How To Trade Forex If You Have A Low Budget?

Trading in the financial markets is always accompanied by a certain amount of mystery simply because there is no exact formula for success. Think of markets as a vast ocean, and think of traders as surfers. Surfing requires talent, balance, patience, proper equipment, and the ability to be alert in the environment around you. Would you ride in water that hides a dangerous underwater current, or is teeming with sharks? Better not.

The attitude required when trading in the markets is no different than when surfing. When you mix good analysis and effective excitement, you will improve your success rate dramatically and like many other composite skills, good trading is achieved through a combination of talent and hard work, writes Investopedia.

We present you the four fulcrums of the structure, with which you can build a strategy that serves you well in all markets.

Point 1 – Approach

Before you start trading, get acquainted with the value of proper preparation. The first step is to combine your own goals and temperament with the instruments and markets with which and in which you feel confident.

For example, if you understand retail, then it is better to focus on trading in the shares of such traders than in oil futures, about which you know nothing. Start by evaluating the following three components:

Time frame

It shows which type of trade is right for your temperament. If you feel more comfortable using five-minute charts, it means that you prefer not to take overnight risks. On the other hand, choosing weekly charts shows convenience to this type of risk, as well as a willingness to see how some days do not go as you expected.

Also, decide for yourself whether you have the time and desire to sit in front of the monitor all day, or whether you prefer to do your research quietly and calmly over the weekend and then decide on the coming week – based on your analysis.

But remember only one thing – the ability to accumulate significant amounts of money in the markets takes time. Short-term “scalping” by definition means low income and high costs. In this case, you will need to trade more often.

Approach

Once you have chosen a time frame, find the right methodology. For example, some traders like to buy at support levels and sell at resistance, while others prefer to trade at breakouts. Others want to trade using indicators such as MACD and trend reversal points.

The next step is to test whether the chosen methodology works sustainably and gives you the desired advantage. If your system is reliable more than 50% of the time, you will benefit from it, albeit small. However, test several strategies until you find one that provides consistent positive results. Then stick to it and try it with a variety of tools and different time frames.

Market tools

Over time, you will find that some instruments are traded much more often than others. Low-liquidity tools make it very difficult to build a profitable system. Therefore, you need to test your system to determine if its “character” fits with different tools.

For example, if you trade the USD / JPY pair in the forex market, you may come across the fact that Fibonacci support and resistance levels are more reliable with this tool than with anyone else. Don’t forget to test a number of time frames to find the one that best suits your trading system.

Find your demo account for free at BenchMark Trader

Point 2 – Attitude

Attitude in trading means that you will insure yourself by adjusting your mind to adhere to four basic qualities:

Patience

Once you know what to expect from your system, be patient to wait for the price to reach those levels at which the system indicates an entry or exit point. However, if the market never reaches a certain entry level, move on to the next opportunity you have. There will always be another opportunity for a deal. In other words, don’t run after the last bus, just wait for the next one.

Discipline

This is the ability to be patient – to sit idle until the system reaches a point of action. Sometimes prices will not reach the level you expect, but that’s when you need to have the discipline to trust the system, not doubt it.

You will also face such a test when you have to listen to the system and act, and this will be especially necessary for stop orders.

Objectivity

Objectivity or “emotional bias” also depends on the reliability of your system or methodology. If you know that the system provides entry and exit levels that have a high security factor, then you will not succumb to emotions or allow yourself to be influenced by the opinion of polygamists who look at their levels, not yours.

In general, the system should be so reliable that you feel confident following its signals.

Realistic expectations

Although sometimes the market can make a much bigger move than expected, being realistic means that you will not invest $ 250 in your account and expect to earn $ 1,000 on each trade.

Short-term time frames provide fewer opportunities to make a profit than long-term ones, but the risk increases over time. Ultimately, it is a risk-return ratio.

Point 3 – Differentiation

Different instruments are traded differently according to who are the most important players and why they chose this particular instrument. For example, hedge funds are motivated by one reason and mutual funds by another. And large banks that trade on the spot market usually have different goals than traders who buy and sell futures contracts.

NOTE: It should NOT be assumed that the materials presented in Nuubie (the methods, the articles, the techniques, or indicators) will be profitable, or that they will not result in losses. Any reliance you place on such material is therefore strictly at your own risk.
Risk Warning: Trading in CFD’s on Leverage involves substantial risk of loss to your capital, they are complex products and are not for everyone. Between 74-89% of retail investors lose money when trading CFD’s. Trade with caution.