Many novice Forex traders are captivated by the attraction of Easy Money. Forex sites display the quality of “risk-free”, “high yield” and “small investment” trades. These claims have only a grain of truth, but the fact of Forex is inherently more complex.
Rolling novice errors
There are two common mistakes committed by many novice traders – HB Swiss Binary Trading without a clear strategy and letting emotions dominate their decisions. After opening a Forex account it may be tempting to sink directly and start trading. When you look at EURUSD movements, for example, you may feel that you are about to leave an opportunity lost in your hands if you do not enter the market immediately. You buy and monitor market movements that are contrary to your expectations. You panic and only sell to see the market recover later.
This uncontrolled approach to the FX market will ensure that your money is useless. Forex traders need to have a reasonable trading strategy and not allow emotions to control their trading decisions.
Understand market movements
In order to make prudent trading decisions, a Forex trader must have a good education on market movements. Where he should be able to apply technical studies on the graphs and identify entry and exit points. He should also take advantage of different types of trading orders to reduce risk and maximize profits.
The first step to becoming a successful Forex trader is to understand what the market is and the force that drives it. Who is Forex trading and why? Who succeeds in it and why it succeeds? This knowledge will allow you to identify successful forex trading strategies as well as use them as your own models.
There are five major groups of investors involved in the Forex market – governments, banks, companies, investment funds and traders. Each group has different goals, but the only thing that brings together all these groups except the traders is external control. Each organization has its rules and guidelines in currency trading and can hold questions about their trading decisions. Individual traders, on the other hand, are responsible only for themselves.
Big companies and educated traders approach the Forex market with clear strategies and if you hope to succeed as a Forex trader you have to play with the same rules.
Capital management is an integral part of any HB Swiss Binary Trading Strategy. Besides knowing which currencies to trade and identifying entry and exit points, a successful trader must also manage his / her sources and incorporate the capital management rules into his / her trading plan.
There are various strategies to approach the rules of capital management. Most of these theories depend on the calculation of the basic stock. The primary stock is your opening balance minus the funds used in open orders.
Basic stocks and limited risks
When you open a trading center try to reduce the risk to be 1 to 3% per trade. This means that if you are trading a Standard Forex Lot at $ 100,000, you should reduce the risk of your loss to be within the range of one thousand and three thousand dollars, preferring to be $ 1,000. You can do this by placing a stop loss order at 100 pips (where the value of the $ 10 point) is above or below the entry point.
Depending on the rise or fall of your underlying stock you can adjust the dollar value of the risk. If your opening balance is $ 10,000 and you open Tadawul with your primary account balance of $ 9000, if you wish to open a second trading center, your primary share will drop to $ 8000 and then the risk should be reduced to $ 900. Reducing it to $ 800. Larger profits mean greater risk
You should raise your risk level as your underlying stock rises. If you are trading successfully and earning $ 5,000, then your initial share will be $ 15,000. You can raise your risk to $ 1,500 per transaction. Alternatively, you can risk your profits more than your opening account balance. Some traders may raise their risk level to 5% against their earning level ($ 5,000 per lot) for the purpose of maximizing profit potential.
These are the types of strategic tactics that allow a beginner to find a foothold in the lucrative Forex trading world.