Forex trading is quite tasking and can be quite difficult if you don’t know what you’re doing. However, for those who have had a measure of success with it and are looking to upgrade to the advanced level, forex trading is easier. In this article, we will be examining some advanced forex trading tips and techniques that you can use to take your forex trading to the next level. In advanced forex trading, there are three major things you would have to learn. These are:
Also known as short term trading, this basically involves trading within very short periods using very high leverage. This is best done when you are absolutely confident that the trade will go in your favour within the estimated time frame. Scalping is used and quite effective following news items and a few other technical details.
For instance, if there is news that there will be gains on the dollar as against the pounds, you can easily place your trades in favour of the dollar within the short time frame. Scalping can last for a few minutes or hours depending on the trend of the market. Scalping is often adopted by beginner forex traders because of the promise of quick gains.
What they don’t know is that when the currency isn’t in their favour, they can and will haemorrhage money. So, to use scalping effectively, it is best incorporated into your overall strategy as against it being your main forex trading technique.
Another advanced forex trading tip or technique is hedging. The idea of hedging is to simply help reduce risk. The key is to trade in favor of both sides so that if one pair doesn’t favour you, the other pair will hopefully be in your favour. While there are many ways to go about hedging, it is often better to go with the simplest methods until you are absolutely sure of your risk capability.
3. Position Trading
This is basically long term trading. Unlike scalping which is based on mostly technical facts, position trading involves more fundamental analysis in combination with technical analysis. Position trading requires patience as it is not the typical get in and get out approach. In the process of position trading, you gain, then lose and the gain some back again after the market gets in your favour.
This forex trading technique should be used by only experienced forex traders who have the ability to take on risk, apply stop losses and are generally willing to wait until the trade takes a turn for the better. Most beginners who do this, tend to get feisty and impatient. So, they generally tend to get out of the trade when the pair they are trading falls below their target.
I hope these three advanced forex trading tips and techniques helped you as an advanced forex trader. Choose which suits or use them all interchangeably and your trades will be at least 90% more profitable.