If you talk about the new trends of how to make investments over the Internet you have to bring the Forex in your top chart. A new creative business revolution has finally come to our hand in which we can invest through using the online. Forex is a perfect solution for those peoples who want to engage in the financial markets to make money through the Internet.
Now we are going through a time where technological invention changing our lives all the way. It is quite impossible to step back without adopting those wonderful tech creations. Just imagine how much you are depending on technologies now (mobile phones, tablets, laptops) than in five years ago.
You can Just look around your acquaintances where you can observe how many of them have accounts on social networks, have developed a website to promote their business and are even taking some online course to educated themselves in something they passionate about. If you look today you will find the practical connections to the online almost everywhere in your life. Even in your walk, having a coffee, having lunch or waiting in the line of the bank you are in touch of your device screen. These are the result of the new tech world of opportunities which are much bigger than our imagination.
Unlike years ago, now you have the opportunity to study through video tutorials on your tablet or mobile phone and if you want to grave the new investment concept like Forex you must have to consider the following:
How can I make money on the internet through investing in Forex?
The quickest and easiest answer for this quarry is you must have a functional Forex strategy in your mind that allows you to earn money and have an investment advantage in the markets. But first of all, you should have a clear idea about the Forex Market and punctually understand the foreign currency.
Once you clearly understand the basic points of the Forex trading you can move forward to understand something more advanced than the Forex Strategies.
A Forex strategy can be develop based on the market review when there is an advantage to perform operations over the markets and the situations are mostly positive to greater the chance of profits than losses.
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Forex strategy should be designed in the same way as a store or a conventional business where you develop a creative business plan and a creative business strategy. Your business operation hours, your contact with the suppliers, a list of detail products or services to offer and how many employees you need to have for your business, all are your business strategies and you have adopted the same strategy to develop your Forex trading business.
You probably noticed that I have referred to a strategy like “generate more profits than losses” that means the investor (or trader) must have knowledge about the negative operations. Negative operations basically refer the business expenses that you need to take into account.
Therefore, if a trader is expecting to have some negative trades, he should have calculated how much money there to be in risk by operation or transaction, this is called “Money management or operating risk management.
Again in reference to opening a store or a conventional business; you know you have to cover your whole expenses. You will pay for electricity bills, maybe a rent, you will pay for the products that you bought from your supplier and the salaries of the employees.
In the way you can assume that these expenses you must have to pay, you should also do the same assumption in your Forex trading that you may have negative operations in there as well. Therefore, we could say negative operations are the expense to keep your online business running.
Elements of a Forex Strategy:
In below I will explain the details basic elements that should have the Forex trading strategy:
- Like all other business concepts, Forex should have an entry point.
- You have to know how to Stop Loss.
- Sharing the business profit.
- Trailing Stop (move to the start stop to ensure a profit or to reduce the risk).
- You have to calculate the Risk as well.
A Forex trading strategy may vary on different investor but most investors carry the combined strategy of the following three factors:
- Technical Analysis by Price-Action (Price/Action).
- Technical Analysis by combining all Indicators.
- Analysis of News and Statistics which is fundamentals.
Personally, in my trade, I do combine number 1 and 2. More in detail, I like to invest in Price/Action analysis and I take my indicators based on the current trend or the strength of the instrument.
I like to use the German Index (DAX30 or GER30) as an operation. Although most of the trades I make take place in Forex (currencies) and also I have my share in Indices and Commodities.
I do notice on how the price goes back to 76.4% of Fibonacci and the trend line coincides with the value. The thicker green arrow indicates the reversal point and there I have my entry point in the operation.
To complement my theory and to participate in the markets I want to confirm my combination of personal indicators that confirm me the certainty that I am looking at the market from the right angle that will come into play. The smaller green arrows indicate all the important confirmation points I am looking for to enter an operation.
Another key point to keep in mind which is also very important is you have to compare several graphing times at the same time.
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The image you can see is the GER30 or DAX on a 15-minute chart, but I’m always on the lookout for larger graphs like 60 minutes, 4 hours, 1 day and sometimes 1 week. If in any of these graphs I find some great points of support and resistance to make a decision to whether I will continue to participate in the markets or not.
Another very important factor we must consider is the personal psychology of the investor and how they feel when applying the strategy.
Well, you have to keep in mind that maybe a strategy can lose 4 or 5 operations but that does not mean that the strategy is bad or not good. A Professional investor knows his strategy will work 70% (for example) and that does not mean that the investor have to change his strategy even if it has several negative correlative operations.
Here, I want to draw the biggest difference between a Professional Investor and a starter is the professional investor blindly believes in his Forex strategy and nothing will change his view to putting away those rules.
End up with some recommendation:
If you about to starting your Forex career and you have your Forex strategy ready or if you are already an active investor in the foreign exchange market, you need to know this 5 key points in details before investing (entry point, stop Loss, profit taking, trailing stop and risk calculation).
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If you are still little doubt about these 5 points, you should stop trading and review your strategy once again. Personally, I have taken about 1 month to review the whole strategies to polish a particular Forex strategy.
So, if you are planning to take stock investments as part of your life, I must recommend you to have a clear view of strategy on how to invest in the markets and most importantly you have to accept the risk of negative trades and that is simply part of the business.