One of the best tools you may want to use to make profitable trades is trailing stop. Trailing stop is basically a mechanism allowing you to automatically set stop limits as the market moves. Trailing stops can be set in different intervals; if you set your trailing stop to 15, your stop-loss will be moved whenever the market moves 15 pips positively. Trailing stops will stay in place is the market moves negatively, so you can secure profits as the market move. The only catch for using trailing stops is that you need to keep your trading platform on throughout the process.

Trailing stops can be used as a powerful tool indeed. Imagine predicting the market to move a lot of pips upwards; being able to set a trailing stop on your position will enable you to secure portions of the profit as the market moves higher to the target profit. You are also protecting yourself from unexpected rebounds and market turns, thus making your trades a lot more profitable in general. Learn to use trailing stops effectively and apply it to your trades to increase your profitability.

There are several indicators that can be used to read trends. Using Moving Average (MA), RSI, Moving Average Convergence/Divergence (MACD), and several other technical indicators can help you spot and read trends although sometimes reading trends may be a bit more complicated. The simplest way is to start with different MA with different parameters — you can set the parameters to your need — and add RSI or MACD to confirm the overall trend.

However, trends may not be as easy to spot as we all hope for in certain conditions. There may be too much short-term movements that may cause spotting trends a bit more difficult to do. When you face this kind of situation, especially when your indicators are showing erratic signals that are hard to follow, switch to longer timeframe and try to discover the market trend on different and longer scale. If you are trading on a 15-minute chart, switch to 30-minute, 1-hour, or even 4-hour chart to try to read current trend.

Remember that practice make perfect. Develop your own trend-spotting strategy and practice reading trends on different charts and time frame to improve it. You will be able to use it to your benefits, and it will be easier for you to make profitable trades in the future.

I thought forex trading is profitable? How come people are losing money? The main reason why 90% of new traders lost their money almost instantly is the lack of proper mentality and knowledge. You may be aware of all forex trading theories out there, but if you have never trade real money you will feel an enormous pressure that will cloud your judgments as soon as you login to your account. No need to worry because this is perfectly normal, and you can overcome the pressure with some practice.

I always advice people to use their real account to practice, but trade small amounts to reduce the risks. The amount of emotional tension produced by trading real account and risking real money cannot be found in practices with demo account. By practicing with real account, doing small and calculated trades to get used to the condition, you will be able to achieve the needed level of concentration and calmness needed to trade forex successfully.

I used to be one of those traders with no money management strategy I mentioned earlier. I juggle around with profits and risks without knowing how I can properly manage them to my advantages. Moving from 30+ pips profit to -40 pips loss in a matter of hours is just too common for me. I finally stop and actually think about proper money management when I start to feel that forex trading is too much of an emotional rollercoaster; well, it shouldn’t!

That was when I discovered the 2% rule, a very simple forex money management strategy that can help every trader maintain a solid risk and profit management for their trades. The only key point of this rule is to never risk more than 2% of your initial capital. If you start with $1,000, you should only risk $20 on a single trade and nothing more.

This simple rule actually has a lot of benefits. If you limit your risks to 2%, the amount of emotional strain of forex trading can be reduced substantially. You can also quickly recover from a bad trade because the amount you lose is just 2% of your initial capital.

There is a certain degree of ‘gamble’ in trading forex, but it is nothing like pure gambling such as the one you find at casinos. There is more than enough information you can use to read the market and predict its movements, and making trades blindly is something completely unnecessary.

You can start reading available information using several technical indicators available in your trading platform. Use simple indicators such as Moving Average and RSI with simple settings to help you determine current trend and predict future movements. Making profitable trades using only these two very simple indicators is nothing impossible, and taking the time to learn and understand them will be well worth it. Once you master the technical indicator combinations you are using, learn about fundamental analyses and improve your trading experiences to a new level. Remember, the best way to go is to trade — with calculations — and not to gamble.

The key to successful forex trading is continuous learning. There are literally hundreds of things you can learn about forex trading and the only way you can stay profitable is by mastering aspects of the trade. There are a lot of things you can do when you are preparing yourself to trade foreign exchange, but learning about theories as well as practical strategies will enables you to trade forex and minimize your losses with a solid and effective trading plan.

You will also find that learning about technical and fundamental analyses can seriously help you construct your own trading strategies. Being able to formulate your own trading plans and strategies is definitely important; it may take time and you may try to follow other’s existing trading strategy at first, but you should always aim at inventing your own personal trading plan because it will suit you and your trading style best. You will eventually be profitable because you know exactly what to do in different situations.

Preparing yourself emotionally before trading can also be achieved easily when you know exactly what you are doing. You can trade forex and make more money than you can imagine in no time at all.