The forex trading market is one of the largest in the world in terms of daily trades. It is easy to enter or leave because you will always find buyers and sellers available for currency pairs that you want to trade.
In order to make the most from forex trading, you should look to strike a good balance between quantity and quality. Too many trades can be risky and more expensive but the return can also be quite good. Little to no trading can put you at the risk of becoming dormant and reduces your profit potential, though it is also less risky.
Number of Trades
You Forex trading goals will play a large part in the number of trades you make each month. If you intend to use forex trading as your primary source of income and devote your time to trading full time, then 4 to 8 trades each day is a good number of trades to aim for. If you trade 20 days in a 30 day period, then you should be aiming for 100 to 200 trades in a month.
On the other hand, if you are only working on forex trading part-time and it is not the main source of your income, then the number of trades can be 1 -2 each day. A total of 20 – 40 trades each month are what you should aim for.
Research, Effort, Focus and Return
If you are putting your hard earned money on the line on forex trades, you should not take it lightly. We recommend researching the economy and market conditions in detail on a daily basis. If you are serious about making a profit, you should know the events that are shaping the price of currencies every day.
For every single trade you make, you should spend at least an hour researching the market and current affairs. Just as a sensible shopper spends time looking around the market before they make a decision to purchase something, a trader should be focused to get a good return on investments.
Don’t Go Overboard on the Number of Trades
Success in forex is a long-term process. Jumping in too soon with all of your capital will end in a very short career. You should not use more than 30% of your initial capital on investment during your first six months of trading, and never invest more than 50% of your capital throughout your career.
While you are still new and trying to learn, a single trade should not be more than 2% of your initial capital, regardless of how profitable the market appears.
Once you have made some profit, see if you can cash in and withdraw your initial capital out of the market completely so that you only use your profit for trading currencies in the future. The ideal situation is if you can get all of your initial capital out and rely completely on your profits for trading.
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