Here are some forex trading tips to improve your forex trading and become a more successful fx trader, follow these forex trading recommendations and you'll trade better and more profitably.
1. Lengthen your time frames.
A lot of currency traders are obsessed with the short term charts such as the 1 minute and 5 minute charts. When you watch the price action on these charts you will see how quickly the price moves, and how quickly you can make (or lose money). The price can easily move 5 or 10 points in an instant, so trading a standard lot, you could easily bank $50 or $100 profit in a matter of minutes (or seconds in some cases).
However the trouble is that this is a lot harder than it sounds because not only do you have to take the spreads into account, which can be 2-4 pips, but you also have to bear in mind that the price movements can be quite random. This is why technical analysis doesn't work so well on these charts, and subsequently many people struggle to make money. You are much better off lengthening your time frames and moving up to the 4 hour or daily chart, for example.
2. Let your winning trades run.
Another thing you can do is to cut your losing trades early and let your winning trades run for as long as possible. I appreciate that it can be tempting to bank profits as soon as they are on the table, but the truth is that the big profits are to be made when you hold on until your original target price has been reached.
Your goal should always be to gain far more points from your winning trades than you lose from your losing trades. By doing this you can afford to lose a few trades now and then and still make excellent profits.
3. Interact with other traders.
Forex trading can be a lonely business and it can certainly feel like that when you keep on losing money. That's why it's always a good idea to talk to like-minded traders, even if it is just via the internet.
By going on forex forums and chatting to other traders, you can exchange ideas and pick up some useful tips and strategies. Everyone has the same goal - to make money - so it makes sense to try and help each other achieve that objective. You may even be able to find a mentor if you're lucky, and this will really help take your trading to the next level if they are really profitable themselves.
So although it is not easy to become a consistently profitable trader, there are things you can do to increase your chances of success. The three things that I have mentioned in this article will hopefully help increase your chances of success in forex.