How Can You Tell When to Buy and Sell on the Forex Market?

by Andrew McGuinness     Jul 16, 2019

When it comes to making profitable moves when Forex trading, the most experienced traders almost seem to have a sixth sense for making money. They wake up in the morning, head into work, and almost intuitively seem to be able to correctly guess how the market is going to move without even breaking so much as a sweat. While you might be jealous of this illusionary superpower that veteran traders have, the secret is that this type of "instinct" is far from an inherent ability. These traders, who have spent upwards of thirty years tracking the Forex trading market, have simply learned a winning set of rules that helps them better understand when to hold onto their currency and when to make a trade. The beginning Forex trading hopeful can also learn to apply these basic strategies that the veterans do, shooting themselves to the top of the board and improving their chances of success. But how can you tell when you should buy or sell when Forex trading?

Right off the bat, the majority of smart investors will tell you that you shouldn't hope for extremes when trading. Many would-be investors have lost out on a major trade by getting greedy and hoping for just a few pips more when choosing to sell their held currency. If you notice a good trade, most veteran investors will tell you to strike while the iron is hot; you should avoid telling yourself that you can make even more, as this often causes those just starting in Forex trading to miss out on a great potential for investment and kick themselves later on. The real money in Forex trading comes when moving a large amount of money at once and making a relatively tidy margin when trading back; most experienced investors will tell you that if they have bought or sold within 5 points of the limit on a moderate-to-wide swing on any given day, they've done very well for themselves.

On the flip side of the coin, you also need to avoid allowing your emotions to enter your judgment when Forex trading. This may seem like annoyingly obvious advice, but many beginning traders are surprised by how difficult it is to separate their emotions from their trading profile and portfolio. When the prospect of losing money is on the table, many investors find themselves putting their heart above their head and selling low or buying high. However, one of the firm truths of trading is that the market will inevitably go in cycles; smart investors know that depressions and turns to the bear are unavoidable, so they aren't afraid to hold onto a currency that is temporarily depreciating, waiting for a better time to sell and avoiding the panic that causes beginning Forex trading hopefuls to lose it all.

The best way to attune yourself to the movements of the market? Getting the right education. Nothing will become more valuable to your trading profile than the smarts to understand and recognize natural movements of the Forex cycle. Before you begin trading, find a reliable Forex trading educational website that 's simple to understand, built for beginners, and offers a number of ways to learn. Then, spend some time reading up as much as you can before making your first investment. On the Forex market, nothing can substitute natural experience, but one of the best things that can help is getting a proper trading education.

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