Sunday, December 17, 2017

How to Enter a Forex Trade

A lot of people trade in the Forex market. Some do it heavily on a day to day basis while others do it less often every few days or even weeks. The sad news is that most of these people see their hopes dash and their bank accounts dwindle. The sad reality is that most traders lose money. The statistics state that as many as 95% of traders end up losers.

Does this mean you shouldn't trade Forex? No it doesn't. What it means is that you need to take the time to learn the fundamentals and know how to apply them. The first thing you should do is know the right way to enter a Forex trade.

I guess you may be thinking that you already know this, but bear with me. Most traders haven't a clue as to how to really place a trade to maximize your profits, minimize your losses, and have a hassle free Forex experience.

First step: Analysis

You need to analyze the market using technical indicators and/or fundamental economic criteria to find high probability trades to execute.

Step 2: Place an initial stop

Before you think about profits you have to minimize your potential loss. This is done by placing a Stop Loss to determine your maximum potential loss. The initial stop should never be changed.

Step 3: Place a Take Profit price

On each Forex trade, you have to know how much money you want to make. This is done by placing a Take Profit order to exit the trade at a certain profit. This will allow you to not monitor the trade and waste a lot of free time in front of the charts.

Step 4: Place a trailing profit

As you trade begins to enter into profit, you want to move the Stop to a place which will guarantee a profit (or at least a break even trade). This is done by a trailing profit order which moves with the market price to make sure you make a profit even if it's a small one.

These are the 4 steps. Don't enter a Forex trade without them.

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