Secrets of Success in the Forex Market

Online Currency Exchange: How to Win With It?

Thanks to COVID-19, the Forex industry is booming. Individuals have been able to trade currencies online since the 1990s. Now, when remote work is often the only opportunity, the international army of traders is growing quickly. In Malaysia, you may gain access to huge brokerage brands. But is it really worth it? What are the prerequisites for success?

Currency traders enjoy flexible schedules, but they should take full responsibility for their actions. No broker guarantees results. The company provides all the necessary tools, but it is your task to use them correctly. Here are a few tips that should help you achieve better results the next time you log in to your trading platform.

• Be Very Thorough

Create a solid strategy. Currencies lose and gain value all the time, so traders should be ready for ups and downs and know how to behave. There are two ways to make decisions - fundamental analysis or technical indicators.

In the first case, you look at factors like GDP, interest rates, unemployment, to understand whether a currency will strengthen or weaken. This data is provided by the media, and trading software condenses the most important updates in its economic calendar.

On the other hand, there are indicators like volume or moving averages. These are embedded features of trading platforms and apps. They allow you to see price patterns that are likely to reoccur. Technical analysts believe that nothing is random, and they rely on groups of factors to make buying and selling decisions. For instance, when volume and price action change in unison, this is evidence that trade is worth opening.

Of course, nothing prevents you from using both approaches for higher accuracy. Remember, however, that the market is beyond your control. You may only predict where it goes and protect yourself from excessive loss. Losses will happen eventually. Here is how to make sure they are rare and insignificant.

• Protect What You Have

As any trade can bring a loss, you should always limit possible damage. Generally, traders are advised to put no more than 1% of their capital at stake per trade. Trading platforms have handy features that allow automatic execution - i.e., the system finalizes a trade when the desired price level is reached.

There are two such instruments - stop loss and take profit. They allow you to specify the lowest and the highest acceptable price. When either of the levels is triggered, the trade closes automatically.

This way, if the market moves against you unexpectedly (for example, you thought it would rise, but it collapsed), your loss is limited to the stop loss value. Learn more about foreign currency trading in Malaysia from official brokerage sites.

• Trade Through a Regulated Broker

Of course, you are guaranteed to make zero (and lose your deposit) if you trade through a scammer. Such companies trick you into believing you are making a profit, but it is impossible to withdraw the funds. Choose providers with official licenses from such regulating bodies as the FCA in the UK, the FSCA in South Africa, the CySEC in Cyprus, etc. (for example, these regulate the FXTM broker).

• Use Losses as Opportunities

However good your trading acumen, mistakes will happen at least occasionally. A trader should take them in stride. Use them as learning opportunities!

It is advisable to keep a trading journal and note down details of every trade, from initial market conditions to the final result. This way, it is easier to see what does not work for you personally and improve your methods.

When a trade goes awry, stop and think about the causes. Is your analysis to blame, or has the market moved unexpectedly? Successful currency traders do not let errors upset them. This is simply a part of the game. Sometimes, you will fail - just limit the damage.

• Control Your Emotions

Finally, it is imperative that your feelings do not interfere with your thinking. Emotions, both positive or negative, may cloud your judgment, resulting in failure. Never trade when you are depressed or overexcited. All too often people tend to overtrade and open more positions than necessary due to feelings like fear or joy.

How to Win

While victory is not guaranteed, there are things you can do to improve the odds. Develop a thoughtful strategy based on popular systems and your own experience. Fortunately, there is a wide range of educational resources like webinars, tutorials, articles, books, etc. Since the 1990s, the trading community has devised multiple approaches that may work for you.

Secondly, limit your losses and get out of losing trades quickly. Do not put too much at stake. Instead, focus on long-term accumulation of profit. Whatever happens, do not allow yourself to trade when you are emotional.