How to adopt the low-hanging fruit strategy in Forex trading?

The term ‘low-hanging fruit’ implies that the fruit grows on a lower branch and is therefore easy to reach. In Forex trading terminology, this refers to making trades that are easy. Learning to identify such trades and taking advantage of it, will better your odds at succeeding in the market. 

Traders need to shift their focus to low-hanging fruit trades, and here’s why:

Let’s explain this better with an analogy: Imagine you’re in an orchard and you’re hungry. You spot apples on a low hanging branch and pick a few. The entire tree is covered with apples, but you’ll have to invest time and effort to reach the ones on the top. It’s obvious that you’re going to pick the low-hanging apples and leave.

When it comes to trading, most Forex traders in Malaysia do the opposite. They’re probably attempting to pick fruits from all parts of the tree, thereby depleting their energy and resources. Being greedy while trading can destroy the wealth in your trading account. Instead, focusing on low-hanging fruit trades will prove beneficial and more profitable, in the long run.

Establishing the right mindset

The low-hanging trading approach is the best fit for those who don’t want to waste a lot of time looking for prospective trading opportunities. Remember, it’s all about quality over quantity, which means that you need to set your mindset to look for high-quality trades, and not on how many trades you make. Stop trying too hard to make money; otherwise you’ll eventually end up losing it all. 

Wait for those low-hanging fruit trades to come to you. If there’s no trade that’s worthy of being ‘picked' then pack up and come back tomorrow. There’s no point investing in a low-probability trade when you’ll eventually find a lucrative trade waiting for you shortly.

How should you focus on it?

You need to know what to look for and study the market on a daily basis. This will enable you to seize the opportunity when it presents itself. Base your online trading philosophy on patience. Commit only when you find the obvious opportunity with a capital that you’re comfortable with losing. This way, even if the trade doesn’t turn out as you’d expected it to; it won’t hit you that hard. Such a calculated approach to trading is a complete converse of trades that have no basis and are equivalent to gambling.

It is vital to adopt a practical Forex trading strategy to gain a favorable outcome in the Forex trading market. To obtain professional insight on trading, WesternFX, a renowned Forex broker can help you conquer the Forex exchange in Malaysia. Get in touch!

A Guide to Risk Management and Financial Management for Beginners

Before you start working in the currencies platform, it is crucial that you set aside the opportunity to examine the markets and that you start your trading career with a reasonable philosophy and system at hand. At that point, it is essential that you deal with your finances and investments with utmost care. 

In addition to having an idea of which currencies to use and the ability to identify entry/exit signals, one needs to administer his monetary resources and to use strong risk management tenets when using a trading strategy.  

Core equity

When it comes to managing money, there is a variety of plans and methodologies that one can use, but at the heart of a major number of those strategies would be the concept of core equity. This represents the volume of money that you started forex trading with. To take an example, if one begins trading with ten thousand dollars and has a thousand dollars in open positions, then the core equity in this regard would be nine thousand dollars. 

Regulating risk

One of the general trading strategies to apply for beginners is to restrict the scale of risk to just one percent of your core equity. Thus, if your total equity volume stands at a hundred thousand dollars, you must ensure that the amount to be set aside for investment does not exceed one thousand dollars or so. To do this, you could also place a stop loss order at the right position when entering a transaction. 

Over time, as your account equity grows or depletes, you would need to re-adjust the volume of your risk in the same manner. When the account volume drops, ensure that the risk is also constrained in an equal manner. 

How to entertain higher risk?

Applying the same rule, as your account balance rises, the level of risk can be scaled up. When the trade is running in your direction, one could afford to raise the level of risk to a marginal extent as well. There are certain traders who would be willing to make larger investments and entertain more risk for the prospect of winning more money. As a beginner, you could stretch your limit from one percent to five percent to expand your profit making potential. However, one needs to be cautious when dealing with risk as investing more could also magnify chances of loss. 

If you need help with risk management and money management, then get in touch with an online Forex trading company in Malaysia. WesternFX operates on the international level, with online trading services offered across multiple Asian countries including in Malaysia and Singapore and others as well. Get in touch with us to see what this field has to offer!