How Can Traders Identify Trends in the Forex Market?

The process of identifying trends in the market is a highly crucial activity as it has high relevance in technical trading. Technical Indicators are metrics that are used to indicate the trends and directions of the market based on the past patterns. Their usage can help traders extrapolate the trends and forecast future movements. For traders who are engaging in forex trading in Nepal, using these trends indicators can help them trade without depending on market news.

These Are The Significant Trend Indicators:

Highs And Lows

Following the highs and lows of a trade can help forex traders identify whether their trends are gaining in terms of momentum or losing. Analyzing the candles can help traders understand the points of entry and exit and discern the price point where a trade may go up.

Moving Averages

The moving average convergence divergence (MACD) is an indicator used to signal the trend and momentum behind a security. It comprises two exponential moving averages (EMA), each covering two different time periods, which help to measure momentum in the security. This is valid for short-term forex trading.

The ADX Indicator

ADX, short for Average Directional Index, is a trend indicator used to measure the strength and momentum of an existing trend. It indicates the momentum and directional strength of a trend. The value of the indicator defines its upper trend or the lower trend. 

Line Graph Method

Line graph is a very simple, yet practical tool that allows the forex trader to look at the bigger picture of the chart. The line graph helps traders identify the overall trend along with specific details such as price action and number of pips gained. 

Technical indicators such as the ones mentioned above are useful in identifying the trends and the direction of the market. They help traders gain insight into the supply and demand of securities and use the information to place informed positions. For novice traders who are still getting the hang of such indicators, partnering with reputed forex brokers in Nepal such as WesternFX can be helpful in the long run.

Ways to Develop a Successful Trading Plan

If one has been a part of the forex trading scene in Nepal for some time, then it is likely that they would have been told that success in online trading is dependent on the plan. While this statement is valid, only part of it holds true. Not all plans can be successful. If that wasn’t the case, then hundreds of forex traders would turn millionaires each year. So, where do these plans fall short? This article discusses how traders can develop plans that ensure a high chance of success.

There are a few steps that traders need to follow if they intend to make successful plans.

Initial Questions to Answer

Traders should first begin their planning by answering the basic questions behind their activity. These questions should ideally help them identify key components of their trade activity such as initial investment, style, profit targets, choice of broker, etc.

Weighing the Risks

This is the second important consideration for traders to plan. When devising a forex trading plan, traders must also consider the risks they can face and prepare for the same accordingly. This is important as safeguarding the investment should be awarded the highest priority and any risks that can impact the investment should be considered in the plan.

Writing the Trading Plan

After understanding the various tenets of trading, forex traders should document their plan so that they can refer to it during the process. Information about which pairs to trade, the maximum risk, permissible loss limits, entry and exit strategy, position size, etc., should be included. They should include their risk management tools such as Stop-Loss and Trailing stops into the plans.

Reviewing the Plan

After writing of the plan, the next logical step is to review it. This is because not all trading plans are fool proof. They may have certain discrepancies in them. It is vital to test the trading plan on a demo trading account for some time and review the results. This can help traders iron out flaws in their plans.

Following the aforementioned steps can help traders develop an elegant trading plan that guarantees success in online trading in Nepal. However, for beginners developing such plans from scratch may be a daunting endeavor. It is advisable for them to approach reputed companies offering forex trading services in Nepal like WesternFX to develop a strong trading plan.

How Trade Management and Stop Losses can Boost Profits?

Trade management is undoubtedly among the most vital factors of profitable trading practices. Most successful participants of online trading in Nepal use logical evaluation to enter the market and have a sound plan that they follow. While most strategies would need the basics of trade management, there are different aspects that one would need to incorporate into his trading system to maximize chances of profit. 

Stop loss

One of the most important elements of management in a trading strategy would be locating a stop loss. Stop losses are meant to be positioned before one enters the transaction, for they could determine the outcome of a trade. This is a critical part of the entire procedure and one would need to position his stop loss within the right range of pips to avail the right outcome. Most novices would place stop loss by just a few pips’ distance in the hope of seeing the price values move in their favored direction. However, this needs to be avoided and a more accurate method of placing the stop loss needs to be implemented for ensuring minimal losses. 

Trading sessions and their impact

Within a single 24 hour day, the online trading market transitions through three separate trading sessions. One needs to be aware of the impact that each of these sessions has on his transactions. Knowing when a new session is about to be initiated is important, especially for someone trading in the London session. 

When you carry transactions over from one session to another, then the alternations of the coming sessions are sure to impact your trade. To guard from this, you can either terminate your trade before heading into the next session, or position the stop loss in an appropriate manner prior to the arrival of the coming session. 

Risk and reward ratios in trade management

Someone unable to make profits would need to re-evaluate his risk and reward ratio. Implementing the right risk/reward ratio helps to optimize chances of success and regulate the risks involved with a particular transaction. A general rule that traders apply is setting a risk to reward ratio of 2:1. This enables them to win more than thirty percent of the time without having their account’s value diminished. 

Conclusion

These are some time-tested techniques any trader can use to enhance his overall trading performance. If you need more help in this regard, then get in touch with leading Forex brokers in Nepal. WesternFX is a leading international brokerage with our headquarters in North America and clients around the world. Team up with is to deepen your understanding of this field and lift profits!

Money Management and What it Means in Online Trading

This article will explore the concept of risk management and money management for those pursuing Forex trading in Nepal. Successful traders earn their edge in this field only with stronger money management skills when compared to the others. Most failures that one goes through in this business could be attributed to a lack of this quality rather than any other. 

The importance of money management 

The problem with most online traders is that they often underestimate the importance of money management and risk management. However, this is crucial in positioning one’s entry and exit in the market, as well as making the right transactional decisions with respect to one’s trades. Money management is a diverse and comprehensive field consisting of a multitude of aspects. This includes managing capital, allocating the right position size, risk mitigation, damage control, regulation of cash flow, equity management, selection of the right transactions and much more.

Relation between money management and risk management

Although these two areas are both interconnected and of equal importance, it is important to distinguish both of them to better understand and apply both of them. Money management would relate to taking the right position size and ensuring the right investment of capital. Meanwhile, risk mitigation or risk management, is more centered towards implementing controls to the outcome and ensuring that the chances of loss are reduced.

Often, the term ‘money management’ could be inclusive of risk management as well. If one takes a broader view of this term, it could spawn a broader approach around the entire forex trading process that includes having the right education and being able to accurately analyze the market, making predictions, etc.

Steps to take:

With money management, one would need to channel his efforts towards maximizing his usage of investment and capital to carry his portfolio forward. The process would include two major steps:

1) Determining what designated fraction of an account’s total equity to invest and to risk on any trade that is conducted in the US Dollar, Japanese Yen or British Pound. 

2) Calculating how many contracts one should hold in his transaction once an entry is conducted. 

If one manages to master these two vital steps, he or she would possibly be more successful at regulating their capital flow and determining positive outcomes on the transactions in the future. 

Conclusion

Many beginners to online trading in Nepal utilize weak money management structures, and this leads to bad performance. One needs to dig deeper and to flesh out better strategies for controlling the outcome of investments. If you require assistance in this area, then get on-board with WesternFX. We are among the leading international brokerages in this scene, with clients across the world benefiting from our quality services. We can show you the path towards better risk management/money management for improving your chances of profit in this space. 

Qualities of Professional Traders that You Must Emulate

Becoming a professional in the field of online trading in Nepal takes years of experience and hard work. Successful traders are adept at using the flow of currencies to make profits, and there are countless qualities that define their prowess. In this article, we’re going to be examining the traits that professional traders exude and how to apply them in regular trading. 

Strategic Approach

There are classes of traders who attempt to make money out of this sport with a more callous approach. In other words, they believe things would begin to fall in place as they move along with the transactions. However, with any market, be it the FX market or the stock market in Nepal, there are countless ways to fail without a seriously thought out plan. A well strategized, pre-mediated approach is the only way one can win in this field. 

Professional traders have a clear vision of what they’re about to do, and their actions are based on a clearly outlined strategy. This helps them identify the areas of entry in a transaction, as well as process the risk behind the trade. Having this verified approach towards trading is the only way one can manage their risks well and regulate the outcome in the right manner. Having a pre-mediated strategy helps to remove the emotional temptation behind trading transactions, and therefore, helps to bolster chances of success. 

Understanding the Arithmetic Aspect of Trading

The science of online trading is grounded in probabilities and arithmetic. Professionals in the field are aware of the chances of their success with each trade, and can work to reduce risk and bolster the positive outcome. In order to win in this field, one needs to look at it as a field grounded in mathematics. 

Focus and Discipline

With a professional trader, there is a clear understanding that the outcome of a trade depends on the discipline and the focus exerted over it. In order to remain faithful to the strategy and block out the emotional impulses, a trader needs vigorous focus above all else. Success in this area needs a constant supervision of the news and the events surfacing on a daily basis. This, as a result, cannot take place with a lack of discipline. 

Ability to Face Losses

One of the essential elements of trading is the capacity to manage losses, for they are a crucial component of trading. Professional traders aim not to avoid losses altogether, but to learn from them and use them as a chance to further refine and hone their strategies. 

If you want to learn more about the qualities that you need to master to give your trading game a more professional edge, then get in touch with us. WesternFX is an online broker with clients in Nepal, as well as countless other countries. We can reduce your burden and lift your profits with the best tools.