From social trading skills to which Forex platform to join, the internet is full of tips and tricks on how to maximize your Forex gains. Some of it falls flat, of course, while other tips are a great way to get good results. Is the MetaTrader the best platform? Should you register for Forex trading signals? It can be overwhelming. How do you sort the wheat from the chaff? How do you make sure you’re getting good solid advice to build your Forex trading skills? CM trading is here to help you with our handy starter's guide to Forex strategies.
Sometimes it’s difficult to even figure out what you do with Forex, let alone the best ways to do it if you make the mistake of venturing too far into the murky google waters. Forex is the shortened term for the Foreign Exchange marketplace- i.e., where currency trades are done. It’s a massive market that affects almost everything we do that crosses borders somewhere down the line, from manufacturing and selling toilet paper to investment accounts.
It’s an incredibly liquid market, and so large it dwarfs even the stock exchange. It doesn't have a closure period like the stock market does- there’s always someone, somewhere in the world looking for currency exchanges, so it’s active at any time of the day or night. By now, it’s probably becoming very obvious why it’s such an appealing market to investors. While there’s a whole host of different Forex markets and Forex platforms you can join, we’re sure you’ve done a little research already (or are planning to) so let’s move on to the most important part- Forex trading strategies.
At CM trading, we’re always keen to help investors boost their returns. Having a well thought through strategy to your Forex trading is the best way to ensure you see the sort of returns you are interested in. Here are a few steps to do so:
Always have a plan - Poorly thought through investment is the number one reason why people lose their money. Know a few fundamental cornerstones of your trading strategy before you run out and invest. What currency pairs are you most interested in? How long are you planning to hold on average? What basic targets are you going to set? Of course, you need to be flexible- but good strategizing starts with a good plan. Decide which platform you want to use now too. MetaTrader is the globally dominant option, but there are a few more you can check out.
Know your market - Getting some basic Forex knowledge under your belt is critical before you do anything else. Once you start trading, keep a record of what you do- this ability to analyze trends will help stop you making bad mistakes a second time. Now, decide if you want to take a technical (chart-based) analysis method or opt for fundamental (raw data) analysis. They both have pros and cons, though laypeople generally prefer technical as it’s ‘easier’ to manage. However, we strongly suggest social trading strategies like using Forex signalling. Not only does this make it much easier to follow and understand, it also simplifies and takes the stress out of Forex trades.
Manage your risk - There is a host of tools on and Forex platform you use, to help you minimise loss. Stop/Loss and limit orders will do wonders to keep any disasters mitigated. You need to learn to be a disciplined trader too and hold to your plan not make emotional judgments. Don’t overtrade, don’t get emotional about trades and be smart with your limits.
Expand knowledge - Use webinars, seminars, books and resources to your advantage. MetaTrader offers some good resources to start off with.
Be Patient - React in haste, regret at leisure. Keep control of your emotions, and don’t let the waiting game psyche you out. You’re a trader and not a gambler.
While we personally love social trading as a Forex technique, there’s top tips will help you improve any trading style. If you want to start trading commodities now, you can follow the link to get started today!
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HIGH RISK WARNING:
Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.
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