Forex Tips
| The best lessons you learn in life are the ones taught to you from people with personal life experiences. The traders and workers at Forex Club would like you to take a moment to hear the tips we have learned after years of exposure to the markets. |
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| Take a Moment to Learn |
 Lydia Wong,
Head of New Accounts and Support Department The most valuable tip we offer new traders is to take time to learn the forex market and practice the trading platform. Many people walk away from the idea of forex trading because they feel it’s too difficult. The most difficult thing about forex is learning how to trade, but thanks to Forex Club’s great educational materials, we can teach you. Beginner traders should watch our online videos. Each video is about an hour long and has tons of information. Click here to watch the Forex Education Videos |
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| Watch Out For Market News |
 John Berzitskiy, Dealer
Nothing makes the market move more volatile than the release of news. Price has been known to jump 100 pips in just seconds after news is released, so keep an eye on the economic calendar. It’d be wise for any beginner trader to avoid trading around high impact news events. Click here to view our Forex Calendar |
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| Don’t Misuse Leverage |
 Peter Tatarnikov, Vice President
Beginner traders often only focus on the positive effects of leverage without fully realizing its repercussions. When you use high leverage, you’re putting the funds in your account at high risk. Leverage may intensify your profits, but it also intensifies your losses. Traders should avoid using higher leverages of 500:1 or 400:1. We use a maximum leverage of 100:1 because we feel like it’s a fair and safe amount. When using leverage, try to limit your trades so that you’re risking roughly 5% of your funds. For example, if your deposit was $100, you’ll have a buying power of $10,000 after leverage. This means that a safe trade amount would be to enter a position with 500 units of currency. |
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| Use Market Signals |
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John Berzitskiy, Dealer
Market Signals compare past trends with current ones to estimate where price will move. No Market Signal is correct all of the time. If there was a Market Signal that accurate, every trader would know about it, use it and be rich off it. With our trial period, you’ll get 15 signals a day for 15 days from Autochartist. Use these signals and learn from them! Click here for information about our Forex Market Signals |
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| Be Aware of SWAPs |
 Steven Lombardi – PR
You can find out more about SWAP charges by scrolling down this page. |
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| Don’t Start With All Your Money |
 Pavel Khizhnyak - Head of the Chinese Division
On the Forex market, how much money you put into your account doesn’t necessarily correlate with how well you do. If you risk a large amount, you can profit or lose a large amount. Be smart when deciding the amount you want to trade and don’t get too greedy. As a Chinese proverb says, “cross the river one stone at a time.” |
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| Don’t Look For The Smallest Spreads |
 Michael Felice Jr. – CFO
Low spreads are not necessarily good spreads. Low spreads often mean low execution, which can cost you big. |
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| Have Clear Entry and Exit Points |
 John P. Ieraci - Senior Account Manager
When you first start trading forex, you may not know too much about chart patterns or indicators. This is fine; everyone has to start somewhere. As you mature as a trader, learn more about the forex market. At Forex Club, we offer great educational videos and written lessons to better your trading techniques to help you minimize your losses and maximize your profits. After you learn more about the market, make sure you have a clear entry point. Enter a trade when you’re confident with the trend and have a clear exit strategy. |
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| Set a Limit of Daily Trades |
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John P. Ieraci - Senior Account Manager
The Fractal Indicator is used to see Highs and Lows within trends and should be paired up with the Alligator Indicator. Using the Fractal Indicator, traders shouldn’t close a buy position if the fractal is below the Alligator’s teeth and should not close a sell position if the fractal is higher than the Alligator’s teeth. |
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| Learn an Indicator |
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Steven Lombardi – PR
Indicators were created to help traders better understand what the market will do. As a beginner trader, the idea of using an indicator may seem very difficult, but this isn’t true. Don’t be afraid to learn how to apply indicators to your trading system. We offer great information to you about how to use and read indicators. |
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| Orders | ||||||||
| Before you enter a trade, have a realistic idea of where you’d like to place your stop loss and take profit orders. In order to have a good idea of where to place your orders, you must have a general idea of how much money you can make per pip. In other words, know how much money you will make and lose each time price moves one point up or down.
Here’s a chart to help you out:
It’s very important to have a general idea of how much money you can realistically make with a trade given the amount of currency you’re trading. We highly recommend that you trade with different amounts on your demo account to fully understand the opportunities available. |
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| Trade with the Trend |
| I come from a family of antique collectors. One thing my father taught me when we were sanding down old wooden knickknacks was to sand with the grain. I usually compare this idea of sanding with the grain to Forex trading.
With Forex trading, a trader must trade with the trend. In a recent webinar, the EURUSD was in a powerful uptrend. When asking the audience which way market would move, many thought the market was going to go down. Traders have an idea of what goes up must come down, or what goes down must come back up. While this is true and price does “correct itself” to reach previous levels, the market makes indications of these reversals prior to making reversals. When in a bullish market, go LONG or stay neutral. When in a bearish market, go SHORT or stay neutral. Also, don’t be afraid to buy a new high or sell a new low.  If you want to learn about chart patterns, which indicate if price will keep going in a trend or reverse, please visit our chart pattern page. |
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| Realize the Risk |
 Every dollar you place into a trade is at risk. The magic number that most professional traders swear by for opening a position is 2% to 5% of their trading balance for each trade. If you have an account of $500, your safest bet would be to trade 2% of that, or $10. With leverage, that equates to having a buying power of 1000 units of currency. If you’re not happy with the results you’ll get by trading 1000 units of currency (you’ll be seeing profits and losses of cents), you should start trading with more money in your account. |
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| The Risk to Reward Rule |
| When creating a personal trading system, you should ask yourself how much money you would like to make from a trade and stick to that amount. Different traders tend to follow a different set of rules, but they all follow the same “Risk to Reward Rule”. Using this rule, a trader will set a percentage of money that they are willing to risk and a percentage of money that they are willing to gain prior to entering a trade. For example; if you are willing to risk $100 or profit $200, your risk to reward ratio would be 1:2. Trader should avoid setting a rule where their risk to reward ratio is 1:1. This means try not to set stop loss and take profit limits to the same number. A risk to reward ratio of 1:2 is okay, although still risky. Many professional traders agree that 1:3 is a good risk to reward ration.  |
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