Forex trading strategy for beginners is too important, Hundreds of users join Foreign exchange market everyday. Success does not come in the hands of everyone. Surveys indicated that not more than 10% of traders and investors have been successful in this trading market. Fxtay Broker says it is a fact that beginners in this trading market enters without any strategy as they are experienced enough to understand the pros and cons of trading without strategy and adopting a good strategy. If their first trade goes in profit then they attempt for the next one without actually knowing that in which race they are running now.
Trading in Forex market without a strategy is like jumping into a well without knowing its height and water level and without adopting any security measures. So do not start trading if you don’t have a strategy and if you did this then whole of your money may be wiped from your account in few trades only. Sometimes it may also be possible that a single trade may prove a monster to you and eat all your investment. You should have well thought strategies for any situation and if you have good strategies then you can earn profit either if you are participating in a rally or trading against the trend. Remember to make strategies for the worst case and if the case goes best then your pocket will be filled with profit. The traders and investors should follow some strategies to make profit without losing continuously.
Forex trading strategy for beginners to follow
Decide your Risk per Trade
Risk Management is a most important part of Forex Trading. If you are not managing the risk then you are not prepared for the sudden price movements against you. You must decide the amount that you can afford to lose in a single trade and always obey your decision. The amount that you decide to lose in a single trade can vary from 2%-5%. If you can go lower than this percent amount then it is ok but should not be more than this if you want to remain in the game and continue searching profit earning opportunities. The amount that you decided to risk per trade will be helpful in determining your Stop Loss so set your Stop Loss accordingly.
Place only one trade at one time
Remember too many trades at same time will risk all your money and you will also not be able to concentrate on all the trades at the same time because concentrating equally on all the trades will become difficult. So place only one trade at a time and exit from it when your profit level is achieved.
Risk versus Reward
Your Risk should be same as Reward. For example, if you set a Stop Loss of 40 pips and profit goal is only 20 pips then it is high Risk and low Reward. This might only work if your percentage of winning trades is more than 67% otherwise if several losses in a row occur in your account then you will not be able defend your account and your money may be wiped out completely. Set your Risk according to the percentage of winning trades you think you can have. Keep your percentage of winning trades low because your strategy should be made for the worst case. You know some of Forex trading strategy for beginners but continue reading to know more.
Half your trade order size
You can half your trade order size with every next trade if market is going downtrend. It is because reversal is possible if price has moved in uptrend for sometime so if the trend reverses and you lose a trade then your total loss will be less than the total profit because your order size is bigger in profitable trades and your total profitable trades are also more than the total lost trades.
Double your trade order size
You can double your trade order size with every next trade if market is going downtrend. It is because reversal is possible if price has moved in downtrend for sometime so if the trend reverses then you will gain profit. Although the total profitable trades in this strategy may be less than the total lost trades but still you will make profit because the order size of your profitable trades is bigger than the order size of your lost trades.
Use Low Leverage
Your Brokers can provide you Leverage up to 100:1 or sometimes may be 400:1 but never use such high Leverage because if price will start moving against you then you will be helpless and if proper Stop Loss is not set then it may be a single trade responsible to wipe out your Forex trading account. Now you know all advice about Forex trading strategy for beginners.