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Five of Our Best FX Tips

Five of Our Best FX Tips

Der Devisenhandel ist lukrativ, aber auch sehr knifflig und anspruchsvoll. Sie können über die fundamentalen Grundkenntnisse verfügen und in diesem Sektor gut abschneiden und Geld verdienen, aber um zu glänzen, sind bestimmte Tipps und Tricks unverzichtbar. Mit unseren Tipps und Tricks sind Sie Ihren Mitbewerbern auf dem Devisenmarkt immer einen Schritt voraus.

First Published date: 20. August, 2022
Last Updated: 15. March, 2023
Fact-checked by Adrian Müller

Forex trading is lucrative, but it is also very tricky. You can have basic knowledge and do well in the sector, but to excel, certain tips and tricks are unparalleled. These tips and tricks will help you have the edge over your competitors.

Such tricks include utilizing trading hours (especially the overlaps), having the latest knowledge on economic status, choosing the right broker, focusing on entry and exits, etc.

Although all traders have the basic idea of these tips, having in-depth information will give you the upper hand. This article discusses five of our recommended essential tips for a forex trader. We will also shed some light on things you must avoid to succeed in this sector. Let’s get started.

Table of Content

Five Tips For Successful Forex Trading

Although the principal basis of forex trading is the same and all traders follow them, having some advanced knowledge can be the difference between you and others.

Cashing in on trading hours, monitoring certain indicators, staying updated with global economic changes, etc., are crucial for beating the competition. Here are five tips for successful forex trading:

1. Focus On The Trading Hours

Certain times of the day provide better opportunities for success. Focus on specific times to make the most out of your trade. The best times to trade the forex market are when there is an overlap between two major trading sessions.

This occurs when the market liquidity is at its highest, and you can find the most profitable trading opportunities. The US market is open between 8 AM to 5 PM, the London market is open from 3 AM to 12 PM, and the Tokyo market is open from 7 PM to 4 AM. It’s essential to know the trading hours of your individual needs.

However, you can make the most when multiple market trading hours overlap – the US and London market overlaps between 8 AM to 12 PM est. Almost 70% of all trade occurs during these hours because the US dollar and the Euro are the most popular currencies in the forex market.

The London-Tokyo market overlaps between 3 AM to 4 AM EST. Still, this overlap offers little to traders because of the excessive gap between time zones. Sydney and Japan’s market overlap is less volatile than the US-London market. Still, it offers a relatively good chance to traders.

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2. Keep Tabs On Interest Rates And The Latest Updates On The World Economy

The monetary policy set by the government has a massive effect on the currency market. Low-interest rates and high liquidity are indicators of bad market conditions. In contrast, the opposite is an indicator of the thriving economic status of the country.

It is important to note that the monetary policies of other countries and how they impact the exchange rates also matter because you, as a forex trader, are dealing between two currencies from two different countries.

Besides the monetary policies of governments, you must also pay attention to what policymakers are up to and how other economic conditions are doing, such as inflation, GDP, unemployment, and other economic indicators. The latest knowledge will help forex traders make more informed trading decisions.

3. Pick The Right Broker

Picking the right broker is a precursor to success in forex trading. There are many ways to find a good broker. However, the most critical step in finding a reliable forex broker is ensuring they have a proper license. You would also want to ensure that your money is protected and that you deal with a legitimate broker. The fees that the broker charges are further factors that should be considered.

You must ensure that the fees are competitive and that you aren’t charged too much for your trades. Another vital factor to consider is the platform that the broker offers. You must ensure that the platform is reliable and stable. The broker should have access to various tools for research and analysis.

Therefore, you can make the most informed decisions possible. A customer-friendly broker is like the cherry on top. They should be able to answer your questions and provide any assistance. A customer-friendly broker is one that you can trust and work with without any hesitation.

4. Predetermine Entry And Exits

As a broker, you should set entry and exit points before trading. You should adequately monitor your charts and make sure all your charts are correctly synchronized. Many traders need clarification on conflicting information when looking at charts in different timeframes.

What shows up as a buying opportunity on a weekly chart could be a sell signal on an intraday chart. Therefore, synchronize the two if you take your primary trading direction from a weekly chart and use a daily chart for time entry. In other words, if the weekly chart gives you a buy signal, wait until the daily chart confirms a buy signal.

5. Keep Your Eyes On Technical Analysis Indicators

Technical analysis is one of the most important aspects of Forex trading. By keeping an eye on technical indicators like moving averages and relative strength index, you can better understand when to enter and exit a trade. This helps you maximize your profits and minimize your losses.

Some common and valuable indicators are moving averages, RSI, and price action. As a forex trader, you should have a basic knowledge of these indicators. Let’s take a look at these three crucial indicators in more detail:

Moving Averages

The moving average is an indicator that takes the average of the past price data and applies it to the current price data. Moving averages can help you determine where the market is going. Taking the average of past data gives you a better idea of where the market is heading.

It can help you identify support and resistance levels. When prices rise above the moving average, it can be seen as a sign of strength. Conversely, when prices move below the moving average, it indicates weakness.

This allows you to make better trading decisions and exploit underlying trends. Moving averages can also help you identify when to enter and exit trades. A moving average is an excellent tool for setting your currency trades using the ongoing market trend.

The most used moving averages are the simple moving average (SMA) and the exponential moving average (EMA). The SMA is a lagging indicator because it is calculated from past data and is used to identify the trend. In comparison, the EMA is a more advanced version of the SMA. It is used to identify short-term price movements.

Stochastic or RSI (Relative Strength Index)

Stochastic or RSI (Relative Strength Index) are two of the most widely used technical indicators regarding forex trading. Both indicators can be used to identify potential entry and exit points.

It works on the premise that when the closing price is near the top of its range, it indicates that the pair is overbought, meaning that the price has pushed up too far and too fast and is likely to reverse direction.

On the other hand, when the closing price is near the bottom of its range, it is likely to be oversold, indicating that the price has pushed down too far and too fast and is expected to reverse direction. The RSI is calculated by taking the ratio of average gains to average losses over a certain period.

It is used to identify potential buying and selling opportunities by measuring the degree of buying and selling pressure. A high RSI indicates that the pair is overbought, meaning that short-term increases are too much and may signal a potential exit for long trades.

Conversely, a low RSI suggests that the pair is oversold, meaning that short-term decreases are too much and may signal a possible departure for short trades.

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Price Action

Price action is another essential concept in the world of forex trading. It is a form of technical analysis that focuses on the movement of prices over time, enabling traders to make decisions based on market dynamics rather than relying solely on indicators. The first step in using price action is identifying the trend.

Trends are the market’s direction; you can identify them by looking at the higher highs and lower lows or lower highs and lower lows. Once you have identified a specific trend, you can utilize that information to make informed trading decisions such as finding turning points, determining entry-exit points, etc.

Furthermore, understanding the support and resistance levels is vital to analyzing price action. They indicate price levels where the market might experience a reversal. Analyzing these levels allows a trader to gain an edge and be better prepared for the market’s price movements.

Support and resistance areas are where the price finds it difficult to break through. It helps traders identify potential entry and exit points in the market. These levels provide insight into possible reversal points in the market. As a price action trader, it is essential to identify when the market is in a range.

Range trading occurs when the price moves in a sideways pattern without a clear direction. This type of trading is widespread in the forex market. It can be highly effective in identifying potential entry and exit points.

Things You Should Avoid As A Forex Trader

On top of having and applying crucial knowledge for achieving success in forex trading, there are some things you should actively avoid as a forex trader. Here are four things you should stay clear of when trying to be successful in forex trading:

Investing More Than You Can Afford To Lose

One of the essential rules of forex trading is only to invest what you can afford to lose. Trading with large amounts of money seems like a good idea, but it can put you at risk of losing everything.

Forex trading might seem lucrative, but you must put all your belongings in it. In business, profit and loss are possibilities; you never know what comes next. Instead, start small and gradually increase your investments as you gain more market experience.

Unrealistic Expectations

Forex trading is not a get-rich-quick scheme. It requires a lot of hard work, knowledge, and discipline. People who expect to make big profits in a short amount of time often end up losing money.

Keep your expectations high. Be honest, study others, and understand what you should expect from this sector. Work towards your goal; stay calm and energized. Be steady and win the race.

Forex Trade After News

News headlines can create wild market swings, presenting a lucrative opportunity for quick profits. However, before taking the plunge and impulsively trading on the news, you must understand the risks associated with such strategies and have a solid trading plan.

Rather than impulsively jumping in and out of trades in a volatile market, waiting for the dust to settle after a news release is essential. This helps reduce liquidity concerns and allows for better risk management.

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Plus500 is a trusted global brand that offers an easy-to-use trading platform for online traders, alongside access to share trading, crypto and a thorough selection of CFDs.

79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Starting From Zero

Many traders think they can start trading with zero experience and little money. While it is possible to trade forex with no experience, it is essential to understand the basics before you start trading.

Also, you should have an adequate financial backup. You should take the time to read, research, and practice trading with a demo account to get comfortable with the process before investing real money.


Forex trading isn’t child’s play. It’s intricate and requires diverse knowledge to become successful. Even then, there is no surety. But the tips and tricks discussed above should be helpful for you to have the edge over others in the market and protect yourself from the potential dangers of investment.

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About the author – D. Schmidt

I’m a German stock trader who has lived around the world. I travel extensively and believe that my experiences give me a unique perspective on global markets. I love trading! It’s always exciting to see what happens next. My goal is to help people understand the game so they too can enjoy it to the fullest. In this blog, I will share some tips and tricks that helped me along the way.

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