Featured Image Caption: Forex Trading Tips
With every new year comes a new set of resolutions, and if yours is to enhance your trading skills, you’ve found yourself at the right place at the right time. The markets are particularly interesting at the moment, with the advent of the Coronavirus vaccine and its rollout across many countries, as well as the political changes which have occurred around the world. These are factors which can influence the stock market and create volatility in prices.
For example, factors like President Joe Biden being sworn in, and Brexit taking place, are bound to somehow impact the foreign exchange market, particularly the EUR/USD currency trading pair. This has the makings of a fascinating year for the markets, full of highs and lows across the board for those who are trading. These days, it’s easy to become overloaded with information if you’re doing a search for trading tips, so we’ve put together five of our top trading tips for 2021, to help you. Before you invest in forex, ETF, cryptos with app as CFDs, have a read and start with a fresh outlook. Let’s get started.
1. Make sure your broker is reliable
This may seem like an obvious statement to make, but reliability is not just about which broker is the most well-known. Reliability also centres on whether the broker is regulated. Why is being regulated so important? A broker that is regulated is registered with an authority in the financial space who can hold that broker to high standards of quality and conduct and provide both the broker and client with a kind of “insurance” to ensure both their interests are considered. How do you find a regulated broker? It’s quite simple, you can conduct a regulated broker review to find a broker who is registered with an authority, and you can check their regulation details thereafter. It’s important for traders to have this backstop, as they’re entrusting their funds with a broker, and they need to feel comfortable and secure with said broker.
2. Go mobile
It’s the digital age and everything is at our fingertips, so why not have your trading account at your fingertips too? This is an important part of trading in 2021, because the days of trading only at a computer are long gone. Sure, we’re spending more time at home, but once lockdowns diminish and we find ourselves outside more, we’re bound to spend as much time outdoors as possible. Now is the time for trading apps to shine, as today’s technology has created some pretty sleek trading apps. Nowadays you can invest in forex, ETF, cryptos with app platforms that are kitted out with tons of features including the ability to keep up to date on the latest market news, easily open, close, and monitor deals, and even access educational features. This opens up a whole new world for traders as you can now keep your finger on the pulse of the latest news and market developments in real-time and take advantage of market opportunities as they occur.
3. Find a strategy
Traders often use various strategies that help them decide the direction they plan to trade. It’s a good idea to pick a strategy or strategies that you’re familiar with—and if you’re not familiar with any strategies, then start by doing your homework. Find a strategy that plays into your skills and stick with it to find out if it works for you. For example, if you’re not qualified in economics, and data isn’t your strong suit, then a more technical-based strategy that is heavy on data and calculations may not be right for you. On the other hand, there are also strategies that rely on more fundamental information, such as news alerts and economic events, that may be more accessible to you.
Fundamental analysis and technical analysis are two commonly used strategies by traders to get the best of both worlds, as fundamental analysis focuses on analysing the factors that influence an instrument, and technical analysis focuses on trying to predict future trends by analysing past instrument data. (Note: when we say ‘predict’ that by no means guarantees technical analysis results. Past performance is never an indicator of future performance, and trading strategies are only designed to give you more insight into your chosen trading instrument). Ultimately, it’s completely up to you to pick the strategies that you’re most comfortable with.
4. Use the right tools
There are a variety of trading tools at your disposal nowadays, and it’s important to choose the right ones for the instruments you’re trading. An Economic Calendar can be useful for many different instruments, helping traders keep track of the latest news and market analysis that could impact the price of various instruments, while price indicators and trading signals can help identify trading opportunities as they happen. Before beginning your trading journey, it’s a good idea to acquaint yourself with all the tools available on your chosen platform so you know which to engage and when. Know about the best stock screener tool that helps investors and traders.
5. Choose the right instruments
What do we mean when we say “the right instruments?” We mean the right instruments for you, and this is different for everyone. It’s important to pick instruments that you’re either interested in, have some knowledge on already, or are more likely to keep tabs on. Preferably all three of these factors. The more you know about the instruments you trade, the more informed decisions you’ll be able to make.
For example, if your portfolio focuses primarily on foreign currency trading, then you’ll most likely want to know about top currency pairs like EUR/USD and what can influence their price movements. Furthermore, a performance chart will be provided with each instrument, such as with EUR/USD, that will allow you to view past performance by month, week, day, even minutes, so you’ll always have the opportunity to stay on top of your chosen instruments.
The bottom line
Before you invest in forex, ETF, cryptos with app as CFDs, be sure to heed these five tips—especially when it comes down to conducting a regulated broker review. We hope these tips help you get on track towards the next chapter of your trading journey.