Online trading

Tactics to Maximize Online Trading Profits

So many traders focus on protecting their capital accounts and avoiding losses that they forget to employ tactics that can maximize returns on their initial investments. There are, in fact, all sorts of strategies for making profits on stocks, forex, commodities and other asset classes. Particularly for forex enthusiasts, the recent economic turmoil has opened up unique opportunities to earn strong returns. This is partly because international forex markets are somewhat insulated from the vicissitudes of the rollercoaster stock market.

Forex traders buy and sell, short or long, with as much ease and confidence. Anyone who stakes money in a stock or commodity account does not have such a luxury unless they subject their capital to strict margin requirements before shorting a stock or commodity. similar asset. What specific techniques can serve modern forex and most other varieties of traders during the unpredictable years of the early 2020s? The following approaches apply more to forex markets than others, but the general concepts can work in several areas.

Follow heatmaps

Heatmaps are relatively new tools compared to the dozens of other strategies, methods, and software products available to modern account holders. For those buying and selling foreign currency pairs, heat mapping can turn an otherwise complex task into a relatively simple one. The heat charts show, based on a color-coded system, which currencies are rising in value and which are weakening. All it takes is a quick glance at the charted pairs to see their relative power to each other. Daytraders rely on technique to make quick decisions on pairs that are moving fast in a certain direction.

Use tested signal providers

For those new to the FX arena, signaling services can serve as a temporary decision-making tool. There are hundreds of providers online, most of which are untested and of little value. However, several are quite good, publish their trading history and offer at least one free signal per day. To access their premium services, which typically deliver up to 10 signals per day, be prepared to pay a monthly subscription. One way to diversify is to use multiple providers and combine their signal calls into a strategy that suits your needs. Many people prefer to trade only the major pairs and therefore look for signal services that only focus on these currencies. Others prefer to view more than a dozen signals per day and choose those that seem, based on additional analysis, to have the best chance of success.

Use a respected platform

The first rule of getting the most out of an investment in a trading account is to work with a respected brokerage firm that offers a choice of simple and complex platforms. FX enthusiasts should look for a reputable broker that has the best forex trading platform on the market. Regardless of your opinion of the options available, don’t put your capital at risk by dealing with brokers who have no track record, offer substandard platforms, or have little experience in the industry.

Consider the big picture

Whether you are a day trader, scalper, swing or long-term trading practitioner, understanding the general direction of the overall market or asset class you are buying and selling is imperative. In FX, there are all kinds of great online resources that offer trend analysis for major and minor currency pairs. These types of studies usually reveal an upward or downward trendline, information that can be extremely helpful in giving an idea of ​​a given currency.

Use stops

Stoplosses are specific numerical portions of a trade order that instruct the brokerage system to remove you from a trade when the price reaches a certain point. If you buy the EURUSD pair (which measures the number of dollars per euro), a descending chart line means that the the euro is weakening. Someone could buy at 1.10 and set a stop-loss point at 1.00. Then, if the Euro falls to the 1.00 level, the trade will automatically close, protecting the holder from further deterioration of their position. Stops play a unique role not only in FX, but also in stocks and most other types of trades.

So how can stops help maximize profits if they only prevent bigger losses? The trick is to use a variation called trailing stops. Account holders can configure their software to automatically move the stop as the price increases. In the example above, if the EURUSD advanced to 1.25, a trailing stop loss order would move the stop to 1.15 points, locking in some of the gains. Tracking is an effective way to protect against losses and simultaneously retain some of the gains.