Still having difficulties with your forex trade orders? Even a small mistake can cost you a fortune.
Developing the habit of planning your orders can be just what you need to get more winning trades in the long run. Here are four steps to get you started.
1) Set your entry, stop loss, and profit levels
You may feel confident about your fundamental and technical analyses but be careful not to overlook your entry and exit levels. Many traders make the mistake of setting these levels in stone. What you should remember is that you can adjust according to what the market gives you. When it comes to stops, however, it’s a little bit different. It’s up to you whether to use a time stop, a chart stops, or a volatility stops to figure out trade invalidation points.
2) Learn proper position sizing
If there’s a skill you’d want to master, it’s definitely proper position sizing. This allows you to take trades that aren’t too big or too small. As you know, the wrong position sizing could mean incurring huge losses or missing out on a high performing trading method.
For starters, it is recommended to use a maximum of 1% of your account for each trade. This helps minimize losses, but you can adjust this number as you develop your skills. You can use a position size calculator to determine what number best matches the risk you can take per trade along with your desired entry and exit levels. You can do this using Fintech LTD, a forex trading robot that makes trading simpler for beginners.
3) Figure out what type of order you need
Remember that in forex trading, “order” means how you enter or exit a trade. You need to determine the types of orders offered by your broker. You should look into advanced trade management tools as you improve your skills as a forex trader. These include good ‘till canceled, good for the day, and one-triggers-the-other. All this might not make sense at first, but they can prove invaluable for your future trading decisions. And be sure to practice using them instead of simply reading up as much as you can.
4) Keep track of your trade
The most successful traders don’t take things easy after placing an order. It doesn’t matter what kind of trader you are. It’s important to monitor your trade to examine the price action and other market drivers. This involves keeping up with the latest market news as well, which can have a huge impact on prices. As you gain more experience, you’ll learn how to weed out the noise and determine which ones require changes in your trading strategy.
These four steps are straightforward, which is how things should be for new forex traders. You can’t simply use advanced tools and strategies as soon as you start trading. Master your forex trade orders is a good starting point, as this habit can lead to more winning trades down the road.
