Foreign Exchange Trading System

3 Tips Every Trader Should Live By

Did you know every day in the Forex currency exchange, that $1.8 trillion USD will exchange hands? This numbers so huge I could barely read my head around it the first time I heard it.

What if, by using three small trading tips we could increase our chances of getting our hands on even the smallest, miniscule percentage of that $1.8 trillion? I think most people could live with that, and even consider that a lavish lifestyle.

1. Learn to play stop and limit orders effectively: placing the fact of stop-orders is beneficial to a trader because it limits losses and it takes advantage of the potential for an upside breakout.

But placing limit orders it allows traders create new positions or get out of a current position at the selected limit or better price. With a limit sell order, a currency trader can place a limit sell order at above the current market price to make profits.

With a limit by order, a currency trader can place a limit by order at below the current market price, in order to buy below the current market norm.

2. Learn to use leverage correctly: what makes the foreign exchange market different than other stock markets is the ability to use leverage. Leverage in the Forex market, is the ability to control more currency pairs than the trader has deposited in to his or her trading account.

For example, if an investor wanted to control $10,000 USD/JPY, the investor would only have to have the margin requirement of the total transaction value. For instance if the margin requirement is 1% of the transaction value than the trader is expected to have $100 in his or her account.

This can be advantageous to the investor because they can control more investment than what is in his or her actual account. By using leverage correctly that investor has the potential to increase their return on investment (ROI).

3. Control the frequency of your trades: a real killer to the newbie currency exchange investor is the number of risky trades. A lot of beginner traders become excited and impatient and make way too many low probability trades.

Forex trading is about evaluating probabilities in the rise and fall of currencies. Therefore, by limiting the frequency of your trades choosing good if quality trades you will reduce your failing trades

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