Top 4 Steps to Improve Your Forex Trading in Pakistan

Currency exchange, known more commonly as Forex trading, is the simple act of buying and selling currencies. When you add this concept with the constantly changing market volatilities and fluctuating economies, it comes an intimidating field that has more than enough room for failure! As a beginner, the vastness of Forex can leave you dazed. When you follow a step-by-step discipline, however, you can pick things up faster, and transition into a professional gradually. 

As a novice Forex trader, there are certain prerequisites in order to avoid getting subdued by the immensity of currency trading markets. 

Know How to Improve Forex Trading in Pakistan

Here are 4 crucial concepts every trader should learn while starting off:
 

1) Currency Pairs: In Forex markets, there are dominant pairs, slightly lesser-active pairs, and some currencies that experience inertness at times. Picking the right currency is crucial, because with the wrong pair, in the wrong time frame, in the wrong market, will yield no profit! From major pairs like EUR/USD to minor pairs like CHF/JPY, learn the value of each and how each one yields in different markets.
 

2) Money Management: Managing your trading investments will be a big challenge, given that Forex has enough potential to blow up an account instantly! Stop-loss placement, risk capital dedication and other such measures have to be taken, for ensuring your money doesn't burn out. Forex is as risky as it is profitable; the need for a strong Forex trading strategy is always high. 
 

3) Trading Tools: An analysis-heavy field, Forex requires traders to be incredibly adept, educated and equipped with enough skill to handle volatile markets. As a Forex trader, monitoring each element of a trade can become taxing, this is why trading tools are provided. These help automate trades, analyze past and future trends, and find out the perfect points for entry/exit. Starting off, excellent control over these tools is substantial and can be gained with ample demo practice.
 

4) Leverage: An element of paramount importance, leverage can either make or break your trades. Leverage is a ratio, a borrowed sum taken from your broker; a leverage of 20:1 means, for every $1 you have, you can hold a value of up to $20. It is important to play it safe with this sum, because losing a leveraged trade will cause you to lose all the money, hence owing the borrowed capital back to your broker. The higher the leverage, the higher the debt owed; so play it safe!
 

Embracing yourself with a strong Forex trading strategy tops the list. Only when you have a clear path ahead is it possible to reach success. A solid strategy will give you the control you need. Pair this up with the world-class brokerage from WesternFX, and you can easily dominate your trades! Call us today and get started with Forex trading in Pakistan!

Top 5 Forex Trading Money Management Tips for Beginners

If you think working with thousands of dollars, in a market as volatile as Forex will be easy, you are absolutely mistaken. Foreign exchange, as lucrative as it is, is also one of the riskiest ventures today. Boasting a value of over $5 trillion, Forex stands to serve as a massive platform for traders to make a good winning. However, since this market deals with currencies, there are several influential factors to account for. Be it politics, or the global economy, a country's currency sees a lot of fluctuation.

With the potential for the risk being limitless, traders need to implement strict money management measures to protect their capital. Forex trading is one such field where you can lose more than just your initial investments; with leverage and other such components, losing a trade will cause you to lose immense amounts of money. Currency trades tend to become expensive gradually, and at one point you will find yourself working with over $100,000. Such humongous amounts are no joke, and can't be lost at any cost! Forex money management is a skill you will have to master, to thrive here.

Forex Trading Money Management Tips for Beginners

Learning how to manage your investments will make you a strong trader in the long run. Here are 5 brilliant ways to do it:
 

1) Determine Risk Capital: Risks and losses will be a bridge you have to cross at one point or the other. Foreign exchange houses an interesting irony - without taking risks, you can't make big profits, and risks often lead to losses! So no matter how hard you try, some trades can just not be won. A good approach to this reality is by allocating risk capital prior to trades. Essentially, you dedicated a certain portion of your investment to lose. 

This makes you stronger mentally, in the event of a loss, and allows you to move on from a bad trade better.
 

2) Place Proper Stop-Losses: Brokers provide you with these wonderful mechanisms called stop-losses; all you need do is place them aptly and the magnitude of a bad trade can be toned down significantly. Stop orders are placed at points where you think a trade might go awry. With these orders in place, you can trade worry-free; whenever a loss of a particular threshold has been made, the stop-loss will automatically withdraw your position from a trade. 

Similarly, if a bad trend is observed, it will do the same, ensuring you don't suffer expensive repercussions.
 

3) Don't Trade For The Sake Of It: Trading to make up for lost money, or simply out of overconfidence, can be the worst mistake you make. Forex trading can be a taxing domain, with several trades adding to your stress. Ultimately this bottles up and results in overtrading - a trader's biggest enemy. Being driven by emotions will lead to you investing blindly, under unprofitable conditions, and in a risk-filled environment. Similarly, running around with too much confidence can also end badly. 

Overconfidence can be a blinding force, not letting you see the warning signs as you proceed headlong into disaster. Take time to cool off, understand that losses are inevitable, and approach trades with a calm mindset. Always have a clear Forex trading strategies to make better investment and returns.
 

4) Wrap Your Mind Around Leverage: A common myth you will come across Forex trading in Pakistan is that you win more when you invest more. This belief causes traders to go all-in with their investments, and pair it with huge amounts of leverage. Though a crucial part of Forex leverage isn't something to be taken for granted. Working with this borrowed sum is a risky endeavor. Agreed that leverage does allow you to hold higher positions, and make trades of greater value, but at what cost? Overleveraging can lead to you having to bear the burden of more than just the money invested. A leverage of 1:100, with a trading capital of $500 lets you trade up to $50,000. However, when this trade is lost, you don't lose just $500. You lose the entire $50,000. 

Keep that in mind before delving in. Leverage in safe amounts, and rely on strategy, not capital!
 

5) Don't Trade Instinctively: "I feel that this move might work out." - It probably won't. Instincts are a guiding light at times, allowing us to make decisions we otherwise wouldn't, seldom against our favor. In trading, however, instincts carry very little weight. Forex is a field that relies heavily on strategies and analysis. An educated trader is more likely to succeed than an instinctive trader! Make trades after ample research. Devise a strategy that goes well with your trading style, one that works best with your selected currency pair. 

Technical, fundamental analysis and Forex money management will play a vital role in determining the outcome of your trades!
 

A mighty profitable field today, conquering Forex trading in Pakistan is every trader's dream. Assisted by the right broker, it is undoubtedly achievable! Call WesternFX today, and avail our world-class brokerage. Be it strategies or platforms, day or night, we will assist you with every requirement, and ensure you are loaded from head to toe, to go out there and emerge victoriously!