Since and then, brokers have been offering us access to the foreign exchange by their trading platforms. It could be a specific platform of them or a more common platform like metatrader. They allow retail investors to trade currencies. Later, some online brokers also offer crypto-currency trading as well. Here, you will discover seven tips to successfully trade real and virtual currencies.
- TRAIN YOURSELF AND FIND OUT
Be aware that trading currencies and crypto-currency requires some solid knowledge not only in financial and economic culture, but also many techniques related to trading. That consists of technical analysis and its mathematical indicators, graphical analysis and different figures and in some case the difference between the booking order and market orders.
- DO NOT GO AGAINST THE TREND AS IT IS YOUR FRIEND
This means that in a bullish market you should buy while in a bearish market you need to sell rebounds.
It is unconscious in terms of currency trading to think that the market is wrong. You need to avoid this.
For encrypted currencies, if you expect to anticipate a trend before the introduction of an encrypted currency, you can participate in its ICO or Initial Coin Offering that will allow you to invest at a preferential price in cryptocurrency—in which you believe before its launch.
- LET THE PROFITS RUN AND CUT THE LOSSES QUICKLY
If you are advised not to take your winnings too quickly on a winning trade, do not delay too much. It’s the best way to lose everything! Use target profit (TP) orders and for limiting losses, use stop orders. Better, use trailing stop orders to protect your profits or reduce a potential loss.
- OBEY STRICT RULES OF MONEY MANAGEMENT
It is essential to set goals for profit and loss. And to respect them!
Keep some distance from your trading and especially your earnings. Do not think that you are gifted because the market is always right.
- ALWAYS KEEP A FOOT IN THE REAL
Although testing your strategy with a virtual account is recommended, do not consider that your performance on this account will necessarily be representative of your performance with a real account.
Do not lose the meaning of the value of your money either. Do not take the game at the expense of your private or professional life. Do not spend 12 hours staring at your screen to follow the courses by chaining orders.
And be careful, keep a foot in the real world, it is not necessarily obvious if the motto you trade is virtual! But it is possible. Rely on tangible elements and concrete information on which crypto-currency to invest in. Please, stay informed on crypto-currency websites review, developer training and skills, etc.
- PREPARE A STRATEGY BEFORE ENTERING THE MARKET AND DO NOT TREAT IMPULSIVELY
They will prevent you from going astray and giving way to euphoria or panic. This is much more reliable in the crypto-currency market where volatility is such. Thus, that without a well-defined trading plan, you are sure to run for your loss.
In addition, invest only money that you’re willing to lose and never ever, ever, ever, your savings precaution. Always bare in your mind why I strenghtened this part. Some of my colleagues really got bancrupt because of this bussiness.
- STAY SIMPLE IN YOUR STRATEGY
Whether it is foreign currency (forex) or stock, or even trading encrypted currencies, an effective strategy remains a simple strategy, which you can explain in a few sentences, which is based on concrete, specific and factual and not on beliefs or fanciful anticipations.