You might be thinking there is no stopping in your marathon since you know about the Forex market. Many people started to trade the market with a great level of enthusiasm but soon they become frustrated after losing some trades. In fact, the majority of the new traders blows their trading account without knowing the risk factors of this market. If you do some extensive research you will be surprised to see only 5% of the traders are able to lead a luxurious life based on trading profession. Why is the success rate so low in this profession? You don’t need to learn rocket science to find this answer. Majority of the traders are losing money since they don’t know the proper way of trading. They are simply trading the market with random risk exposure and blowing up their accounts. But today we will share three major technique which will help you to become a successful trader.
Identify the key swings of the market
First of all, you need to identify the prevailing trend. There is saying in Forex market, “Trend is your friend”. So if truly believe trading is the right profession for you, you must focus on the long-term trend. Swing trading system is one of the easiest ways to secure the best trades in favor of the trend. But in order to master this skills, you need to demo trade the market in the higher time frame. The higher time frame trading system is often considered as conservative trading style. You will have to wait for a long period of time, to find the trades. Always remember patience has its own reward. You can really make any progress unless you follow the conservative trading system.
Trading with high-risk reward ratio
Risk reward ratio is one of the key ingredients which has the potential to save your online trading account. Those who are trading with negative risk-reward ratio can never become a successful trader in the industry. In the eyes of some trained professionals, the risk-reward ratio is often considered as the most important element in the retail trading business. Those who are new might not understand why we are giving so much importance to this sections. But there is nothing to worry! We will make it clear to you. Let’s say you are risking $10 to make a profit of $10.So it’s very obvious you have no edge over the market. But if you risk $10 to win $30, you are trading this market is 1:3 risk reward ratio. So a single winner can cover 3 losing trades. If you can develop a trading system with high-risk reward ratio, you can easily make money with a 50% win rate.
Trading the high impact news
News trading is extremely profitable but it’s only for the experienced trader. Many professionals only trade the market prior to the high impact news release. But in order to become a news trader, you must learn the details of this market. First of all, try to learn fundamental analysis. Fundamental analysis is nothing but the study of the economic performance of a certain country or an asset. If you can do the proper fundamental analysis, you will see your decision is going in favor of the technical analysis. But if find a contradiction with your fundamental analysis data with the technical data, something is wrong. You need to ignore the trade setup and wait for the next possible signal. As a news trader, you must master the art of multiple time frame analysis since it will help you to filter the false trade setup. Use your price action trading knowledge to filter out the key reversal point of the market. But when you trade the lower time frame, you must reduce the risk exposure to a great extent. Your first priority should on the safety of your investment.