A Beneficial Forex Tactic
It isn't easy to make money in the forex market. Though, given a bit of education and information of the market, it can turn out to be quite simple to make money in the forex market. Most traders end up learning that it’s the simply systems that make the fortune. Over analysis and over thoughts can sometimes influence your trading methods and strategy.
The trading technique I will clarify now is possibly going to disturb you a little and will most likely go against everything you have ever been taught about forex. But, you have to keep in mind that this is my individual plan and its how I make money. It may not work for the other person, but it has shown me a way to make a considerable amount of money in the forex market.
In the course of your forex training you might have heard traders tell you to always trade with a stop-loss. If you don’t know what a stop-loss is, it’s simply an order telling the broker when you would like to cut your losses. I don’t trade with a stop-loss period. How can I make money without using a stop-loss? I have a tendency to think that the big players in the forex market like to drive this market in certain directions to take out other traders stop-loss positions. In order for the banks to make money, they have to take other traders duty, therefore taking out stop-loss orders in the market. I don’t allow the banks to do this to me individually.
Next, on each trade give the impression of being to make only a few pips. In some cases this is known as scalping the market.
Your next query might be, “how will I know when to enter and exit the market?” I use a group of indicators mix with a detailed analysis of trend lines and channels. If I have a good idea of where the market is heading over the course of a few years , I will have a good idea if I am in buy mode or sell mode on a daily basis.
How can you survive without using a stop-loss? Just put, do not risk large amounts on each trade. I only risk one tenth of my account balance per trade. For instance, I only trade $1 lots on a $10,000 account. What this enables me to do is use no stop-loss. If the market moves 200 points no problem. By the time the market moves 200 points, I’ve by now made 100 other trades in profit all for 3 to 6 pips each. If the market goes on to get away from me, I keep on trading each day gaining which finally compensates for the few losers and finally overrides them. When the market comes back in my side, those losing trades are making profit every step of the way.
