Professional Forex platforms hold many features and tools designed especially for traders to take advantage of. This means that platforms such as XTrade Europe, offer you all the right tools to be able to trade on a more successful level. These tools are often ignored or overlooked by the inexperienced trader, who is eager to begin trading. Many new traders believe that they have already found the best possible trading system for entering positions.
Believing that if their trading system is good enough, all the other factors of proper trading like, risk management don’t need to be dealt with. That couldn’t be more wrong – when taking forex trading seriously, you must always count your risk management as top priority.
This will see the difference between managing to halt the drop and pull out without major loss or incurring a total loss. You will see why using stop orders as a form of risk management, is so important.
Placing a stop
Stops are absolutely critical for a number of reasons, but the need to place stops can really be boiled down to one simple reason – You will never be able to tell with 100% accuracy what the markets will do. Regardless of how strong the setup might be, or how much information might be pointing in the right direction – future prices are unknown to the market, and each trade holds its own amount of risk. Some traders become greedy or falling victim to their own ego, and wrongly convince themselves that they don’t need to place a stop while trading. Placing a stop on every trade that is made, prevents you from incurring major losses – in the possible event that you were incorrect in a trade strategy. This is what we call “Risk Management” – by placing a stop, you are in-fact minimizing the damage. You can easily learn how to place stops and educate yourself on proper trading habits, by watching informational videos on XTrade Europe website.
Time Frames matter
Generally speaking, higher profit ratios relative to risk are achieved with longer time frame charts such as the daily chart. It is usually best to avoid hourly charts if you are a novice. So as much as possible, seek out time frames where you can make great rewards relative to risk.
Daily charts represent a series of data points, where each data point is comprised of the price movement for a single day of trading. This chart type has been used time and time again by traders and typically applicable for swing or position trading.
Daily charts found on all professional trading platforms and apps such as the ones XTrade Europe have to offer; display all of the price movements for the period. This is a vital tool used by day traders to implement their short-term strategies. Online trading platforms offer forex which operates 24 hours a day. This is both a positive and a negative aspect of trading, as it can lead to traders taking on more than they can handle.
The 24hour trading markets are unique to Forex, as there is technically no stoppage of trading between one trading day and the next, as is seen in other markets. Forex traders live all around the world, and as a result, the lines between “Day and night” are often blurred. You will have to do your own homework and figure out which charts you should be following. This is especially simplified when using apps such as the app XTrade Europe has to offer.