Making Use of Forex Trading Tips

Following forex trading tips seems like an easy way to make money. But one has to expect and embrace uncertainty and confusion even in this kind of trading.

Profiting from Forex Trading Tips

Forex trading tips are great, but one has to be careful even with the most reliable sources of such tips. Because volatility and unforeseen factors can ruin the timing of the expected market moves, and create all kinds of issues. The most common issue is misjudging the market, whereby a tip suggests that this or that currency pair will make a move in a specific direction, but there might be significant counter moves before that happens. This kind of unforeseen volatility can trigger stops very easily and result in big losses. So stop placement is important. The stops have to be large enough, most of the time, so as to tolerate such volatility. And in times of fragile markets, where the major trend could change, one has to use multiple trades and of different size, in the same direction. Those trades will vary in terms of risk tolerance, so that the large size trade will have a much tighter stop. Following the tips and treating them as solid forex signals is actually a bad idea, rather one has to keep an eye on their forex charts and question that tip, in terms of reliability and timing.

Which Forex Trading Tips Work Best

Forex trading tips which are loose in nature, and allow for some personal judgement and flexibility seem to work much better. Especially better than those tips which define small and fast price movements, and where the entry and exit price levels are strictly defined. As with all things in real life, the tighter your plan, the more likely you are to face something unpredictable and difficult to deal with. Trading is one of those things where ultra tight planning does not work! All you want to know from your trading tip is underlying market direction over some reasonable length of time. So that you have time to deal with open losing trades, and know which ones to close and which ones to keep or even add to. The global forex converter mechanism is peculiar and volatile, and it does strongly favour tips which focus over few days rather than few minutes or hours. It also favours the loose, flexible approach rather than exact entry and exit price levels. So trading tips which offer exact information, and attempt to capture 20 or 30 pips on a given trading day are usually tips based on momentum. Momentum is good, but all its indicators are lagging in nature and can be highly misleading. The reason why these tips are so tightly planned is because that’s what their audience demands! And even when these tips are right, the trader following them stands to make only 20 or 30 pips, which is not the best way to make serious money in the markets.