In trading Forex, no single strategy is 100% guaranteed to be safe and profitable every time. Risk and loss are integral parts of trading Forex. Both are impossible to avoid, but they can be controlled. Therefore, the secret of how to practice Forex trading for beginners and professionals is not about eliminating all risks. 

Still, traders must minimize the risk of trading Forex as much as possible. For this reason, we have compiled the following guide for you. Here are nine ways to engage in trading Forex safely and increase your potential profit.

1. Choose the Right Broker for Trading Forex

Choosing the right broker is a fundamental step in the world of trading Forex. This is vital, as only trusted brokers will provide all the features and services you need for trading Forex in a safe and lucrative way. Of course, there are multiple things to consider, both for beginners and professionals. 

These include the types of available apps for trading Forex, the choice of currencies in trading Forex, the spreads offered, and the potential profit. In addition, it is better if the broker you pick for trading Forex can offer minutes of price movements in the market. Together with a variety of other indicators, the availability of these features is key to obtaining low-risk trades.

2. Price Action

Understanding price action is one of the safest tips in the world of trading Forex. This step refers to the analysis and interpretation of the latest currency exchange rates. These figures can be displayed in a variety of forms, such as candlestick charts or lines. Price action is regarded as a representation of price movements in the market. By understanding price action in trading Forex, you can build the right strategy, including determining entry and exit points to get the best returns in trading.

3. Support and Resistance Levels 

The levels of support and resistance indicate the range of price movements of an asset in trading Forex. This strategy is quite common for both beginners and professionals who are looking for safe trading techniques. Support shows the approximate price point the value of a falling asset does not breakthrough. 

Meanwhile, resistance in trading indicates the estimated value a rising asset price does not exceed. This idea is fairly simple. Yet, by plotting these areas, you can determine the approximate price of the asset when trading Forex.

4. Breakout 

Breakout in trading Forex refers to the phenomenon when the price movement in the market exceeds the expected resistance point for the asset. Basically, when this happens, there is a possibility that the value will continue moving in line with the trend observed while trading Forex. Therefore, you should always consider the possibility of a breakout when trading Forex.

5. Use Fibonacci Search for Safe Trading

Fibonacci search is helpful in trading Forex, even for beginners. It prioritizes the analysis of asset price movements over a certain time period in the past. The foundation of this technique for trading Forex is the Elliott wave theory, which states that large waves of price movement will always be followed by small waves. It is taught to newbies, and anyone can use this pattern to accurately predict the real value of an asset in the future.

6. Follow the Trend 

This approach is suitable even for beginners, especially when trading Forex in the long term. To be able to apply this trading Forex strategy, you must rely on analysis of the value of your currency. If it tends to be quite popular, has high volatility, indicates a high level of global use and support from central banks, a trend-following strategy in trading Forex can be your key to profit.

7. Price Corridor Technique

In trading Forex, the value of certain currencies may show a steady tendency to move within a horizontal range. This phenomenon can be observed when the value has never been bullish or bearish, which would change the pattern of price movements to diagonal. If you find the corridor pattern while trading Forex, you can easily predict the next currency value. As you can see, this strategy for trading Forex is quite easy to master, even for beginners.

8. Observe Central Bank Policy

The next tip for trading Forex is to observe the policy of the central bank. This recommendation stresses the role of the institution as the local financial regulator. Its policies have an impact on the exchange rate of the currency concerned. 

Some measures that can have an impact on trading Forex include interest rates, sanering, currency distribution rates, and other steps. Every new policy provokes a reaction from financial actors, including speculators. Thus, it also has an impact on currency exchange rates used in trading Forex.

9. Use a City Sentiment-based Approach

In a sentiment-based approach, traders believe that every movement of currency values ​​in trading Forex is controlled by big players or bookies. The existence of several bookies holding significant amounts of particular currencies can encourage changes in their exchange rates in the realm of trading Forex. 

Unfortunately, unlike the world of stocks, trading Forex does not allow you to predict such changes easily. You can only rely on short- and long-term net sales reports for trading Forex. These documents are generally issued by a country’s futures trading commission, such as CoFTRA in Indonesia.

This type of report does not provide information on the initial and final value of a currency in trading Forex. However, individuals engaged in trading Forex can at least find out the pattern of the city’s movement. This lets them plan their next steps in trading Forex. 

Conclusion

It is impossible to find a 100% safe and profitable method for trading Forex. However, by relying on the nine ways we have described above, you can at least reduce the existing risks and increase your profits. These methods will help you foresee multiple risk factors, from currency conditions, regulatory policies, and market conditions to the strategies of Forex traders themselves. This will improve your chances of trading Forex safely and profitably.