3 Important Rules For Trading Foreign Exchange Online

Online stock trading can be both good and bad … The good thing is, when done correctly, you can benefit greatly from good trades … The bad thing is, when done incorrectly, you can empty your inventory account faster than you can blink.

The Ease of opening an online account  and being able to buy and sell currency great. Technology has come so far … but to make profits from trading, you must follow some rules. And they are …

1: Do not buy in once it’s too late … Sometimes “if you can see the bandwagon youv’e missed it. Why this question? Because the currency pair direction is driven by supply and demand and you don’t want to be the last person to jump on board, before the position heads in the opposite direction.

chart-upward-trend-currency2: Know your exit point (selling point) … If you buy XYZ currency at $10, then set your stop-loss points immediately. Know when you want to call it quits , and put a stop-loss  in place immediately. The reason? What happens if you leave your computer for a day and you discover that while you were away, XYZ Currency goes the wrong way and the value fell to $ 2 Action … you lost 80% of your money. But if you put a stop loss at $ 8, chances are you’ve lost a lot less than 80%. A good rule is to set your stop-loss at about 20% below your purchase price.

3: In a crazy market like foreign exchange, do not buy on the value … Scholarship is now up and down and down. Its risky to hold for too long now, unless you buy to hold for a very long time, chances are you will lose. I suggest that all traders should equip themselves with great technical analysis tools as it’s you versus the other guys who all have good equipment.

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