Everyone thinks that making a big profit in the Forex market is a very easy task. After joining the trading industry, people start to take their trades with great enthusiasm. Some rookie traders use maximum leverage to secure big profits. After spending a few months in the trading industry, they realize trading is not a get-rich-quick scheme. To become a profitable trader, one must work hard and learn about the critical elements in the trading business.
Intermediate traders often complain that they can’t earn enough money in the market. Though they are not blowing up their trading account, they are not satisfied with the profit potential. For them, we are going to give some amazing tips which will boost their profit factor to a great extent.
Table of Contents
Use Leverage Effectively
Inexperienced traders often ignore the leverage trading account as they think it can cause them big trouble. To become a successful trader, you must learn to use the leverage effectively. Take your trades by using the leverage but make sure you are not taking too much risk. Try to execute the trades at the endpoint of the retracement as it will help you to use a tight stop loss. By using the tight stop loss, you can easily increase the lot size without breaking the rules of risk management. Eventually, you can take advantage of the leverage trading account and make some decent profit without much hassle.
Trade The Stable Pairs
The elite traders always do the proper data analysis to find the best currency pairs to trade. They never take their trades in random assets as they know it will cost them big losses. Rookies often think that trading the major pairs is the best way to secure big profits in the market but in reality, that is not true. At times, you might find better opportunities in the cross pairs. In such a moment, if you ignore the trade signals in the cross pairs, you won’t be able to increase your profit factor. To reduce your fear in cross pair trading, we strongly recommend that you learn this trading technique in the practice trading account. Once you gain enough confidence with the cross-pair trading strategy, you should be able to make significant progress in your life without facing much hassle.
Learn To Ride The Trend
To maximize your profit potential in the trading industry, you must learn to ride the major trend. Without learning to ride the major trend, you can aim for a high risk to reward ratio. Try to maintain a 1:5+ risk to reward ratio in each trade so that you can earn a decent amount of money from a single trade. You may also switch to the higher time frame and execute the trades in a very strategic way. Once you trade the market in a higher time frame, you should be able to aim for a better risk to reward ratio factor. Never take your trades with a negative risk to reward ratio as it will ruin your trading career.
Learn Chart Pattern Trading Strategy
Securing a big profit is going to be an easy task once you learn to trade the major chart pattern. At the initial stage, learn about the continuation chart pattern trading strategy. Once you become good at continuation chart pattern trading, you may start focusing on the reversal chart pattern trading. While using the chart pattern, try to do the data analysis in a higher time frame. If you look for the major chart patterns in the lower time frame, the chances are very high that you will make silly mistakes. While trading the reversal patterns, use the fundamental factors also. Analyze the news data and see whether it supports your idea. If not, you should not trade the reversal pattern as the risk factors are a bit high compared to continuation pattern trading.