Forex trading is a potential marketplace to earn a good amount of money. A trader can indeed become rich if he successfully trades in the platform. Forex is becoming popular day by day because of several reasons. It is easy to access because you will need only a device (a PC or a smartphone) and internet access to enter.

Remember that one can truly become rich from this trading industry, and at the same time, one can easily lose hundreds of dollars from that same industry. It depends on the skills and knowledge that the individual has acquired. To be a professional one, you have to work a lot harder and should gather concrete knowledge. A beginner can consult a mentor or can attend the seminars to improve his skills.

How to become rich by Forex trading

A novice can follow these tips to become a prosperous trader –

1.      Risk or money management techniques

To increase wealth, first of all, a newbie should focus on protecting his capital at any cost. For this, adopting a money management plan is necessary. The risk management trick will always help a novice from making any wrong step. In addition to this, the plan will help an investor during a massive crash in the currency’s price. Study about the price movement at Saxo and you will become more efficient in managing the risk factors.

The fluctuations of the market are determined by so many external factors, and nobody has any control over them. These factors include – inflation, interest rate, economic recession, unstable politics inside a nation, and so on. Each of these factors is related to others. That’s why experts say that no matter what happens in the FX industry and the chart, when a beginner enters into the trade, he should adopt the money management plan.

Some examples of money management plans are – stop-loss limit, the risk to reward ratio, smaller position or volume size (also called trade size), take-profit limit, and so on. By checking these issues, you can protect your investment during bad times.

2.      Observe the types of markets and trends

Once you adopt the plans to handle the possible challenges of the market, it is time to observe the market and its pattern. Remember that there are three types of the FX chart pattern, and they are –

  1. Uptrend: When the price of a specific currency increases, the graph starts rising. It is called the upward or bullish movement or uptrend.
  2. Downtrend: When the price of that particular currency decreases, the graph begins falling. It is called downward or bearish movement or downtrend.
  3. No trend: It is a flat market because there is no significant movement of the currency. This market is also called a ranging or consolidated market.

These are the three common patterns in the chart. A beginner should also know about the point to enter the trades and the point to sell the financial instrument or exit the trades.

  1. Resistance: Resistance is the peak value of the financial instrument, from where the price starts falling down. Experts say that this is the ideal point to sell the currency.
  2. Support: Support is the bottom value of that financial instrument, from where the value starts moving up. Forex experts opine that one should buy the financial instrument if he can identify this spot.

3.      Choose the broker carefully

Brokers play a crucial role in developing a career in this trading platform. While choosing a broker, make sure that you have checked his profile, previous history, offers, spread or commission rate, feedback, services, charges, etc. Professionals always advise that the novice choose such a broker whose spread fees are less and make the deposition and transaction process hassle-free.

These are the three major tricks to become wealthy in the CFD industry. Every beginner can follow these tips. Since the chart is always changing, they should be careful about entering the trades frequently.

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