trader. For position traders and wing traders, focusing on daily pivot points also offers a lot of advantages. How is that possible? Pivot trading is similar to a self-fulfilling prophecy. Normally, the market always finds support or resistance or the unpredictable market turns on certain pivot levels because there is a good number of traders that places orders on those levels. Although pivot trading isn’t the sole basis of a good trading strategy, what’s important is to keep a close eye on these indicators because it works great no matter the trading strategy that you have.
Tip 2: Trading With An Edge
You need to risk to make a profit in trading. But the most successful traders only risk their money when a good opportunity presents itself in the market. This good opportunity is something that helps increase the probability of your trade being initiated successfully in the market. You can also increase the number of your technical factors as this will help increase your market edge and the probability of success.
Tip 3: Make Large Profits, Not Large Losses
One thing you should take note of when trading Forex. You must avoid large losses since it is more important than generating large profits. This might be off, especially if you are a novice as you go on with your trades, you will understand that this is just true. A very good Forex trading strategy involves the knowledge of preserving your trading capital.
According to Paul Tudor Jones, owner of Tudor Corporation – “The most important rule of trading is to play great defense.” Why is great defense critical in Forex trading? This is due to the fact that individuals who never succeed in trading run out of money. Therefore, they can’t continue to trade. They just simply blow their account just before having a chance to gain some profit or rule out a profitable trade.
Tip 4: Simplified Technical Analysis
The possible lines of technical analysis are endless. But it doesn’t mean that more is better. A trader who considers the limitless nmber of indicators will only make the waters muddy, intensifying indecision, confusion, and doubt. If this happens, you might miss a good and profitable trade. A simple and relatively concise trading strategy is the only thing you need to produce successful trades.
Tip 5: Placing Stop Loss Order at Realistic Price Levels
Many novice traders mistake risk management as something that they don’t really need or they tend to put the stop-loss order very near the entry point of their trade. Although it’s true that good money management should have stop-loss orders. However, you must also put this risk management tool at a realistic price level when trading in MetaTrader 4.