14 June, AtoZForex.com, Amsterdam — Aside educating yourself Forex and following webinars. What if we were to tell you that there are some trade secrets you could apply to increase your profitability? Would you follow them? You better do! On daily basis over 200 traders from different backgrounds send various queries for our attention. Most of these queries: “How can I become a profitable Forex trader?”
Although, we have already been working on this, by providing best available research and analysis to our readers on consistent basis, there are a number of points you could apply yourself just to stand out from the 95% loss making traders out there!
You’ll see various advertisements claiming to make you get rich over night by trading Forex, some of these Ads will even “make you millionaire”, well folks NOT! Sorry to disappoint you folks, the reality is that over 95% of the retail Forex traders (folks like you and me) do not make money and they get to be burnt out within three to six months.
Do what the others don’t do!
I can sense your disappointment! Hang on there!
Money can be made in Forex, but you just have to stand out from the crowd! If you wonder how the following 10 profit secrets could be your steps towards success.
1. Less is more
Forget about existence of “holy grail”, don’t waste your money on something that does not exist. In short everything you will do must involve some kind of risk.
The mistake traders often make is overloading themselves with unnecessary information. The truth is less is more! Hence, the more complicated your trading platform is the less likely you will make any money. You will also find out that most of the technical analysis indicators and oscillators are nothing but waste of time and resources.
2. Day trading is no trading, well for most of the time
A funny yet shocking statistics reveals that in general average day traders’ hourly earnings rate is actually much below Mc Donald’s hourly rates.
So, don’t waste your time trying to find the hidden gem in 1 minute or 5 minute charts as majority of the good and consistent profit is made on swing positions following longer term trends. This also means that, you can get your social life and spend some time with your family and not be glued on your 3 screed desktop set-up.
3. Many of the brokers want you over trade
I am sure you have received that call from your personal account manager giving you his “sincere” commentary that the market has moved some 120 pips during the NFP figures and you should jump in the market. He is right, well not quite yet! Your “sincere” account manager is just thinking his own pocket as most of the brokers want you to over-trade.
The logic is rather simple, the more you trade the more your broker makes and often the more likely it is that you will make a mistake and blow your account out.
4. Keep it simple
All you need to become profitable is right there in front of you, as I said earlier you do not need any fancy indicator or oscillator to become profitable.
It is highly advisable to trade daily, weekly and even monthly time frames to analyze the market. In your analysis focus on trend lines, support and resistance levels as well as moving averages as they will give you a hint on market direction.
Indeed the most significant mistake is when people start using those indicators which tell them the market is over-sold or over-bought, which is nothing but a complete set of white lies and total waste of time.
5. News? FX market often calls them “OLDs”
Another major point, novice traders often have trouble understanding is that the news you get to receive is most likely already discounted by the market. This is why there is the famous quote of “Buy the rumors, sell the facts”.
6. Trade with what you see
The truth is that the market does not really care about what you think about the trend or overall the market. So, trade with what you see not what you think or believe.
You may think that the current EURUSD bear rally is over; well perhaps you might be right, but if the price is moving consistently towards parity, then what you think becomes irrelevant. Neither the market care about what that “market expert” in his bowtie talks about on Bloomberg or CNBC. Trend is your best friend!
7. Major pairs don’t necessarily mean majorly profitable pairs
Often easy and easily understandable entries are made on those of minor or exotic pairs. Recently many traders make large amount of profit on Norwegian Crown, Turkish Lira, Swedish Krona and even the Dax index.
8. No trade could be the best position
Often traders get to be addicted to the trade adrenalin and feel like they must place a position. However, sometimes the entry that you do not make could actually become the best position that you could ever make.
9. Exiting is just important as entering a position
Entering an entry is probably the easiest action a trader can take as it can be done in a matter of a mouse click, so could the exiting position. However traders find it more difficult to exit a position, hoping for that miracle to happen, which leaves to our final 10th point.
10. Hoping and Praying = exiting
Closing in the 10 profit secrets, once you see that you are hoping for something to happen or you start praying for the trend to change its direction, this is the time for you to exit the market.