Why should one maintain a trading diary?

Taking up Forex trading in Malaysia is a business that is lucrative and full of scope for profits. However, several traders have tasted varying degrees of success over the years. To be consistently successful in the industry, traders must learn to look for signs of risks and read the patterns that lead to success or failure. 

But reading the chart pattern only reveals the trend that the market has taken in the past. To bring success to online trading, traders need to read Forex trading pattern and discern the places where one has tasted success or failure. How can this be done? By maintaining a diary or journal! 

Why should one have a trading diary?

Keeping track of every trade ever participated in is a good way of revisiting one’s past online trading activity and looking for areas of improvement. It helps traders identify and discern patterns in their trading activity and analyze the scope for improvement. 

- During a failure, a journal can help traders retrace their wrong moves and identify where they went wrong.

- During success, a journal can help Forex traders identify what is working for them and improve upon the aspect.

What are the attributes of a good trading diary?

1) The date and time when the decision to open a particular position

2) Reason that influenced the decision

3) The market entry strategy.

4) The Forex exchange rate at the time of the entry.

5) The fixed profit/loss.

6) Stop-loss limit

7) Reason for closing the order

8) The nature of outcome

9) Additional comments.

Studying the results of a diary

Evaluating one’s journal is sure to boost success as a trader. This helps a person identify where he/she would need to improve upon. Over time, this will improve one’s performance by minimizing blunders.

Showing one’s Forex diary to an expert broker can help Forex traders gain more insights into their own way of trading and dissect it to find scope for improvement. For such services, partnering with a reputed online Forex trading company in Malaysia like WesternFX can be highly useful.

The Significance of Picking the Right Entry Time into a Trade

Success in Forex trading is always dependent on one crucial factor- Timing! Getting the capital “T” right is one of the most important things if traders hope to see success in their trade.  Forex traders in Malaysia can relate to having a hard time when it comes to planning an entry into the market. For novices, it is always a challenge to plan an entry into the market as there several factors that need to be considered and any wrong move will significantly diminish the profits that can be made out of the trade. 

So how can traders plan a successful entry?

Traders can know if their entry was perfect only when they make a successful exit. However, to ensure a successful entry in the online trading market, the following steps need to be practiced.

• Trade should be taken up in the strongest currency pairs in the direction of the trend. This ensures maximum returns.
• Using stochastics, the health of a trend can be determined. This can be used to buy it at or near the trend line.
• A profit target of at least twice the amount invested should be booked. This gives enough room for the position to move.
• Traders can also look at the charts and identify previous successful forex trading strategies and their entry times. Using these can help traders make a successful entry into the market.
• Using limit orders can help traders get better prices. This helps them plan better entries.
• The next day’s entry should be placed based on the previous day's performance. Trades should be set up at the end of each day and should commence only after 15 minutes after the opening bell.
• Use the T.L.S. principle to set up the perfect trade. Identifying the right Trend, Level and Signal is important before entering a trade. When two of the three criterion match, a Forex trader can enter the market.

Figuring out when to enter a trade is an important exercise while Forex trading in Malaysia and getting it right is important for success in the long run. Developing a successful entry strategy can be arduous if one is new to the industry and is uninitiated in the fundamentals. Allying with a reputed online Forex trading company in Malaysia like WesternFX can help traders apply the principles better and attain success.

What is CFD trading? How do traders engage in it?

CFD, short for “contracts for difference,” is a form of trading where the trade occurs in contracts for the delivery or maturity of an asset class. This form of trading is increasingly offered by several reputed Forex brokers in Malaysia like WesternFX, and it is a way to trade stocks, indices, and commodities.

How does it work? 

A CFD contract is an agreement between two participants - a trader and a provider of the contractual agreement. CFD is usually done on assets such as bonds, stocks, index funds, currency, oil or gold which have an opening date and a date of maturity/ delivery. The trading activity is usually on the difference between the opening and the closing price of a contract.

Certain contracts rise and fall in value during the contract period. This makes it possible to trade in live movements of the market price of the instrument. The instrument may never be owned by the trader and it will likely be settled before the delivery of the contract occurs. These contracts are much more flexible than other modes of online trading in Malaysia and come with long and short types of trading facilities depending on the trending price direction. 

Benefits offered by CFD trading:

- The investor is not required to own the financial object. He merely trades on the contract, an instrument which guarantees the delivery of the object. Hence, he can invest partially or wholly in a contract and trade on it.

- The rates of deposit begin from just five percent. This makes it easy to open large positions with minimal investments.

- Some of the contracts in CFD trading usually do not have an expiry date. They can be traded endlessly thereby making the chances of reaping profits much higher. 

- There are no taxes and brokerage fees in CFD trading, thereby making it a highly lucrative trading arena.

While there are several benefits of trading CFDs, there are equally certain aspects which can cause losses if not handled properly. When engaging in CFD trading in Malaysia, it is highly important to have a sound risk management plan so that the traders can safeguard their investments when markets turn sour. For beginners looking to take up this domain, it is important to consult with reputed brokers like WesternFX and get the fundamentals strong before get started with CFD trading.

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!

A Simple Guide for Timing your Trades

Having the right timing is an essential element in Forex trading, both here in Malaysia and worldwide. Apart from locating the right trade, one needs to be able to position his entry and his exit in the most accurate manner possible to widen the chances of success. Trading when the charts are poised against you is sure to bring you loss. In this article, we’re going to be exploring the importance of good timing, and identifying methods where traders can strengthen their timing in the Forex market. 

Examine the markets

Most professional traders understand that there are only specific zones in a day when transactions would be most fruitful. It is important to comprehend that the stock markets of countries have a great impact on the currency movements around the world. When multiple stock markets are open, there is bound to be more turbulence in the Forex exchange for someone trading in Malaysia. It is estimated that when only one market is open, the range of price movements could be around 30 pips, which is a modest level of volatility. Keeping an eye on stock exchanges with a prominent stature can deepen your insight into trading. The US dollar is the most heavily involved currency in the Forex market, and is, therefore, the currency that one needs to monitor most closely. Therefore, to grasp the best setting for a transaction, one needs to study the New York Stock Exchange as it is also the largest stock market in the entire world. 

Understand the necessary overlap timings

The time zones when stock markets overlap brings volatility into the Forex exchange, thereby creating a ripe environment for both profit as well as loss. The largest of these overlapping periods occurs when the New York Stock Exchange and the stock market in London open. During this period, the two major currencies, the dollar, and the euro, are triggered. As a result, the currency markets would be at their most active and volatile state. For those attempting to aggressively interact with the movements and make profits, this would be the ideal time to begin trading. 

Adhere to the news

Large scale news breaks can bear a massive impact on the markets. News of country’s economic updates, along with new policies on currencies by their respective central banks can also affect the market. It is important to keep an ear out for economic, geopolitical and political news relating to major countries. This helps to be more wary of the appropriate timing to enter a trade. 

These are some of the basic ways in which a trader can learn to foresee and determine the right avenue to enter a trade. If you want more insight into Forex trading, then joining hands with a leading brokerage firm could help your cause. WesternFX is a leading international broker with clients in multiple countries. Contact us to polish your understanding and lift your skills in the world of Forex.