The Most Practical Trading Methods for Beginner Forex Profits

The most practical trading method for Forex beginners to make profits

People often ask me why so many people lose money in the Forex market. It is because they have not learned how to make a profit. Why some people are still losing money after speculating in Forex for several years is because they still haven't found a way to make a profit.

Is it that complicated to make profits in the Forex market? It takes several years to learn it. Then why can novices often make a fortune. In fact, one week is enough to learn the profitable method. The key is that this method must be correct.

What is the correct way to speculate in Forex? Then you have to ask people who can make profits in the Forex market. Remember, you must read what people who can make profits say. Only people who make profits are qualified to speak, and only what people who make profits say is useful to you. 99% of those long speeches written with gorgeous words are of no use to you, and only 1% is useful to you. Can you find out the 1% that is useful to you? If you can't, I still advise you not to read it well.

The crux of the problem is here. There are always very few things that are useful to us, and there are so many things that are not useful to us. So what things are useful to us! I didn’t know at first, otherwise I wouldn’t have taken so many detours. It all depends on my own understanding. We should read carefully the things that are useful to us and double the collection of fine works. There are many people on various Forex forums who selflessly bring out their good stuff. I am very grateful. I have also learned a lot from them. I also have the obligation to write something for everyone to discuss. There are many people who are studying very hard, and I have also studied very hard, studying technical indicators, studying wave theory, and being superstitious about operation suggestions. Here are a few points to share with you, I hope it will be helpful to you.

1. Follow the trend

Following the trend is the most direct manifestation of the laws of market movement, which is the trend. The only way to treat trends correctly is to operate in accordance with the trend. This is the number one magic weapon for making profits and even long-term survival in the speculative market.

Stanley Crowe, a famous investment expert in the United States, once said: "The most profitable and most reassuring operations are always when I follow the general trend of the time. The most painful and stressful operations are always when I establish or hold on to lose money against the trend." When novices learn to trade, they must understand that establishing the direction of price movement is of extremely important value to the overall success or failure of the transaction. Determine the direction through objective analysis, then jump into the trend, stay in it, and drift with it. As long as the trend continues to be beneficial to you, you must hold on to your position to reap profits. Learn to trade in the direction of the trend, and in this process of ups and downs with the trend, achieve excellent operating results through risk management. This is the essence of following the trend.

For novices, the recommended analysis tool is the moving average. As a concise and clear trend indicator, the moving average has a good effect in following the trend, so it has won the favor of practical experts. For specific applications, please refer to Granville's Eight Rules of Moving Average and Triple Filter Investment Theory.

2. Grasp the big and let go the small

Novices who have just started trading should pay attention to cultivating systematic trading thinking at the beginning, regardless of temporary gains and losses, but strive for long-term stable overall gains. To do this, you must learn to choose among numerous market opportunities, seize big opportunities and give up small opportunities. Therefore, the two core factors for evaluating opportunities, namely the risk-benefit ratio and the success rate, must be firmly grasped. This is the second magic weapon for novices to make money.

The so-called risk-benefit ratio, that is, the ratio of the potential risk loss and the expected return of a transaction, is the risk-benefit ratio. For example, we plan to execute a transaction. After analysis, if our estimated potential loss value is 100 points and the profit target is 300 points, then the risk-benefit ratio of this transaction is 1: 3.

The so-called success rate refers to the probability of a successful transaction and profit. For example, in 10 transactions, the number of profits is 5, and the success rate is 50%.

Suppose our risk-benefit ratio is 100 points: 300 points, and the success rate is 70%. This means that when we make 10 transactions, each time we make a profit of 300 points and a loss of 100 points, then the overall profit will be 300x7-100x3=1800 points.

Suppose our risk-benefit ratio is 300 points: 100 points, the success rate is 90%, each loss is 300 points, and each profit is 100 points, then in 10 transactions, the overall profit will be 100x9-300x1=600 points.

Considering these two core factors, the smaller the risk-benefit ratio and the higher the success rate, the transaction we should strive to pursue.

3. Loss limit

Limit losses, preserve principal, and under this premise, hold positions with profit potential for as long as possible and let profits grow. This is the third magic weapon for making money through speculation.

In the trading world, there is no "Holy Grail" that makes all predictions 100% correct. All analysis and predictions are possible. Therefore, in response to market uncertainty, we must take measures, such as using stop-loss orders to control risks. Imagine that the crocodile lurking in the mud bites your foot. If you don't bear the pain and give up the foot, the crocodile will swallow your whole body. Risks accompany traders closely, so novices must have a clear understanding of risks. After setting a stop loss, traders will have a clear and quantitative understanding of the limit of loss, which is conducive to maintaining a stable trading psychology.

While limiting losses, you must learn to make up for losses caused by mistakes by holding on to profits for the long term. Only by holding on for a long time can you make big money, and only by making big money can you make up for the losses caused by a large number of mistakes and make a surplus. These surpluses are the final trading profits.

Investors who can't stop losses will definitely lose money, and investors who can only stop losses will definitely lose money. Only investors who can stop losses and make money can taste the long-term making money. >>Recommendation: How to buy better than sell better in trading?