Forex trading tactics
Like any other business, trading on the stock exchange must have some kind of action plan, which will spell out all the
main points of trading; they serve as the basis for profitable trading and prevent you from losing your deposit.
Forex tactics are an integral part of the trading strategy used, and if the strategy covers only general aspects, then the tactics are focused on the little things, although there are no little things when trading on Forex.
In our case, this discipline includes all the preparatory aspects of trading, and also regulates the main indicators of operations.
This includes - calculation of the optimal size of transactions, the maximum amount of losses and profits upon reaching which the order will be closed, methods of fixing profits.
1. Calculation of the transaction volume - using any of the forex strategies, you must decide what amount in relation to your own deposit you will trade, that is, choose the optimal lot size.
Having some experience of trading in the foreign exchange market, I would like to note that the following pattern is usually observed - the larger the trader’s deposit, the less leverage he uses, thereby significantly increasing the time range of trading.
At first, like most novice players, I tried to trade in large volumes, as a result of which I was forced to close trades at the first sign of a correction.
After unsuccessful attempts to make a profit, I lowered this ratio; now, with a deposit of $3,000, trading is carried out with a volume of only 0.1 lots.
Yes, the profit from one transaction decreased significantly, but unprofitable transactions also practically disappeared, which made it possible to obtain a stable profit at the end of the month in the amount of 20%. When trading small amounts, you can use another approach, a maximum leverage of 1:100 or 1:200 and a permanent withdrawal of the profit received, while maintaining a certain amount of funds in the account.
Whichever strategy you use, first decide on the volume of operations to be performed.
2. Tactics for closing positions - before starting trading, you should set the level upon reaching which you will close the transaction, especially for unprofitable orders.
Thus, a profitable position should be held as long as possible. With careful trading, this level ranges from 2 to 5 percent, with scalping no more than 20%.
This is exactly the psychological factor that will not allow you to lose your entire deposit; this value serves as the basis for setting a stop loss order.
3. Tactics for taking profits in Forex - ways to close profitable positions.
You can close your profitable positions in the following ways - manually, with a take profit order, moving the stop loss to the break-even zone, or setting a trailing stop. The choice of option depends on the way you view trading; for example, setting a trailing stop requires a trader’s terminal to be constantly running, while in manual mode you must always control the transaction.
The Forex tactics you choose should be suitable for the trading strategy you are using; only in this case, there is a chance to get the maximum financial result.