In this Forex video, I will share three Forex trading lessons. The idea for this video came about by a youtube comment from a trader that was seeking advice. I thought to myself let’s make a quick Youtube video that answers these questions. I will be expanding on this in future videos. This Forex video is meant to get traders thinking about three things. Those three things are account size, the trend, and profit targets. The Next three videos that I make will cover each of these things in more detail.
Forex Lesson #1
Traders can start to trade with a small account size of $1,000.00 but need to pay close attention to their position size. Too many new traders come into the Forex market and think they will get rich quick when they start their trading account with $1,000.00 or less. This will cause newer traders to use too large of a position size as they chase massive profits. The real money is made in the Forex market by using proper money management and discipline. A trader should not grade themselves on their profit or loss, but rather on how well they executed their trading plan.
Forex Trading Lesson #2
Trading with the trend. Most traders or people that have heard about the financial markets have heard the term trend. Maybe they have even heard the phrase the trend is your friend until the end. I use the trend or market direction to point me in the right direction when I go to place a trade. This may be one of the most important Forex trading lessons that I have learned. I don’t however just see an uptrend and buy, I look for a retracement and then for the currency pair to meet my rule set before I enter the trade. I have learned over the years that trading in the direction of the overall trend makes hitting larger profit target much easier. When you fight the trend, the swings tend to be smaller in size and therefore your potential profit range is reduced.
Forex Trading Lesson #3
Using a profit target on multiple time frames must be adjusted. A lot of traders attempt to use the same size stop loss on a one hour chart that they use on a five minute or fifteen-minute chart. This method is not suitable for most traders as swing points on a 5-minute chart tend to be much closer to each other than on a one hour chart. Before you decide to trade on a certain time frame chart, it’s recommended that you backtest those results to see which stop loss size is best for the set-up that you plan to trade.
Forex Trading Lessons Video
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