DotBig Forex Broker: How to Trade in High-Volatility Market Conditions

Online trading is beneficial and can bring you a frequent income, but it is impossible to run deals on Forex without a brokerage company. To trade popular market assets one should have a clear plan of action, which is very difficult to draw up on their own without the appropriate knowledge and experience. Thus, one of crucial aspects for profitable trading is the right choice of a trading company.

The best brokerage companies offer their clients an optimal set of trading tools. There is the DotBig broker among the top Forex platforms.

Understanding Market Volatility in Forex Trading

No trader can build a trading strategy without knowing the principles of market volatility and individual assets. The analysis of volatility in the Forex market is especially important.

The term “volatility” means the process of price changes for a particular currency pair. The nature of price fluctuations determines the entire trade. Thus, traders have the opportunity to profit from transactions.

Volatility does not have a “plus” or “minus” sign. If the price of a currency pair increases, the instrument shows volatility, if it falls — the same thing happens.

The level of volatility can be measured. To do this, the indicators for a certain period are compared. The result is recorded either as a percentage change or in absolute values.

With the correct interpretation of price fluctuations, the trader will easily determine the most suitable currency for trading, as well as find a point of entry into and exit from the market.

The Challenges and Opportunities of High-Volatility Trading

High volatility means a significant price change in historical retrospect. High volatility in Forex means that predicting future price movements becomes difficult to achieve.

Thus, to make a profit on Forex, you should choose a trading method and stick to it.

A well-thought-out method allows a trader to enter and exit the market without hesitation for a set period, making a profit. However, a user needs to understand that no one is immune from losses in the foreign exchange market. It all depends on the individual’s approach to trading and how seriously the market participant takes it.

Best Strategies for Trading in High-Volatility Conditions

Today, online trading uses several popular techniques that can be applied when working on the Forex currency market. They vary in the time it takes to implement them and in the degree of risk and potential level of profitability. Some of them are very simple for beginners and can bring the first income quickly enough, while others will take longer to master, but will bring an impressive income to the trader in the future. Let’s look at some working Forex strategies that can be used when trading with the DotBig exchange.

Breakout Trading Strategy

This is a popular Forex trading method based on determining rate breakouts from established ranges or consolidation patterns. Breakouts run when the price overcomes a significant support or resistance level with strong momentum and volume, signaling a possible continuation or reversal of the prevailing trend.

Scalping and Quick Trades

The most difficult trading technique is scalping. Scalpers are participants who seek to catch small movements in the market, regardless of whether the price is in a range or trending. They usually work on time frames below 15 minutes and distribute their risk among a large number of trades, as they usually open many more positions than other groups of traders. Users with many years of trading experience mainly choose this strategy when making deals with the DotBig Forex broker.

Hedging Strategies

Risk hedging is the opening of transactions in one market to offset risks in another market. The essence of the strategy is to open an extra position when a system entry point is formed on the chart, opposite to the already open stance.

Among the popular hedging strategies, it is worth mentioning full hedging (the user hedges the basic transaction), partial hedging (here a trader protects part of the basic position and insures against part of the risks), and classical type (the hedging position is opened after the basic transaction).

Trend Following and Momentum Trading

A trend-following technique is used in trending markets, as the name suggests. When the price is clearly in a bullish or bearish trend, the users, following the trend, enter the market. Waiting for the trend to continue, they tend to “ride the wave.”

Risk Management Techniques for Volatile Markets

Trading always comes with risks. And, risk management is an essential aspect of working in the Forex market.

DotBig Forex has an advanced tool set allowing its clients to effectively manage risks. The broker helps its clients to minimize possible losses in the online trading process.

How DotBig Helps Traders Navigate Volatile Markets

DotBig Investments company supports its clients by helping them navigate volatile markets. How is this achieved? Using tools such as Take-Profit, Stop-Loss, and Trailing Stop orders.

Stop-Loss

These orders close the transaction automatically when the market moves against traders, limiting potential losses.

For example, a trader can buy a stock and place a stop-loss order with a stop price 20% lower than the purchase price of the exchange. If the share rate drops to the point of 20%, a stop loss will be triggered, and the shares will be sold at the best price for the Forex participant.

Take-Profit

Traders need to manage the risks of their positions, but they cannot do this in real-time by constantly monitoring the market. Using technical analysis, they track the price growth opportunities of a particular asset to take advantage of it.

Besides, users work with take-profit orders to capture potential income. This order allows you to trade an asset since its price reaches the desired level (for example, based on previous analysis). Although the rate may not reach their chosen level, such a fixation allows you to make a profit that traders could have missed.

Trailing Stops

A trailing stop is a regular stop order that can be placed at a certain percentage distance from the current market price of a security. For a long position, the investor sets a trailing stop below the current market price. For a short one, it is higher than the market price.

A trailing stop protects profits by allowing you to keep a trade open and make a profit while the rate is moving in your favor. The order closes the transaction if the price changes direction by a specified percentage or amount in dollars.

Practical Tips for Trading Safely During High Volatility

Managing risk in Forex trading is not an easy task. Here are some tips to help a trader do the right thing:

• Consider your risk tolerance.

Forex experts usually recommend making risky deals from 1% to 5% of the total trading account balance whenever possible. However, it is better if the market acts based on individual capabilities and expectations.

• Evaluate each position correctly.

Since you understand how risky certain deals are, you can plan the size of your positions. It is important to maintain the correct balance. According to DotBig reviews shared by experienced traders, one of the best ways to ensure you control your risks is to adjust your position sizes in the first place.

• Set the period to conduct the transaction.

If you don’t plan to buy many assets, learn how to make deals yourself. Many markets are open 24 hours a day, so, decide how much time you want to spend trading daily.

• Track financial news

Financial news can also have a significant impact on the foreign exchange markets. Some of them, such as employment reports, inflation, or central bank decisions, can cause abnormally large fluctuations. Therefore, always be aware of the financial agenda.

• Don’t spend the money you need to live on trading.

It is usually said that you should never invest more than you can afford to lose. This statement has become so widespread that it is absolutely justified.