5 Ways to Make Money Trading Forex

5 Ways to Make Money Trading Forex

Making money trading Forex

It needs to be accepted that making money is hard no matter what one is doing. But nonetheless it is still possible to make money trading Forex. This said, a total of losses and wins over time may well end up as a loss and it is easy to lose money trading. Markets are risky.

1. Controlling losses

This involves judicious use of both hard and soft stop-losses. It also involves awareness of patterns. Knowing that a pair can wave around, moving up and down but not by very much and that trends end can help prevent taking multiple losing positions.

2. Taking advantage of liquidity

Trends are potentially a way to achieve a profitable trade. They can build before markets open and end in volatility around open. Trends can happen before other volatile times, such as market close on Friday and before a major news release.

The build up to volatility can provide a boost which helps build well structured trends, with a beginning, a middle with retracements and an end.

2. The risk of ranges

While ranges can seem like a way to profits, riding them up and down, they really can turn into something else like a trend or a calm market. However, sometime after a trend end a range building pattern may occur.

3. Getting out on news

News seems an attractive way to make money quickly. It can be. Getting on the right side of a major move can result in a clear, quick profit. But that profit can disappear as quickly as it came when the move oscillates (easy come, easy go, if ever this was true). So either the trader can exit automatically, or they can try and work out if the move can continue. This involves quick thinking when the candle pauses, if it does.

The real profits are in moves which keep going well after the first minute or so. These potential profits take place in an extremely risky environment it may be better to stay out of. But again, such moves do happen.

4. Market turns

This is where serious money potentially is. In a market turn all the trader needs to do is stay in it (assuming they got in) until an exit presents itself, and add to the position in retracements. The problem is getting in on them, that retracements can turn into reversals and that on longer term charts they are rare and in some long term market conditions they can be rare indeed.

However turns do happen, particularly in spot metals. In other Forex pairs it can be helpful to ask can a pair turn up or turn down, which may need fundamental analysis. It can be helpful to check the long term chart to see if the pair has made turns and what kind of turns it has made.

While it may be useful to examine charts and see what happened around previous market turns, it cannot be expected that these conditions will necessarily be repeated in the future.

It is important to bear in mind that the clear patterns evident on a chart are past events which at the time were not clear at all, and could have gone various ways.

5. Is Forex trading the right or only market

It is possible to be on a road to nowhere in Forex attempting to ride the waves in short term trades. So maybe an understanding of charting patterns gleaned from Forex can help turn this into a better road, in another market, which can itself help with Forex trading.

While the potential is there in Forex for profit in directional patterns appearing day in day out, looking at what else is there can help illuminate why losses happen in Forex. In other kinds of trading though those quieter moves and even volatile moves can potentially be useful, for example in options. But again there is probably nothing which will ensure profits rather than losses.

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