Forex Trading Myths You Should Bust Right Away

When you're a part of something as big as Forex, it is natural to get blinded by some myths and misconceptions. There's a lot of money flowing around, and a lot more traders aiming to bag some of it, this is the perfect recipe for confusion. Inexperienced traders and players looking to intimidate you will serve a lot of hoax just to stir you up. Often times, traders get driven by these misconceptions into making bad calls or worse yet, not trading at all. 

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Here are 4 Forex trading myths you should keep from believing: 

1) Forex Will Make You Rich: 

Forex trading does indeed have immense profit potential and has made many a trader rich, but such success doesn't present itself simply. Succeeding as a Forex trader means putting in years of effort and trading with absolute diligence. You can keep aiming at big profits, but without the necessary efforts to back your reach, getting riches will remain a pleasant dream. Forex does give riches, but it takes a lot of work to earn it!

2) Leverage Big So You Win Bigger:

Leveraging big will lead to you failing bigger; the bigger you are the harder you fall. By employing leverage, you will be able to hold positions of massive value. However, when your leveraged trade position sees a loss, the money you invested gets burnt in an instant and you will owe your broker the entire sum borrowed. 

3) Complex Strategies Work Better: 

While complex Forex Trading Strategies might have a good chance of bringing in big wins, it doesn't necessarily mean that big approaches work better than the others. Forex trading markets see a lot of strategies, each profitable and efficient in its own way. So long as you implement it right, you can make a good winning!

4) Only The Rich Are Allowed To Trade:

The rich have a slight advantage, yes, but they're not the only ones who can trade. If you have even $200, you can get yourself a trading account right away! Forex trading is an unbiased domain, with everyone standing on the same ground. 

Forex trading has elements that will often mislead you, but with diligence and discipline, you can clear out the dust and aim directly for the profits! Sign up with a broker as motivated as you are - sign up with the best Forex Broker In Indonesia - WesternFX. Our experts will help you understand the subtleties of Forex better, and ensure your mind is where it needs to be, and not consumed by wrong beliefs! With us by your side, you'll always be on the right track, the profitable track. Call us now to know more! 

Three factors to consider when choosing a Forex broker

The online trading scene in Indonesia has taken significant strides in the past few years. Several enthusiasts have taken up Forex trading as a viable and reliable means of investment. Fueled by the booming economy and increasing market sentiment, the Forex market has made itself inviting for novice traders by shedding off volatility and posting a steady growth. 

The time is ripe for novice traders to ally with an online broker and commence their trading careers. However, before choosing a broker, traders should check for the following criteria and then go ahead and finalize the broker. 

Important Criteria

• Dependability: Dependability is a highly important factor. Traders spend their hard earned savings on the Forex account and engage in the activity with the hope of making better returns from the Forex market rather than from a low-risk medium like banks. Brokers should be mindful of this and help traders identify as many opportunities as possible and encourage them to make profits from the same.

• Services: The broker is the link between a trader and the Forex trading market. This makes their role quite vital in helping the trader realize his ambitions on the market. The services offered by a broker have to be doubly verified and analyzed before a trader signs up with them. This being said, traders should try a Forex demo of the platform before they sign up with the broker.

• Service Costs: All online brokers operate for profit. There are no not-for-profit brokers. While the industry forbids brokers from collecting commissions, they cover the cost of their operation by the spread. Hence, it is vital for traders to evaluate the spread size and ask for fixed spreads instead of flexible spreads.

Following the aforementioned criteria can help traders when choosing Forex brokers in Indonesia. This will help them ensure a smooth and successful trading career. Partnering with reputed online brokers as WesternFX is a good choice as they have built the reputation over the years and are known to have fulfilled all the criteria mentioned above.

What is Naked Forex Trading? Is it advisable?

When it comes to Forex trading, there are no restrictions on how one can trade and what rules should one follow on the live market. Each trader follows his or her own strategies and gains mastery over the same by spending time working out these strategies.

To succeed in executing the best Forex trading strategies, most traders rely on technical analysis books written for stock, futures, and option traders. They may even scour the internet for expert tips and use the same in order to improve their performance while Forex trading in Indonesia. However, using no strategies can also be a strategy. It is, in fact, the oldest strategy that has been used in online trading.

Naked Trading

Naked Forex trading is a style where traders shun all of the technical analysis tools and the indicators and only focus on the price chart. It is a simple way of engaging in trades where traders seek to keep the chaos and confusion caused by multiple indicators at bay and focus on what the charts actually show.

It is also known as price action trading as the traders predominantly focus on the candlestick chart patterns and other patterns. Whilst this form of speculation is not considered nontechnical, it barely uses technical analysis tools to trade and relies almost entirely on ‘price action’ theories to speculate on future currency price movements.

Benefits of Naked trading

• It is a very simple and rudimentary style of Forex trading
• It helps traders avoid the hassle of juggling through multiple charts and instead lets them focus on a single chart.
• Traders can avoid the chaos caused by the market noise and just focus on what is happening in real time.
• It helps traders keep away from all the confusion caused by multiple indicators
• Traders can learn how the market operates in greater detail by just following its price trends. This can help them mature as a trader and improve their performance

The aforementioned benefits show us why naked or price action trading is the best method for traders. But to pull off such a simple style of trading it takes enormous learning and practice. Novice traders who are looking to try this strategy can approach reputed Indonesian Forex brokers like WesternFX who can offer the guidance and rigorous training required for this strategy.

How can setting short term trading goals help traders build self-confidence?

For traders who are beginning Forex trading in Indonesia, confidence may not be an easy thing to come by. Confidence in the Forex trading industry is quite effervescent. Traders may feel comfortable while they are on a success spree. However, at the hint of the first loss, their confidence may vaporize leaving them searching for ideas.

At this juncture, it is always important for traders to understand that the best way to gain confidence is to go back to the playing field and win again. So, how can they accomplish this? The best step would be to start by setting goals for short term trades and trying to win at them. 

How can Short Term trades be used to gain back confidence?

- Analyzing trades: 

By analyzing the activity carried out in the past weeks, traders can gain more insights into how their Forex trading strategies have borne results. Performing an analysis of short period trade activity will help learn more about their mistakes in a shorter time frame. This is beneficial. 

- Learning to interpret trends: 

Trading on the basis of trends helps traders understand better about the market dynamics and how they perform in the short term. This helps them fine tune their fundamental skills.

- Mindset: 

Mental preparedness and mindset are two important attributes for successful trading. Engaging in short-term trading improves the focus of traders as they have to look out for minute price movements. This helps them better their skills.

- Routines and Processes: 

To successfully pull off short-term trading, traders need to develop a routine that keeps pace with the requirements of the online trading market in Indonesia. Sticking to this routine helps them understand the processes better and mold themselves better to develop confidence in their trading skills.

Working the requirements mentioned above can help traders develop their confidence and engage in long-term trading successfully. Following these steps is vital as they help focus on the trading activity more and reduce distraction which is vital to improve their understanding of the market. However, for traders who feel that they still lack in a confidence and want to improve their Forex trading skills for trading in a competitive market, partnering with reputed Indonesian Forex brokers like WesternFX can help them gain back the lost confidence.

Social Trading: Different Types and Styles

Thanks to the advent of the internet and social media, the world of Forex trading is no longer solitary as it used to be. In the early days of online trading in Indonesia, traders had to rely upon whatever content that was available online to participate in their trade. Even Forex trading strategies had to be forged from scratch with no input from Forex experts as there were no facilities for the same.

However, today it is a different story altogether. With high-speed internet and several online Forex communities that it bred in the process, traders can get access to a wide range of support from the online community. This trend, also known as social trading, is vibrant and thrives on the sheer number of traders who adopt it. There are several styles in which this is practiced. 

Popular types of Social Trading platforms

1. Signals or tips

Several online sources provide signals and tips based on reading the markets. These websites are usually operated by seasoned forex enthusiasts and brokers who predict trade signals for fellow traders to make use of them. Traders who use such services need to be wary of the accuracy of the information and tips that they receive on such platforms as they may not be 100% accurate.

2. Copy Trading

It simply refers to the copying of others’ trading style. For novices who are still new and do not understand the market in its entirety, this style helps them follow the actions of expert traders and make benefit of their expertise. This activity helps them realize profits by leveraging the knowledge of experts. However, it does not guarantee success in the long run.

3. Forums and profiles

Several forex platforms that are offered by reputed online brokers in Indonesia like WesternFX offer traders access to forums where they get to meet their fellow traders online and interact with them. This helps traders exchange their ideas, discuss strategies and make use of different tools, tips, and forecasts.

4. Auto-bots

While Auto bots do not fall strictly under the category of social Forex trading, they are beneficial as they help traders trade without the requirement for direct interaction with others and also remove the human element from trading. This makes using Auto bots effective. Auto trading usually involves traders setting various criteria for the trading activity and letting the platform execute the trade automatically without human intervention. This makes it desirable.

The best way to engage in social trading is to hunt for the best Forex brokers who offer traders access to the right tools. Partnering with reputed firms like WesternFX can help traders gain access to the best Forex trading conditions in Indonesia.

How do seasoned traders distinguish themselves from the rest?

The Forex trading scene in Indonesia is among one of the most vibrant in South East Asia. With several online brokers offering competitive spreads for Forex and low-cost trading accounts, the number of traders in investing in Indonesia stock market and Forex is scaling new heights. Backed by access to free Forex demo accounts, a new armada of part-time investors is entering the scene. In such a competitive scenario, it is imperative for Forex traders to establish their identity and scale new heights without being lost in the clutter.

So, how do novice investors master their Forex trading strategies?

Well, the shortest answer to this question would involve two words- Discipline and Discipline. 

The most seasoned of Forex traders attain their status by adhering to a few foundational rules that need to be practiced for one to able to survive in the long run. Following these rules can award traders with a consistent performance.

The 10 Foundational rules:

1. Trade only when the timing is right. Look for the perfect trade setup and lay in wait for the market to go in your direction.

2. Develop a system that is practical, strong on fundamentals, and backed with plans for contingencies.

3. Do not lose confidence over a losing position. Believe in your calculations and wait for the market to turn around

4. Do not express overconfidence after tasting a string of successes. Such an attitude may make you overlook market indicators and cost dearly.

5. Never trade on instincts and likely epiphanies. Always open positions based on signals that you see on the charts. Analyze them thoroughly before investing.

6. Set a Stop-Loss as you open the position. Do not delay it when it is about to be triggered as this might affect your trading pattern.

7. Stick with a trading system and think twice before abandoning it for a newer one. Scouting incessantly for newer systems on the market do not assure better results.

8. Do not risk more than what you can handle. Set a risk limit and do not exceed it.

9. Avoid greed to maximize profits. Learn to get out of a trade that is still going strong.

10. Do not take a position just because everyone else is taking the same. Do your research before opening a position even if the market is in favor of the position.

Adhering to such rules with discipline is what distinguishes a seasoned trader from a novice. Discipline in trading refers not to the seriousness that one brings to the process but the sincerity with which he sticks to the rules. To master these rules and develop a disciplined approach to trading may not be easier for beginners as the lure for money distract them from their final goal. Partnering with reputed online brokers in Indonesia like WesternFX can help traders stay focused and prevent them from going astray.

Building the Right Exit Strategy for Trading

One of the elemental parts of Forex trading in Indonesia is terminating a transaction. However, this is also considered by many as one of the hardest. Developing a successful exit strategy can be frustrating for many, especially the ones newer to this arena and with lesser exposure to the live scene. The concept of trade exit is given lesser significance and emphasis than it should be in the Forex learning stage. In this article, we’re going to be discussing the importance of an exit strategy in online trading, what makes it challenging, and some of the best ways to get it done.

What makes it challenging?

There is one principal reason for the difficulty people experience implementing their exit strategies: The general mentality is that an exit method is just an entry method, but applied in reverse. This is flawed and harmful thinking that leads people to miss the crucial elements of an exit plan. An exit and an entry strategy could be held as two completely different elements of the trading process.

Choosing the right method

Different traders utilize different methods with their exits, and there is no uniformity with this concept. One must tailor his methodology as per his style of working and preferences. When determining the method that you need to use, you must consider whether you envision long term or short term movements for profit making. Below are a few reliable strategies for exiting trades in the most efficient manner with optimal profits:

Strategy 1

In this strategy, you need to view the space between the trade entry and the stop loss zone as one component of risk. The profits that you would make would be on a scale built on this. For example, if you wish to make double the profit, then you set a profit target of 100 pips where the stop loss is at 50 pips.

Strategy 2

This approach represents a time-based exit system. Here, a trader decides to exit the trade that remains open after a designated period of time.

Strategy 3

This is a system based on areas of support and resistance. One would need to locate support/resistance zones with the use of graphs and then set targets for profit.

Strategy 4

When your trade is moving in a strong direction over which a clear trend line could be drawn, then watch out for breaks in the trend line and use them as indicators for exiting the position.

Conclusion:

A methodology for exit is a key component in a broad and comprehensive trading strategy. If you’re having trouble with developing your own unique exit plan, then avail the guidance of professionals in the field. WesternFX is among the leading Forex brokers for traders in Indonesia and the nearby region. Call us now to raise your bar in trading and enforce better strategies in the market.