What are the characteristics of a professional approach to the forex market? You must have heard people talking about that, but you may still feel confused. Well, the most important thing to do is to learn how to master yourself.
Be patient and able to concentrate on the risks involved in trading instead of dreaming about millions. Always try to come up with a strategy that is more likely to bring you profits. This essential aspect may prognosticate the benefit you could makeover a lengthy period, and for every single currency, you trade.
It may seem strange to understand why it is so crucial to be patient while trading forex. Usually, beginners in the forex market are desperate to play with too many trades during a short period, mostly targeting quick results.
Their favorite trading charts are mostly those with a brief time frame, which means they tend to opt for the day trading, always in search of new and advantageous circumstances. Unfortunately, trading forex with such plans of attack may prove to be disastrous for them.
If they took some time to evaluate the statistics of the market, they would find out that generally, the results are fragile, not to mention the false information associated with such movement. The levels of support and resistance are also weak, and you must know that they are known to be critical pivot points.
Anything can happen as long as new positions are likely to come up sooner than expected. The technical indicators appearing in the industry’s charts lack effectiveness because some of their primary characteristics are entirely inaccurate.
A relevant example in this respect would be the new situation of the Euro, hugely affected by the economic conditions of a large number of countries belonging to the European Union. This scenario caused a drastic fall in the EUR/USD during this last period.
A fall of the forex market is easily identifiable if the trading charts would be analyzed, taking into consideration the daily time frame plus. There will not be much evidence about the stalling of such vulnerability, even if you get to make use of a technical indicator, specific to the forex market.
On the contrary, if you take into consideration an hourly chart, there might be short-term price retractions, which would allow you to open some new long trades. It is, however, essential to be aware of the risks involved in such actions because you will be playing in opposition to a long-term trend.
Quite often, those who have no experience trading forex waste their time looking for trades, which can generate low expectancy values. Hence, with some luck, they could come up with, let’s say, a total of 60 wins, out of which $10 represents the average win and another $10 the average loss.
This means that they are likely to win $2 for every single speculated dollar. In such a case, a significant injury is expected to happen, not to mention that the profit is insignificant as opposed to the invested amount of time.
When it comes to an expert in trading forex, he would prefer to make decisions relying on the statistics reflecting a more extended period, not shorter than that one day. A result is a reduced number of trades but of much better quality. Let us say that they get to open no more than ten trades in one month.
These trades will change into eight wins, out of which $100 representing the average win and only $50 average loss. In such a case, the value of expectancy would be $70, which is much better.