Here are fifteen forex trading tips from trading experts around the world. These are no nonsense tips which will help any forex trader to improve their forex trading performance.
Forex trading tips from top traders around the world are what every forex trader needs to help them to boost their Spot FX currency trading performance. These tips are nuggets of wisdom from traders with vast experience of the forex market (up to 30 years experience). Test them, try them, take home more profits in your forex trading business.
1. Always check the US Stock market and in particularly the US futures market. The US futures market will often give the signal for the direction of the US Stock market for the day. Why would you want to know this? Well, for the US stock market to be bullish, the dollar needs to be sold.
If the dollar needs to be sold, then we can look for the strongest currency against the dollar and trade against the dollar (i.e. sell the dollar against that currency which is trading strongest vs the dollar.
2. Get a picture for what the US dollar index is doing at the current moment. The forex pair that makes up the US dollar index for the most part is the Euro Dollar (remember the Euro includes all the Eurozone member states and the Euro therefore has a higher weighting in the basket of currencies that make up the US dollar index).
Having a grasp on what the main pairs are doing apart from the Euro (i.e the Japanese Yen, Canadian dollar, Swiss Franc, British Pound and Aussie) will enable you to gauge an answer to the following question: are the dollar index pairs trading in the same direction.
Knowing this will give you a good sense of whether the US dollar is weak or strong. Again, following the rule from point 1 trade the strongest against the dollar (or the weakest if the dollar is strong for the day).
3. Work out a sensible place to put your stop loss and create a profit target that gives you a potential loss:profit ratio of at least 1:1.5 to 1:2. In other words, you are looking for a trade where you can clearly say that the trade may as well have gone against you at say 30 pips (e.g. set above a previous resistance level) but that if you were right in your directional decision, you can see an opportunity that the trade will run at least 45 60 points in the direction of your trade.
You do this so that even if your trade decisions were profitable only 50 of the time, you will still end up with 5 wins and 5 losses, but an overall profit. For example, let s say you place 10 trades with a 20 pip stop loss and 40 pip take profit. You were right 50 of the time.
You will have 5 losing trades ( 100 points) and 5 winning trades (200 points). This gives you a gain of 100 points. If you are trading $10 per point (i.e. leveraging 100,000 units of base currency aka 1 lot) that is a profit of $1000 for those ten trades.
Author Resource:
To view the rest of this article and dramatically increase your forex trading knowledge, visit Mat Bonseas' http://www.forexilla.com - the number one forex info site. link: http://www.forexilla.com Mat's writing about his five years of professional forex trading experience. Visit FOREXILLA now.
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