Forex Currency Investment Tips

    Your ability to trade the forex markets successfully and long-term often come down to applying a key set of trading principles.

    Today we are going to look at five of our best Forex currency investment tips.

     financial-investment-plan

    1. Develop a Solid Trading Plan

    Focus, clarity and confidence are three powerful outcomes you will get by creating and implementing a solid trading plan for your Forex trading.

    Professional currency traders are extremely clear on every aspect of the Forex trading systems including:

    • Locating low-risk trading ideas
    • Knowing when to get out at a small loss
    • Methods on how to ride a winner for a profit
    • How much risk to place on each trade

    By far the best FX investment tip is to start by getting clear on what your financial goals are and then building a solid investment plan to help you achieve them.

    2. Focus on the Forex Majors

    Focusing on the majors allows you to trade where the liquidity is. You will have less chance of gapping or slippage when you exit and all of this helps reduce your overheads.

    Some of the hidden costs of Forex trading include both gapping and slippage. You can reduce these hidden costs by trading the most liquid currency pairs around.

    The major currency pairs to focus on include:

    • The Euro Dollar EURUSD
    • The British Pound GBPUSD
    • The Swiss Franc USDCHF
    • The Japanese Yen USDJPY
    • The Canadian Dollar USDCAD
    • The Australian Dollar AUDUSD

    The news flow around the majors is in abundance. You will find plenty of volatility around the majors as well during key news events such as Non-farm Payrolls data, Inflation data and GDP figures being released.

    3. Combine both Fundamental and Technical Analysis

    Being able to time your entry using technical analysis and then having the confidence to ride the move due to fundamental analysis is what gives a lot of traders their trading edge.

    Technical analysis is the study of mathematical formulas applied over price and volume history to identify buy and sell signals.

    Fundamental analysis in the currency markets is evaluating the strength of a country by analysing the economic, political and social forces underpinning the country’s currency.

    Relying on one over the other means you are missing a vital part of the overall story.

    Many of the most successful currency traders combine both to increase their chance of success.

    traade-within-your-means

    4. Always Trade Within your Means

    Leverage is the ultimate double-edged sword for Currency traders.

    On one side, using leverage when you are winning multiplies your chance for profits. But if you use leverage and your positions are going against you, it can be disastrous.

    You must learn to control your leverage and be constantly reducing risk where possible.

    The smartest Forex traders always risk a very tiny portion of their overall capital on any one trade.

    You need to trade small, protect your downside and always be able to fight another day.

    5. Become Skilled at Cutting your Losses Off Short

    Traders quickly work out that controlling their losses is just as important, if not more important than making winning trades.

    You must have the discipline to cut your losses off short.

    Losses that get out of hand are difficult to recover from and make it psychologically challenging to find new trading opportunities.

     We welcome you to give our team a call to discuss your investment goals and objectives.

    You can call Walker Capital Australia on +61 2 8076 2210, and we’ll see how we can help you achieve your investment goals.

    For more information on currency investing, check out our full article: 7 Key Reasons Why Australians Invest In The Currency Markets.