Forex trading is a complex task, and one that can take a lifetime to master. There is no shortage of material written on this topic, and major investment institutions spend millions of funds for their trading and analytical staff. As a private trader, getting to grips with Forex trading success is learning from mistakes, and mitigate your losses in the first degree is an essential skill you must master. So while you're busy learning how to trade forex, we thought that we would compile a list of the top 3 trading tactics should bear in mind that will help you shortcut these often costly mistakes.
1 Use pauses to your advantage
to stop and stop loss limits of his friends, and should be used to the fullest extent possible, mitigate their potential downside risk. Whether you go long or go short, if you are swing trading or scalping, set tight enough to stop is important for keeping the lid on his potential liability from the wayward craft in making sure you do not accidentally wipe out your trading capital.
Of course, there is little balancing act involved in making sure your stops are positioned too tightly, but they can be a great way to give you the essential peace of mind to know that your potential liability, regardless of the degree of leverage, is limited.
2 Respect leverage
leverage can be your best friend when it comes to Forex trading, but also your worst enemy. It is important to remember that while leverage can ramp up your gains, so too can eat your way through your capital when you've got a losing position. Respect the power of leverage and understand that it can destroy your account if you're not careful. Do not make the mistake of leveraging to the hilt, if you can not afford it - took over the position, the more serious move percentage points in either direction
.By ensuring that you factor in the worst-case scenario, the outcome of the calculation if you can afford the advantage of position, it should be possible to more strictly regulate when you should and should not affect his position.
3 Do not get emotionally attached to their positions
cemetery is full of forex traders who felt they were on a good thing. They would spend hours researching the currency pair and they'd stumbled across a sure fire way to skyrocket their earnings. A few minutes after entering their highly leveraged positions, the value of the currency fell by 5 pips, but that's ok, right? It's not worth closing positions, but is not it? What about an hour down the line? What about 2 hours down the line?
The fact is that emotional attachment to the position, no matter how well reasoned and well researched much can ruin your trading portfolio. One of the classic rules of any kind of trading is to keep emotionally distant and make decisions based on facts and numbers - in this case, knowing when to cut your losses is a skill that many forex traders can not overcome <. / P>