Forex has caused massive loses, substantial misfortunes to many inexperienced and undisciplined traders over the past years. Forex Broker FX thinks that you no need to be on of the above loser. So today we will give your twenty Forex Trading Tips that will encourage you to become an experienced Forex Trader in the currency exchange market.
1. Understand your needs, know yourself, define your risk tolerance
To make profits regularly, you must first recognize the markets. To identify the market, you must realize yourself. The first step of gaining self-awareness is ensuring that your risk tolerance and capital allocation to Forex and trading are not excessive or lacking. That means you should analyze your own financial goals.
2. Plan your goal, then stick to the plan
Once you know what you want from trading, now you must create a time frame and a working plan for your trading career. A time frame for the demo and error process will inevitably be an essential part of your learning? How much time can you devote to trading? Do you aim at financial independence, or merely seek to generate extra income? These are some questions that should answer at this stage.
3. Carefully choose the best broker
Many new Forex traders skip this part. Selecting a better Forex Broker is an essential task in your Forex career. What kind of client profile does the Forex broker aim at reaching? Does the trading software suit your expectations? How efficient is customer service? All these must be carefully scrutinized before even beginning to consider the intricacies of trading itself. Please refer to our Forex broker reviews to find a reliable broker that suite your trading style.
4. Pick your account type, and leverage ratio following your requirements and desires
After choosing a Forex Broker, your next step is to select the account type. Choose it with your needs and expectations. And then is the account leverage. The general rule is that lower leverage is better. If you pose a good understanding about account leverage, then you can select a standard account, but if you are a beginner, you better go for a micro account. In general, the lower your risk, the higher your chances.
5. Start with small amounts, increase the size of your account through trading, not by depositing.
First of all, there is no justification for the idea that a larger account will allow greater profits. So its best to start with small sums and low leverage. If you can increase your account by trading and profiting, it’s perfect. If not there’s no point in depositing to account and wasting them.
6. Focus on a single currency pair, expand as you better your skills.
There are many currency pairs in the Forex market. So its harder to get in touch with all the kinds of financial activity that goes on in this world. It’s better to stick with just one currency pair which we understand better at the beginning. After gaining some experience, you can trade with more currency pairs.
7. Do what you understand
Most new traders skip this principle. So they lose mostly. In general, if you’re unsure that you know what you’re doing, and that you can defend your opinion with strength and vigor against critics that you value and trust, do not trade. Do not trade with rumors. Also, don’t act till you are sure.
8. Do not add to a losing position
While this is just common sense, skipping the principle, or carelessness has caused disasters to many traders in there Forex trading history. No one knows what happens to a currency pair during the next few hours, days, or even weeks. Experienced traders can guess what happens, but no knowledge of where the price will be a short while later. We don’t know anything about the future. So there can be no point in adding to a losing position unless you love gambling. A position in the red can be allowed to survive on its own following the initial plan, but adding to it can never be an advisable practice.
9. Control your emotions
Most of the new Forex traders fail to do this. So they end their Forex career too soon. Greed, excitement, euphoria, panic or fear should have no place in a Forex trader’s mind. But we all are human beings; we all have emotions. But we must control these and minimize their effect on our lives. That’s why we advise starting with small amounts.
10. Study your success/failure by taking notes
A successful Forex trader always keeps a diary and take down his trading activity, either success or failure. So that he can avoid making the same mistakes and find out what works and what does not. This is one of the most critical factors in Forex Trading Tips that you need to follow.
11. Try to automate your trading
First of all, this is not about using Forex robots and other technical strategies. This means that make the same responses in similar situations and trading scenarios. So we can minimize the role of emotions. Let your reactions follow a studied pattern.
12. Avoid using Forex robots
These seem to be popular these days. Most of the inexperienced traders try to use these, and they will lose eventually. Let’s think about these robots like this. If the creators of these robots are brilliant and experienced traders, why will they make and sell these kinds of robots? If they are smart, they could gain profit by trading. Its simple as that. So avoid using Forex trading robots.
13. Your trading plans and analysis should be readily understood and explained
You don’t want to be a mathematical genius, or an economics professor to acquire wealth in currency trading. Instead, clarity of vision and well-defined, carefully observed goals and practices offer the surest path to a respectable career in Forex
14. Don’t go against the markets
As a Forex trading beginner, you should not trade against the trends, or pick tops and bottoms by betting against the main forces of market momentum. Join the patterns and relax your mind. If you try to fight the trends, constant stress and fear will wreck your career.
15. Understand that Forex is about probabilities
You should understand that Forex is all about risk analysis and probability. There are no methods that will generate profits all the time. Therefore the key to success if minimizing the loses and increasing the profits.
16. Be patient and do not fight the markets
Recognize the reasons for your failures. Try to reduce the failures even if they can’t be eliminated. Resist the illusions that you are the greatest Forex trader of the universe. Else your Forex career will ruin eventually.
17. Share your Experiences
It’s a great idea to discuss your experience and opinions about the market with others. But keep in mind that you are the one should make your decisions. Consider the views of others, but make your own choices. It is your money after all.
18. Learn money management
After we gain some profits, you should protect them. This is money management. It’s about the minimization of losses, and maximization of profits.
19. Study the markets, fundamentals, and technical factors
You may wonder why this factor is in the lower part of the list. You should first practice to minimize the risk and control the emotions that we talked above. The analysis is necessary, but only after a proper attitude to trading and risk-taking is attained.
20. Do not give up
Mastering currency analysis and Forex trading take time. It is highly unlikely that you will become a trading genius overnight, therefore sharp your skills, and the development of your talents before giving up.