Hello and welcome to the New Year’s edition of the bulls vs the bears. This week we are going to find out the most effective way to prosper as a forex trader. If you don’t know by now forex trading is about patience. You need to lie in wait like a crocodile and allow the right trade to pop up on your screen.
This trading approach should be the cornerstone of your trading strategy. Come to think of it, it should be part and parcel of your trading edge. If you perfect it like the back of your hand, it should edge ever so closer to being a prosperous forex trader. I guess the burning question on everybody’s mind is:
What Is The Most Effective Way To Prosper As A Forex Trader?
Simple. Don’t jump head first into the market. Instead lay low for a retrace, pull back or a complete break in the market. Now I can hear someone asking “How is laying low like a crocodile supposed to help me as a forex trader?” Well there are three ways laying low like a crocodile can help you as a forex trader.
1)Laying low like a crocodile helps you get a tighter stop loss which then allows you breathing space to cash in on a trade by upping your risk reward. Not only that but allows you to increase and trade on a bigger position without risking much money.
2) Laying low also saves your stop loss from being blown to bits-Assuming your stop loss is put in a safer spot. In so doing You give your trade more oxygen to breath. So that instead of incurring a loss on a trade you are in a position to make a healthy profit on a trade. And you can afford to take significant risks based on your risk/ratio. It will most certainly do your trading account a whole lot of good.
3) Laying low also give you the option of holding out on trades you are not sure of and reluctant to take a chance on. In such a scenario, you can put in a stop loss. Better safe than sorry. Isn’t it? Even more important, you eliminate the possibility of a stop out(or your stop loss being smashed). That should afford you a good night sleep don’t you think?
Now let’s look at a few pictorial examples.
Ladies and gentlemen, here is a classic example for waiting for the right trade using the EUR/USD pair. Here you are entering a trade you are absolutely sure about. As you can see waiting for the right trade increases the risk reward on the trade. The 3:1 risk ratio at the resistance level illustrates my point here. Notice the placement of the stop loss 50 pips below the entry price. This increases the likelihood of a huge risk reward.
Now on to the next graphic
This is a classic illustration of entering a trade on a hot trend. Here you see pin barsignals forming after pullback at support and resistance levels. It’s what you call confluence of factors. After pullback then the uptrend continues. This will be the perfect opportunity to make your move,
That’s a wrap for The Most Effective Way To Prosper As A Forex Trader”.” Yes it’s possible to profit from breakouts and breakouts. The whole idea behind being effective trading is to get a hot entry and to get safer stop losses. This helps you escape market uncertainty and gives your trades more time to rack up the profits.
Even more important, your trades have to be part of your trading plan. It must be part of your trading armour. You can’t go to war devoid of weapons. Can you?
Til next time take care.
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