What strategies can a trader use?
So when starting out, it’s important to have a strategy in place. The simplest of these is using a “stop loss” and a “limit order”.
A stop-loss basically protects you against the losses getting too excessive. You put it in at a rate where you’re willing to lose a certain amount, so if the market does move against you then it cuts your trade at that point.
A limit order works on the top side, it keeps your profits from being eroded. If the market does move in your favour to such an extent that you’ve got an amount that you’re happy with, it cuts the trade there for you automatically.
What is the best way to get started?
So when getting started trading, the first thing you need to do is familiarise yourself with the risks involved. It is a risk you’re going to play.
First of all, pick a trade – a market that you know something about – don’t go straight into something that’s far too exotic. And keep up-to-date – it can’t be stressed enough – make sure that you’re fully aware of the market that you’re getting into.
When might you want to change tactic?
In general, when it comes to trading, it’s worth sticking to your tactic as long as you can, and only change if it’s absolutely necessary. The one rule you do wanna stick to is never run a loss. If the market is moving against you quite significantly and you haven’t had a stop-loss trigger, don’t keep it running, don’t wait for the market to turn (more often than not, things keep going against), just cut the loss and start again.
Where can traders get information to inform strategies?
When trading, it’s crucial to have up-to-date information at all times. You need to know what the markets are doing.
Most trading sites will ave their own analysis, they’ll have analysts that can give you an idea of what they expect the market to do – and that’s definitely worth subscribing to.
And having an economic calendar on the site is also very handy, so that you know: when the data releases are happening, when the key announcements are gonna be made – a good site for that is forexfactory.com