All of them are constantly looking for new ways to multiply their cash flow with Forex trading and minimize risks associated with their financial activities. For beginning and professional traders alike, here’s a recap of some of the most helpful strategies to grow Forex trading profits.
1. Invest heavily in your ongoing education
Luckily, there is no shortage of high-quality educational resources for those who are seeking to improve their knowledge with some practical tips from the field. Ideally, a Forex broker should be able to provide his/her clients with high-quality educational resources. Not all brokers do this, but there are some notable exceptions, for example Larson & Holz. Their training center provides their clients with direct access to some of the finest advice on Forex investment plans and strategies. Some of the materials one can expect to find in their digital library include:
- trading strategies and psychology;
- technical indicators;
- market analysis in Forex trading;
- CFD, stocks and Forex ebooks and a glossary.
Making educated decisions in Forex trading is both art and science. Traders must commit to investing significant efforts in their ongoing education as this would help them make good investment choices, which, in turn, would multiply their cash flow. As a trader, be prepared to learn patience and wait as this strategy does not bear fruit overnight. Forex simulator websites also prove to be extremely helpful.
Larson&Holz: should you trust this broker?
Let’s consider the most interesting tips from the brokerage company Larson&Holz.
1) The firm offers a no-deposit account. Certainly, the majority of brokerage companies provide such bonuses. But there are differences in size and conditions for obtaining such a bonus. At a first glance, it looks pretty tempting.
2) Information about one interesting matter has recently appeared. It turns out the company offers a unique certificate. It is aimed at increasing the financial activity and generating an additional income when obtaining passive profits.
3) Another point that deserves special attention is the offer for existing call centers. Official website of Larson&Holz even presents a banner to attract more attention.
2. Make a plan early on and stick to it
Success with Forex trading can only come as a result of a concerted effort, perseverance and rational, emotion-free decision-making. Apart from your trading knowledge and skills, one of the most important factors is your personality. Decide how much risk you are able to tolerate on a daily basis. Sure, each Forex transaction is associated with a certain risk, but there’s a difference between reasonable and unreasonable foreign exchange risks in a Forex market.
As a Forex trader, develop a trading plan that would correspond with your personality style. If you like to build up momentum every day without taking significant risks, day trading might work really well for you. On the contrary, if you are an experienced trader with a wealth of practical knowledge, position trading might be more to your liking.
3. Balancing a lot size and a deposit
Statistics show that beginning traders are more likely to succeed if they start trading in small volumes. A frequent case is a margin call, which occurs when the price is reversed in the right direction. Obviously, it is preferable to enter this position with the deposit left intact. For traditional currency pairs in various Forex markets, such as EUR/USD, it is worth trading one micro lot for every hundred dollars in the deposit.
The rationale behind this approach is that the smaller the time interval considered by the trader, the higher the odds of a greater number of random market movements. With a normal 100-pip intraday movement, suitable leverage is 1:10. Of course, a trader can use a larger margin. However, this would make the lot much less stable.
4. Cut your costs
Cutting your costs will not directly multiply your Forex cash flow, but it will lay out a groundwork for a genuinely successful trading strategy. Analyze your transactions to figure out how many positions showed positive dynamics right from the start. Sometimes, in order to make a profit, you need to cut your acceptable loss threshold by half.
5. Use stop loss orders
A lot of traders intentionally abandon stop loss orders, which prove to be such a useful tool in Forex markets. For the sake of objectivity, it is worth noting that not placing a stop loss does not necessarily mean that a trader will incur losses that would equal the entire amount of the deposit. In reality, a stop loss order is applied in any case. However, it can equal the amount of your deposit which might be upsetting in case of a failure.
6. Pick your favorite strategy and excel at it
Some statistics show that a whopping 90 percent of beginning traders fail to cope with Forex trading cash flow and, eventually, lose in this market. This is why it is imperative to narrow down your focus on just a few select strategies that you feel you would like to master. Professional traders recommend achieving excellence in one trading strategy in order to gain confidence and then move on to decide whether is it worth sticking to it or break into new uncharted territories and explore other trading methods.
This is not to say that traders should use the same strategy for the rest of their careers. Discovering new methods and learning new skills is crucial in Forex markets but this has to be done in a systematic way as opposed to hectic switching from one method to another.