The forex tips below are all easy to do and all will help you achieve one aim increasing your overall profitability. So here are 5 forex tips for greater profits.
1. Use the Weekly Chart
I am amazed that most traders never bother looking at weekly charts but if you want to separate out “the wood from the trees” the weekly chart gives you a much clearer perspective.
The big trends are clearly visible on the weekly chart and if you are long term trend follower, start with this chart first and you will have a clearer view of support and resistance levels and entry points.
2. Cut Your Trading Frequency
This Forex tip addresses a major problem that most novice traders have – they trade too much.
They think they have to be in the market all the time and chase profits but the fact is, if you cut your trading frequency, you stand a better chance of success. Keep in mind; you only get paid for being right in forex trading - NOT for your effort and how often you trade!
By cutting your trading back, you can concentrate only on the high reward, high odds trades which give the best potential profits.I know traders who only trade a few times a year yet - they make between 120 – 430%! Annually.
Their simply trading the cream of the trades and ignoring the low odds, high risk ones and there are plenty of those.
If you cut your trading, you will probably see your profits soar.
3. Risk More Per Trade
This is directly related to the above point.
If you have a high odds trade take this tip and risk more.
You will read a lot of nonsense on the net about risking 2% per trade and no more.
Well, that’s fine if you are trading 100k but if you’re a small potato trader, trading 10k or less, that’s a maximum of $200!
If you have a small account you need to load up and risk 10 -20% on the high odds trades. Keep in mind if you don’t risk much you won’t make much!
To make meaningful gains you have to take risks – if you don’t like taking risks don’t trade forex.
4. Don’t Diversify
If you are trading a small account don’t diversify!
You need to load up as we have said above and concentrate on one trade only.
Diversification is simply another word for diluting profit potential and is something a small trader should not engage in.
5. Use an Account Profit Target
What s a realistic target to make per annum in forex trading?
You may have your own ideas - but if you made 100% that puts you up there with the best fund managers in the world.
You will often see people look at risk per trade but looking at your account overall and using a profit target is highly effective.
You will often see trades that give you big profits in short periods of time and if they are a substantial – i.e. more than 25% of your 100% bank them.
Have a break and start again.
If you hit your profit target for the year early - decide whether you should trade again at all or at the very least give yourself a deserved break.
The tips above are really saying:
Focus only on the best trades with the best odds, load them up and have a target -if you do the above, chances are you will make bigger profits.
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