Forex trading is perhaps the largest financial market in the world and is currently seeing a boom in the Indian market. The Forex market is worth more than $2.4 quadrillion (as per last data in 2019) and has a daily average turnover of around $6.6 trillion. These numbers will sound overwhelming and so is the volatility in this market. The sudden ups-and-down can drive traders on a psychological roller coaster ride. That is partly why trading is no cup of tea.
Let us understand what is Forex Trading
In simple terms, the foreign exchange market is a decentralized platform where banks, firms, and individuals can trade currencies. Forex acts as a hub for the different currency markets around the globe. It is one of the leading marketplaces with the highest trading volumes worldwide. These high trading volumes create extreme volatility in the price charts of different currencies. It is also a major reason why most people are attracted to forex trading as the opportunities to trade for a profit rapidly increases with those price fluctuations. Nevertheless, the possibility of losses is also much more likely in the forex trading market.
Trading in the forex market can help you earn profits if done diligently with decisive strategies in place, but a lot of people might not know how to do it correctly. So, here are 4 easy tips to keep in mind while trading. These will help you in construct smart strategies, giving you an edge over others. Also, these tips will improve your consistency and can help you to get access to a funded trading account.
4 Easy Tips to Safe Trading in FOREX
#1 Risk appetite
Always trade according to your risk appetite. The possibility of losing some or all of your initial capital is what is called the risk factor. Since risk and reward go hand-in-hand, it can also boost the likelihood of gaining a profit, if done with a solid strategy in place. Moreover, there are certain factors that should be taken into account while trading, like the leverage ratio. Never put your money into an investment that you cannot afford to lose. Leverage is the concept of using borrowed money to increase an investment’s return. It increases your market exposure even with a limited number of assets. Nevertheless, it’s never a smart idea to take on too much risk in forex trading, thus you should only trade with money you can afford to lose. Risks and returns are mutually exclusive, the higher the risk, the higher the probability of reward and vice versa.
#2 Timing is everything
The trends impacting the value of financial instruments change rapidly, so timing is everything in this market. It is essential that your trading decisions, from placing an order to shifting your stop loss, are executed expeditiously. Any delay could rob you of your gains. Ergo it is crucial that your source of trade is not only reliable but swift. Vantage a global multi-asset brokerage firm provides users with lightning-fast execution in the trade.
#3 Safe position
While there are thousands of blogs on the internet talking about profitable forex trading in India, the foremost aim of every trader should be to build a safe position in the market. For the same reason, there are a variety of factors that should be focused on while trading, such as managing FX risk, placing your trades correctly, considering pivot points, conducting thorough research, and maintaining a strong understanding of market conditions—the list goes on. The currency market is a vast space where market sentiments change rapidly. To make sure you are making the right decisions, you need a one stop source to learn about the market, where you can read your charts and place your trades concurrently without disrupting your trading journey. It might also be a good idea to take on something like this forex funded account challenge, using a simulated trading account so that you can get an idea of what a day of trading looks like without actually risking any real money.
#4 Leveraging tech
The need to visit the stock exchange offices to verify the changes in the foreign currency market has long since passed. With the development of new technologies, traders can now get real-time market data on asset prices, and can benefit from greater efficiency and effectiveness in the trading process. For example, Vantage offers a reliable trading ecosystem that is user-friendly and provides fast execution, so customers can trade on their own terms more quickly and easily. Their Vantage app allows people to trade over different market segments (like forex, crypto, indices or shares), from wherever they are. The App’s ultra-fast execution, stable performance, and round-the-clock dedicated customer service support ensure that with Vantage, traders can make the most of the market opportunities.
Vantage’s ever-improving network helps users to succeed at every stage of their trading journey, by providing them with the essential markets, tools, platforms, instructional resources, and customer support they need to trade. Speed is everything in the market. The more quickly traders respond to the shifting market, the better positioned they are to seize any potential trading opportunities. In that respect, Vantage has created a robust and comprehensive trading platform, with highly efficient processes, for users to enjoy a swift and efficient trading experience.
Trading in the foreign exchange market can be both tempting and risky. It offers a wealth of trading opportunities because of price volatility, but only if you fully comprehend the market. However, there are some aspects of your trading style that you will only discover and encounter after you start trading.
The more time you spend in the market, the better you will be able to understand and manage it.
