What is the most heart-wrenching feeling that you ever had in Forex trading? Well, missing a profitable trade can be a good example. But the worst among the worst is when you lose money on a previously profitable trade. Though there are traders who can easily diminish the feeling along with experience, there are others who become too afraid to trade due to this traumatic experience. Not to worry. There are ways to prevent it from your future trades.
Know Your Levels
One very good use of your time is to learn to identify the support and resistance level accordingly. If you have very limited time to spare in studying Forex, you must put these things on the top priority. Throughout the time you spend studying, you become more efficient. It helps in prioritizing your efforts as well as maintaining focus only on the most important areas of trading.
Otherwise, if you don’t learn these things, it will be so hard for you to understand candlestick, much more, you won’t know where to begin. In this case, you will be under frustration and doubt. Finding critical areas in trading is also very important. Here are the key points that you need to bear in mind;
- Strongly remain on your daily or weekly timeframes
- Keep an eye on the major swing, whether it’s high or low
- Focus on looking for the major turning points
- Become adept in horizontals then trend lines
There Are Outside Forces – Be Mindful of Them
Being a Forex trader does not mean that you should only focus your attention on the charts and similar activities. You must also consider the happenings outside, from one week to another. These events could create an impact on the market, the reason why you need to be mindful of them.
For instance, the non-farm payroll report. This report affects one of the most powerful currencies, the USD. Not just that, it is also considered to be one of the most impactful occurrences which happen every month. Keeping these things in mind, you should know that the USD during this time becomes a very risky endeavor. This notion is not only applicable to the USD but to any currencies and news events that could affect each other.
The solution to this is to avoid entering a new position before an important news event can happen. You may stick to your current position as this is still the best option that you have.
Trail the Stop Loss On the Perfect Time
Trailing the stop loss may not be the best advice to some traders. But this topic has become one of the most heavily argued topics in Forex trading, and there is definitely a reason for this.
If you move your stop order too soon, you will only end up getting stopped prematurely. But if you also move it a little too late, the previously profitable trade will turn out sour. One important reminder to counter these occurrences is to stick to the daily time frame whenever you trail your stop.