You need to manage your money when trading. The goal in forex is to make profits without risking all your money. There are a number of money management methods you can use.
Try these techniques out. Open a Cent Account, and make forex trades for as little as two cents. It’s the low risk way to learn forex trading.
Some traders don’t use money management; it some cases, it’s part of their strategy. We don’t recommend this, especially if you have limited funds. You could lose your entire deposit or even end up being bankrupt.
As a forex trader, you may want to open multiple positions; for example, you may trade both EURUSD and EURGBP at the same time. Here are some things to keep in mind:
Don’t invest all your money at once; decide how much you want to invest when you open a position.Risking everything isn’t a good idea; if you start to lose money, you could get a margin call.
This is similar to investing a fixed sum, except that you invest a fixed percentage of your account balance. If your account balance goes up, the amount you invest goes up as well. If your balance goes down, you invest less.
Keep a history of your closed positions. Analyse and act on these:
If you do this, you can increase your profitability.
With forex trading, timing is everything. If you enter the market at the right time, you’ll make money. If you don’t, you’ll lose.
One way of determining the right time to enter is to use moving averages:
Use the difference between the short-term and long-term moving averages to time your market entry:
There is also a wide range of other indicators you can use when trading.
The big moment has arrived. Here’s what you need to do to make your first trade.
If you don’t already have an account with Edeal , open one today and start trading!
Analyse the market and select a currency pair that you want to trade. Decide which currency you think will go up, and which one will go down.
Choose the amount of currency you want to trade. The more volume you trade, the more you can earn or lose. If you’re a beginner, we recommend that you make small trades.
When you make a trade, you should set a profit target. When this target is reached, your position will be closed automatically, and your profit and original stake will be transferred to your account.
Similarly, you need to decide how much you’re willing to lose. Set this and once again your position will be closed automatically once the price reaches this limit. Your remaining stake will be transferred to your account. Remember not to risk all your money.
Look at the parameters you’ve just selected. Make any changes that are needed. Confirm that the price you wanted is still available; the price is only available for a short time and may have changed. If it has changed, decide if you still want to trade. If you do, place your order.
As soon as you enter your order, the data is sent to our servers. We check the details and execute your order right away. Once the deal is made, we send you a confirmation, and your open position appears on your trading terminal.
Once the price reaches a point where you want to sell, close you position and we will transfer the money to your account. Note that your account balance does not reflect your profit or loss until you do this.
Your position will be closed automatically if the price reaches the profit or loss limits you set.
You’re not limited to one open position at a time. You can open as many as you like, as long as you have enough money in your account. To do this, repeat the steps above for each trade you want to make.
Each forex trader has their own strategy. Some use well-established forex strategies, some build their own from scratch and others use a combination.
It’s important to develop your own approach. You have to be comfortable with your strategy, and it needs to deliver results. Beginners often find this a daunting prospect, so here are some basic rules to get you started.
Not all forex advice is good advice. Figure out where the advice has come from, and how much you trust the source. This is particularly important when using the internet. There are a lot of amateurs out there who think they know what they’re doing, but they don’t.
When you develop your trading strategy, you’ll start with a set of recommendations from analysts and other traders. Try these out on your demo account, and modify them to see what happens. It’s important to create your own formula for success, as this will improve your trading skills.
You can learn from forex analysts and experienced traders. They are still in the market because they are successful. Study their strategies and learn from them. Don’t follow them blindly, but test out what they are saying and see if it works.
Some traders make money from short-term market fluctuations, but if you want to understand where the market is going, look at longer time frames. Short-term data contains a lot of noise and can’t be relied on for overall market predictions.
Analyse the market using different time frames. Opportunities may emerge when you are looking at daily data, and not show up when analysing hourly intervals. Conversely, you can profit from short-term anomalies even if the long-term trend is different.
Technical analysis shows the likely market direction based upon internal forex market factors, such as the number of buyers and sellers in the market. However, the overall direction of the forex market is heavily influenced by the real world. Study economic events, such as growth figures and interest rate changes, and decide how these will affect the forex market.
Our forex experts carry out extensive fundamental market analysis and produce daily reports and recommendations. You can use these when formulating your forex strategy, but keep in mind that these are recommendations, not rules.
You can’t watch the market 24 hours a day, so set stops on your open positions. These are orders to sell when the ask price of a currency reaches a specific value. You can use these to lock in your profits and limit your losses.
Even if you are online, you should still set stops. Decide on these before you open a position. It’s often tempting to keep a position open once you hit your original limits, and setting a stop will make you think twice.
Certain currency pairs are very volatile; the price can jump up or down suddenly. When you’re trading a volatile currency pair you should do two things:
At the end of Friday trading, the American market can be very volatile. There’s a lot of news at this time, and many traders are closing their positions.
The same applies at the end of the month.
This is not an exhaustive list. You may choose to ignore some of these rules and to add others as you become more experienced. However, we would recommend following this list when you’re starting out, as doing this will help you avoid some of the most common pitfalls.
Open a Cent Account with Edeal , and start developing your own strategy today!
In the forex market, as one major forex market closes, one in another part of the world opens. Unlike stocks, the forex market operates 24 hours daily except on weekends. Traders find this as one of the most compelling reasons to choose forex, since it provides convenient opportunities for those who are in school or work during regular work days and hours.
In 2013, the Triennial Central Bank Survey of Foreign exchange and OTC Derivatives Market Activity provided statistics on the amount of currencies traded daily, and has stated an average of $4 trillion traded daily. The break-down of this amount shows that $1.490 trillion were traded in spot transactions, $475 billion in outright forwards, $1.765 trillion in foreign exchange swaps, $43 billion in currency swaps, and $207 billion in options and other forex products.