Four (4) steps to make money on Forex
Risk management
Account management
Proper analysis
Currency pair
Risk management:
Proper risk management will help reduce the amount of money you loose in forex, by also increasing your profits, this involves proper use of leverage, leverage as I like to say is a double edged sword, using a 1-1000 leverage on a $10 account can be very profitable as it can bring loss, overall your broker looses nothing, as you will be removed out of a trade once your account hits zero despite the leverage on the account. Proper risk management and use of leverage can make you very profitable on forex. Controlling losses: Traders need to learn how to control their losses by setting stop-loss orders, which automatically close a trade when it reaches a predetermined level of loss. This helps limit potential losses and protect capital. Determining the appropriate position size for each trade is crucial in risk management. Traders should calculate the position size based on their risk tolerance, account balance, and the specific trade setup. Understanding and assessing one's risk tolerance is an important part of risk management. Traders should be aware of their comfort level with taking risks and adjust their trading strategies accordingly.
Account management:
This involves your account size and your risk tolerance level, entering trade at the right time, setting up proper stop loss order, adjusting you lot size to fit your account size, will save you from loss just as much as it will bring you more profit. A 10 pip movement on a $10 account might not seem like much but that same movement on a $1000 account is huge profit on a 5.0 lot size. The amount of profit you make depends on your account size so trim down your phycology to handle and accommodate your account size to avoid greed.
Proper Analysis:
Proper analysis also involves considering the timing of trades and being aware of market conditions. Traders should avoid trading during periods of high volatility or when there are significant economic events that could impact currency prices, traders should continuously educate themselves about forex risk management strategies and stay updated on market trends. This helps them make informed decisions and adapt their risk management techniques as needed.
Currency Pair:
Try to stay on a currency pair you are comfortable with, try to enter a trade in between the opening and closing hours because the market is at its highest volatility during these times, and using a good analysis and risk management you stand a chance to make much profit.