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Want to invest in forex? Here are top 5 tips from expert
There is good news for all those who have traded in financial markets earlier or are thinking of trading ahead, as Nitish Sharma, Global CEO, TP Gobal FX has some important tips for them.
Forex Trading Tips Today: What is Forex? Well, it involves the process of buying and selling in different currencies. For instance, travelling abroad and exchanging the Indian rupee into that country's currency. Even exchanging of Indian rupee into US dollar or pound or any other currency is involved in Forex.
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There is good news for all those who have traded in financial markets earlier or are thinking of trading ahead, as Nitish Sharma, Global CEO, TP Gobal FX has some important tips for them. They are as follows:
1) Trade, don’t gamble!
Sharma points out that there is an old notion about financial markets that it is gambling more often markets are called as 'SATTA BAZAR'. He clarifies that trading involves buying and selling just like any other business just that the product here is financial instruments. He writes, "Take trading as a Business, just as you would first learn the tricks and trade of your business before investing money, same way learn how to read the charts and financial data to manage your risk effectively."
2) Always use Stop Losses (SL)
Sharma makes one ponder on the question, "Will you drive a car or bike without breaks? You won’t, as if you do there is a risk to your life." He then explains that in the same way, if one trades without knowing when one is supposed to book the losses one is risking one's hard-earned money.
3) Do not put all your eggs in one basket
The Global CEO of TP Gobal FX remembers the old saying of not putting one's eggs in one basket as one can lose all the eggs in one go. He points out ,Similarly, do not invest all your money in 1 trade. We are humans, we will make mistakes in trading. I always suggest people to not risk more than 3% of their capital in 1 trade, this way even if you go wrong 5 times, u have lost only 15% and it’s easier to recover 15% rather than recovering 85%."
4) Do not enter in a moving candle/bar/line (Candle Stick Method)
Since one will not try to jump out of a moving train, likewise, Sharma points out that when one is analyzing the charts, wait for the candle/bar/line to end for the time period one have chosen and then take a decision to enter or exit the markets.
5) Attitude and emotions
Sharma feels, "We are emotional beings and emotions rule us. You need to understand how you feel when you make a loss and how you feel when you make profits. You need to be positive if you had to book loss in your previous trade." He further added that one has to just be hungry to learn and adapt to the ever-changing world of Forex Trading. The real trading starts the day one starts trading. So, Sharma feels that one should understand one's emotions and work on controlling them.
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