Foreign exchange is a very lucrative business. However, there is a significant amount of risk involved in the trade. The risk is compounded by not having the right knowledge and information for application in trading. There are numerous techniques and approaches for use, most of which are taught on the various educational platforms and mentorship programs that offer Forex education. It is important to note that not a single technique can guarantee profits. Having used retail traders' techniques for over eight years, I can confirm that they do not always result in coveted forex trading profit for those who are curious. There was a time when a trader spotted a double bottom, and the price would then reverse and inevitably go up without failing. However, that is no longer the case. The plate has changed dramatically with more traders joining forex trading, and the movement of prices has become more randomized. The increased number of traders participating in the market today has allowed market manipulators to act blatantly without the need to mask their actions. In the early days, there was less price manipulation going on for certain. Also, given that the forex market is driven by human behaviour, an increased number of participants causes the effect of randomness in the market. Therefore, simple strategies such as support and resistance, and trend lines may fail to produce desired results from time to time.
The market moves as long as there is enough liquidity to pay the winners. Market manipulators are entities such as banks and hedge funds that can place large volume orders in the forex market, which are enough to create artificial supply and demand. The fact that such institutions can sway or influence market movement is a risk factor that ought to be included in one's risk analysis. As the market moves toward prevailing demand and supply, it leaves footprints. That is likely the point for the price to visit and bounce off of. These are areas of order accumulation, and they present liquidity just above equal highs, equal lows, bear trend lines, below bull ones, and at golden Fibonacci zones. Commonly, the price will form a double top, and then within a few candles, bounce back up, take out stop losses above the double top, and then drop as previously anticipated. In this case, the market makers are moving the markets to their points of high liquidity where they can take out stop losses set by early sellers and trigger their pending sell limits. If a trader makes the simple adjustment of placing a pending order where they would have placed their stop loss, they instantly become profitable forex trading candidates.
As established so far, smart forex trading techniques improve chances of profitability in forex markets. However, one has to start by taking care of the small stuff that makes a big difference in one's journey to becoming a profitable trader in forex investment. The first step involves finding a good forex brokerage firm which means picking one among existing licensed brokers. Licensed forex brokers are regulated, meaning that they comply with industry standards. The forex brokerage firm of choice must also offer fair trading conditions. Fair trading conditions include low spread, reasonable leverage, a variety of deposit and withdrawal options, fast execution, and a responsive customer support service. My favourite is quick withdrawals, allowing you to easily access funds or profit from forex trading. Once you have selected the best broker online, the next step involves signing up, verifying your profile by submitting KYC documentation, downloading the forex trader app, funding, and trading. One could start either currency trading or stock trading. If undecided, look at how many stock brokers make compared to forex traders. Once you select a category, you must decide whether to become a day trader or a position trader. To start day trading, you must select the best day trading platform. Otherwise, you need a broker who does not charge you a lot for holding positions overnight for days if you are a position trader. A position trader is also known as a swing trader. Swing trading involves holding trades for days, months, or years.
Trading requires learning how to analyze price charts. Attending forex trading webinars can help you acquire new trading skills and learn about trading psychology which is a fundamental part of being a trader. If you do not have time to analyze, you can purchase signals from an expert or experienced trader. Signals are price predictions where you pay for and get information on the entry price, stop loss, and take profit level. For example, once you pay for gold price predictions, you may get a message such as "Buy XAUUSD at 1630.21 with SL at 1610.00 and TP at 1758.12." All you have to do is go on your forex trader app, plug in these values, and wait for the trade to play out.
Forex investment is a great opportunity to leverage and generate extra income. However, most people who are not in the business claim that forex trading is a rigged scam to take your money. Most people lose money because they start trading without knowledge or discipline, which is essential in business. Many testimonials exist about how forex trading can completely change your life. The profit potential is like no other, but the risks are proportional to the potential gains. However, there are approaches, Dos and Don't, and knowledge that can minimize the risk and optimize profits. Everything in life involves taking a risk. When a baby is learning to walk, they risk falling. When you are enjoying a good meal, you risk choking. The person who works a 9-5 job faces the risk of getting fired for whatever reason. The lifestyle you want is on the other side of fear, especially the fear of loss. Start trying and taking chances, and you never know; you could surprise yourself as I did. I turned 1000 USD into 14,000 USD through forex trading, and my life has never been the same.
Here is the best thing, you may not even need to risk your cash; you can try no deposit bonuses or use prop firm's funding. Forex brokerage firms provide no deposit bonuses to allow interested traders to test their trading conditions with real money. After fulfilling certain terms and trading conditions, one can withdraw or reinvest profits. Prop firms provide traders with trial money for undertaking challenges after paying a small fee, and when a trader passes the challenge, they get funded with real money and a profit share contract. Some prop firms charge as low as $500 for access to $250,000 in trading capital. That, coupled with a 70 to 30 per cent profit share in the trader's favour, makes for a great deal. The downside is that the prop firms usually issue strict conditions such as maximum daily loss, limits whereby one cannot trade during weekends and high volatility events, and traders can only request withdrawals on a bi-weekly basis. Despite all the challenges one may have with prop firms, they are a valid option for traders with little capital. The simplest and most reasonable option is to deposit your funds, giving you full control over your trading operations. You can withdraw your capital or profits anytime you want.