Learn how to get started in Forex trading and start walking the path to success.
The foreign exchange market attracts more and more new traders worldwide, offering great opportunities and real advantages that are relatively affordable. However, the profits that come from trading can truly be earned only through significant experience, enormous self-discipline, and very hard work.
Below are some useful tips to escape the pitfalls of the currency market and reveal the potential of novice traders.
1. Get Basic Forex Knowledge
First, it is essential to have a basic understanding of currency markets and macroeconomic variables that influence market fluctuations. People become successful traders by learning to build on their success over a long period of time. Experience in Forex trading is the result of time spent on training, knowledge and understanding of the foreign exchange market. Certainly, the main objective is to achieve profitability. However, to conquer it, the beginner will have to learn a lot. Fortunately, anyone looking for useful knowledge can easily find it in the Forex Guide.
2. Set tangible trading goals
After you acquire the basic knowledge of Forex, it is essential to set realistic trading goals. Once you know what you want from trading, you should systematically set a time frame and work plan for your trading career. When you have clear goals, it's easier to stop efforts when risk/return analysis doesn't guarantee a profitable outcome.
3. Define a clear strategy
The next essential step is to define a trading strategy that works for you, something that suits you. It doesn't matter if you are a technical trader or a fundamental trader, or a combination of both, the most important thing is to work on a strategy that doesn't take all day and night to execute. What's the point of having a really good system that makes you a lot of money, but requires you to sit in your office all day, glued to the charts? Make sure you find what works for you, what suits your style and personality as a person and as a trader.
4. Use stop-loss
If you don't have time to monitor the markets all day, it's best to manage your risk and protect potential profits through stop and limit orders, which take you out of the market at the prices you set. Trailing stops are especially useful as they track your position from a distance as the market moves, helping you to protect profits in the event of a market reversal.
5. Never risk all the money you have
Learn to manage your risks. Your deposit is the engine of your business: if you lose it, you go bankrupt. This is why you should not risk more than 5% of your deposit per trade under any circumstances. Always keep in mind the financial management ratio or risk/reward ratio for each trade you take on. If a trade has 100 pips of potential and you enter it with a stop of 30 pips, then the money management ratio is 100/30 or positive 3.3 to 1. The higher the financial management ratio, the better you do. Everyone has losses, that's part of it. But even with a 50% success rate and a proper financial management ratio, your account will pay off.
6. Control your emotions
The truth is that novice traders are more prone to emotions. They can be too sure about a given trade, "diving in" it and forgetting proper risk control. Emotional traders think of money as their provider of security and power, and when they lose it, they often do it wrongly and recklessly. Newbies are often paralyzed by failure rather than limiting their losses and exiting the losing trade quickly, moving on to the next one. To detach yourself emotionally when trading, start by trading small amounts of money. As you trade, you can increase the amount traded, gradually expanding your comfort zone.
7. Evaluate your performance monthly
Assess your negotiation skills at the end of the month or year. Don't judge your business success or failure in just one negotiation. You need to prove yourself to yourself in a long time span, don't think about the end result every time you close your positions. Make several trades and only then analyze the final result. A winning strategy can give you 10 consecutive losing trades with a loss of -15 pips, and a successful trade with +300 pips profit per month, and over the course of a year, such a strategy can yield a net profit of +2000 pips. . However, if you only judge her on the bad days, you may give up too soon.
8. Choose a reliable Forex broker
Choosing the right broker is half the battle, it is impossible to overestimate the importance of this choice. So, you need to pay attention to the following points:
- Take your time to review analysis and recommendations.
- Make sure the broker you choose is trustworthy and matches your trading personality.
- Remember that a fake or untrustworthy broker can invalidate all your winnings, but it is equally important that your skill level and trading goals match the details of the offer made by the broker.
- What is the customer profile that the brokerage firm aims to reach?
- Does the trading software meet your expectations?
- What is the efficiency of the services offered to the customer?
- All these details should be carefully investigated even before contacting the broker.
9. Get and analyze your trading journal
One of the most effective tips for better trading is to not only keep a trade journal, but also read it and act on it. The purpose of a trading journal is to build trust in your trading system. When you trade with confidence, you are able to trade objectively. By taking detailed notes about your trading arrangements, the emotions you feel when you enter, manage and exit the trade, track market activity and profit/loss, you can highlight what works and what doesn't.
10. Use longer time intervals
One more thing that every trader can do to improve their trades without much additional effort is to switch from trading on smaller timeframes to larger timeframes. Many traders have the mistaken idea that they will find more trading opportunities in a smaller range and that they can make more money, but the reality is the exact opposite of this. By “longer time intervals” we mean intervals of 4 hours or more; any chart of less than 4 hours is considered a “shorter time range”. 1-hour charts can be useful for more experienced traders looking to refine their entry or exit, but they are still considered a smaller time frame and should be avoided by novice traders.
11. Continuously improve
The last but not least advice for absolutely all traders is to improve trading and seek knowledge on an ongoing basis. Remember that no one is born successful, but learning and practice both lead to high profits in Forex trading.
0 Comments:
Post a Comment
Your comment and facebook share will be appreciated