Already Know the Holy Grail in Forex
Already Know the Holy Grail in Forex – Forex investment is one of the investments that many investors have seen lately. What is Forex? The meaning of the word Forex comes from Foreign Exchange which means the exchange of foreign money between one currency and another with the initial purpose of foreign payments. The profit of traders comes from differences in supply and demand within a certain time and results in fluctuations in the value of one currency or another.The difference from each of these currencies then generates profits.
There have been many successful people after investing in Forex . Although their successes and successes did not happen immediately there were even some who failed, but now they have enjoyed it.
Are you one of the successful traders? Congratulations! You have succeeded in the world of your career and managed to overcome the problem. What about those of you who still can’t be like these successful traders? This means you need to learn more about the key to success as Forex trading.
There is a right way to get out of the problem with the Holy Grail. There are several Holy Grail in forex. Two of them are using the daily time frame and Risk / Reward Ratio.
One of the factors that usually causes a lack of success of a trader especially in the early days of open is a low addiction to the time frame, for example a 5 minute and 15 minute time frame. Usually when we enter with a low time frame trading results are inconsistent even though we have spent hours analyzing market movements every day.
When in the beginning of a career your trader receives a lot of noise and a signal error that is useless at a 5 minute and 15 minute time frame which would otherwise spend your time and money. When you trade under the daily time frame even less than 1 hour it is said to be unproductive and leads to gambling.Whereas if you use a daily chart it can be said to be a ‘holy grail’ of Forex trading.
For those of you who have implemented a low time frame it will be difficult to get out of this addiction. Market price movements at low time frames are definitely very tempting. This will lead to over analyzing the market. But if you understand that actually to be a successful forex trader we need a big profit in a month with just one open position once.
But when you can escape from this addiction and trade with a daily chart you will be able to be realistic and think ahead. The reasons why you are advised to use a daily chart include:
- The Daily chart will provide a clearer market picture, thus increasing the ability to analyze motion with prices in the long and short term.
- Greater risk / reward ratio. When you don’t enter the market often like if you use a low time frame, then you can increase the risk presentation.
- Daily chart also reduces your trading frequency. The key to success in your trading is largely determined by the quality of each trade you have done rather than the quantity.
Risk / Reward Ratio
Risk / reward ratio is a holy grail in Forex trading . Disciplined traders apply the risk / reward calculation in each trading position will get a consistent profit. There are many strategies that can be applied in trading, but with the right risk / reward settings, consistent profit will be easy to get even though our trading strategy setup is not really mature.
The first thing a trader must do in this risk / reward ratio is to calculate the risk that is daring to bear. This is aimed at the realistic trading. A mistake that traders often make when calculating risk and reward is to determine the reward first (setting the stop loss level too close to the entry level). This results in a planned strategy not going well. If you calculate the risk first then you will be more concerned and ready with the risks that will arise. The reward level is usually determined 2 to 3 times the risk, as well as using the trailing stop method by shifting the stop loss level.
The mistakes made by traders generally are not disciplined in trading execution in accordance with the risks and rewards that have been planned and determined in advance. If we really apply the risk and reward strategy and use an adequate trading strategy, then this is a ‘holy grail’ factor in trading.
For other holy grail techniques can also be done by way of such as Trading Balance techniques