ESTABLISH A SOLID TRADING STRATEGY
A well-defined trading strategy is crucial for success in currency pair trading. With a starting capital of $1000, it's essential to minimize risks while aiming for consistent gains. Here are some key aspects to consider:
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Technical Analysis: Use charts and historical data to predict future movements. Common tools include moving averages, support and resistance levels, and various indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD).
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Risk Management: Implement strategies to protect your capital, such as setting stop-loss orders to limit potential losses on each trade. The general rule is to never risk more than 1-2% of your trading capital on a single trade.
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Diversification: Avoid putting all your capital into a single currency pair. Spread your investments across multiple pairs to reduce the impact of a poor-performing trade.
