Learn Forex Trading for Beginners to Many Profits
Forex Trading is one of the investments that many investors have seen in recent times. Foreign Exchange or commonly called Forex is an investment made by exchanging one foreign currency with another currency for the purpose of foreign payments. The person who does forex trading is called a trader and the profits that traders gain are derived from differences in supply and demand at certain times and result in fluctuations in the values of the currency.
Forex trading is one business whose profit and loss is determined by the state of the market . Therefore a trader must always monitor the existing market conditions. This is due to market conditions that do not have a static basis which makes traders sometimes in an unfavorable position. Currency pairs are one that forex traders need to know. Many questions about currency pairs for forex, especially from newcomers.
These newbies generally ask what currencies are suitable to be paired with each other. There is no main benchmark in this currency pair because the suitability of the currency pair is based on the trader’s own knowledge. But in general it remains the most widely traded currency.
Things Traders Need to Know before Trading
Many people are interested in entering the forex market because they expect big profits in the future. Imagining we get big profits is certainly one of the valuable motivations. However, imagining the benefits of forex sometimes makes someone forget that forex also has a big risk. Therefore, you must know the market as you enter. So that you are not stuck in a loss on your forex stall, here are some things you need to know:
– Healthy mentality
When you decide to trade, make sure you are not only mentally “just want to get rich”. If you have that mentality, then the forex market will instead become a gambling field. You will trade with a lot that is not known. If you do this, in addition to not having profit predictions, you will only lose the previous capital.
– Knowing the currency pair
Forex is a currency pair trading from various countries. Therefore, this currency pair becomes the center of your trading activities. Make sure you don’t only rely on ego when trading forex. Find a currency pair that suits your personality. Don’t let you trade only based on information from friends or relatives whose truth is unknown. You can get confused, get lost, experience floating and loss.
– Determine realistic targets
As a newcomer, it’s better if you set a realistic target. If you are just entering the forex market and have set an excessive target, not profit, but you can experience a large loss that results in prolonged trauma.
– Avoid emotions
Forex trading, in addition to relying on expertise, also requires emotional skills.Use your patience and strategy to produce correct and profitable analysis.
– Strategy problem
Beginner traders are usually confused about where the moving candle is. The best strategy that can be used is a survival strategy because the “war” strategy is more suitable for those who are already pro in the trading world.
– Don’t make forex trading the main income
For beginners it would be better if you do not make forex trading as the only source of income. This will make you enjoy trading more. If you make forex trading the main job, then you will definitely depend on trading profit. You will try hard to make your trading always profitable. This can trigger an unhealthy trading process.
A simple strategy to produce in forex trading
Forex trading strategy is one of the important points that you must determine before entering the forex market. For beginner traders, there are 4 simple strategies that can be applied in the initial trading.
-Crossing Moving Average
Moving Average (MA) is the most widely used indicator by traders. When the MA is below the price, then he confirms the price is in a bullish trend (up). Conversely, if the MA is above the price, it means that the trend is identified as bearish. Crossing MA is a moment that is highly promoted in this technique. When the MA crosses the price, the indicator line moves the position indicating a change in the direction of the trend.
Overbought and Oversold are not seen in chart movements so that instructions are needed from signal oscillator indicators such as RSI, Stochastic, CCI and so on. For example RSI shows overbought limits at level 70 and limit oversold 30. Stochastic has levels of 80 and 20, while CCI signals an overbought price when it crosses the +100 and oversold levels when the price falls through -100. If a beginner trader can understand oversold and overbought then he can make this technique as a mainstay technique.
This strategy relies on the support and resistance levels which are the lower and upper prices in a range. The basic principle is that when prices form a proven support it will bounce up. When the price approaches the tested resistance, the first anticipated possibility of this kind of movement is the price bouncing down after failing to break the resistance line.
Trendline Breakout is effective when the market is trending. Trendline is a vertical line that acts as support and resistance. Breakout occurs when prices break the trendline and change direction. If the trendline is tested strongly, then the breakout signal will be the beginning of a reversal or reversal.
Profit and loss management in forex trading
Timeframe, market conditions and entry or exit points are things that must be considered in order to determine trading profits and losses that are uncertain.Regarding the risks that will be faced when starting investment in forex trading, special tips are needed to minimize or even reverse our position when for example being in a minus position, including:
- Cut Loss
It is a step to close your position that is contrary to market price movements. Cut loss is used to limit the losses obtained so that it does not get a greater loss.
This step is almost the same as cut loss. The difference is that after closing our losing position, we can immediately open a new position with the same direction as market price movements.
This method requires extra capital to still be able to maintain the position that we have opened before and it turns out to move against the market price. The three risk management above is very simple to do. However, when you know the three risk management above does not mean you will not experience loss. If you look closely, the three risk management above rests on one thing, namely the ability to analyze price movements. Risk management will never be effective if a trader is unable to analyze correctly and accurately. So make sure you know the analysis before starting forex investment.