Forex FAQ and Tips

Forex Automatic Trading Tips

Forex Automatic Tips

Forex Automatic Trading Tips

Five (5) Trading Tips for every Forex trader. Starting by identify trading styles and categories. Afterwards, tips for choosing platforms, Forex brokers and trading signals. Ending with trading tips regarding the crucial issue of Managing your Forex Portfolio (Forex Money Management).

Forex Tip-1)

Define your Forex Trading Style

Trading styles are characterized mainly by two factors:

(i) Trading Time Frame

In general, the length of a Time Frame defines the expected frequency of order execution. The higher the frequency of trading the higher the transactional cost of a portfolio.

(ii) The Risk acceptance of Each Portfolio

Risk acceptance should be defined according to the level of experience of each individual trader. Semi-advanced and beginners Forex traders should be much more risk-averse than advanced and professional traders.

Categories of Trading Styles According to Chosen Time Frame and Risk Acceptance

By combing (i) and (ii), we may distinguish four (4) major categories of trading styles and their main characteristics:

(a) Experienced Traders –Trading Intraday

High Risk Acceptance / Many Trades per Day / High Rate of Leverage

(b) Experienced Traders -Long Time Frame

Low Risk Acceptance / A Few Trades per Month / Low Rate of Leverage

(c) Semi-Advanced and Beginners –Trading Intraday

High Risk Acceptance / Many Trades per Day / High Rate of Leverage

(d) Semi-Advanced and Beginners -Long Time Frame

Low Risk Acceptance / A Few Trades per Month / Low Rate of Leverage

Basic Trading Tip:

From these 4 trading style categories, it is better to avoid category (c). Semi-Advanced and beginners Forex Traders who are executing many trades per day are usually losing money in the long-run. Intraday trading can only prove profitable for experienced and professional traders. The rest should either choose to trade the mid-term or subscribe to a paid Forex signaling service, that they consider as reliable.

Forex Tip-2)

Choosing Trading Platform

Forex traders may choose today from a great variety of trading platforms (desktop and mobile platforms). The Forex industry’s standard is certainly MetaTrader4. The new version of MetaTrader (MT5) is also gaining ground nowadays, as more brokers choose adapt it. MetaTrader is the ideal platform for advanced and professional traders especially for those that are willing to implement an automated strategy by using an Expert Advisor. Other Web-Based Platforms can fit the needs only of Beginners and Semi-Advanced Forex traders. In any case Web-Based Trading Platforms are not recommended for Day-Traders.

In Forex Automatic there is a wide section for Forex Platforms:

» Review and Compare Popular Forex Platforms

Forex Tip-3)

Choosing the Right Forex Broker

Generally speaking, the best way to trade Forex is by choosing an ECN or a STP Forex Broker and take advantage of a Forex Trading Rebate. ECN and STP Forex Brokers offer the best trading conditions (usually tight spreads, usually fast execution, usually no price manipulation).

» Compare Forex Brokers at Forex Automatic

» Start Trading using a Forex Rebate

Profiling the Ideal Forex Broker & The Rating Formula

The profile of the ideal Forex Broker combines 4 main trading aspects:

(i) Low Trading Cost

(ii) Safety of Money

(iii) Effective Technology

(iv) Wide Variety of Trading Options

By dividing these 4 important factors into dozens of sub-factors, and by giving the sub-factors a certain weight, the Rating Brokers Formula was born. The Rating Formula is now on version 4, which is designed to rate Forex Brokers

» Read more about the latest Forex Rating Formula at TradingCenter.org

» Ratings using Rating Formula v4.0 at FxPros.net

There is also the Rating Formula v3.5 for Rating Binary Option Brokers.

» Read more about the latest Binary Option Rating Formula at Binaryvalue.com

Forex Tip-4)

Choosing Forex Signaling Service / Forex Robot

Forex Trading Signals are generated by external sources. Actually trading signals are trading propositions that are delivered usually to subscribers via SMS and email alerts. Other strategies may concern the use of Automated Forex Signals or even Expert Advisors (Forex Robots). ForexAutomatic includes a wide section of reviews and comparisons regarding popular Forex Signaling Services and Forex Robots. 

» Compare Popular Signal Providers | » Compare Popular Forex Robots

In general what defines a good signaling service (manual or automated) is past performance. Avoid Forex signaling services or Forex Robots that are relative new services and can not provide you with facts and figures about their historic performance so far.

Automatic Trading Tips

Forex Tip-5)

Basic Rules for Effective Money Management

When you are ready to trade, there is something never to forget. Your future Forex trading success will be determined:

(i) 50% by your accumulated trading experience and trading talent,

(ii) 50% by your ability to manage wisely your portfolio. Actually money-management is far more important than anything else. If you can not manage your portfolio wisely, you are probably going to loose money in the near future.

Basic Tips for Wise Money Management

Tip-(i) Diversificate always your portfolio

Do not open positions that count more than 10% of your overall portfolio value.

Tip-(ii) Calculate your Trading Cost Accurately

Calculate your trading cost accurately before executing any trades (spread and commissions charges, curry-trade charges).

Tip-(iii) Trade in Larger Time Frames

Larger time frames will protect you from unexpected market conditions (news, market noise etc).

Tip-(iv) Use Low Rate of Leverage

High leverage does not just incorporate higher level of trading risk, it means also higher trading cost. When you leverage your funds 500:1 you accept a very high risk but you pay also extremely high spreads and / or commissions but also higher swap charges (curry trades). There is no point to leverage your funds more than 100:1. Wise traders use basically leveraging their funds between 20:1 and 50:1.

Tip-(v) Place Always a Stop-Loss Order to all your Trades

Whatever time frame you choose to trade you must always place stop-loss orders. Market conditions may change at anytime. Placing a stop-loss order cost you nothing while it can really save your portfolio in the long-run.

Tip-(vi) Run your Profits and Cut your Losses

When a trade proves profitable, don’t get anxious to close it. You may change your stop loss to higher levels to ensure no loss but meanwhile it is better to run your profits. On the other hand, if a trade is loosing money do not increase your position. Instead if the price reaches the stop-loss, cut your losses and move your thinking to new trading opportunities.

Tip-(vii) Filter your Daily Trading Activity with Rules

Impose some general rules to minimize your risk. For example if you are a Day-Trader, stop trading if one day you have lost 5% of the value of your portfolio or you have suffered three losing trades in a row.

 

Forex Automatic Trading Tips

ForexAutomatic.com


Read More: ► Get Started | ► Forex Heat Map | ► Money Management | ► Forex Scalping Guide

You are here: Home Fx Tips