Forex Trading Tips 1
Forex trading is no longer a secret. Every person can learn to trade and every person (of a legal
age) can open a Forex account.
Until now (same as years ago) Forex traders keep making mistakes, recovering and just to find out that there are more challenges ahead.
Some people say that Forex trading is simple (many Forex brokers like to make traders believe that), while others argue that it is not, and all depend on the amount of money you put at risk.
Whether you are a beginner or an experienced trader, we would like to present you some trading tips to help you getting a grasp of Forex trading with its challenges and risks.
Tip 1: Gamblers should go to a casino. All nonproven and spontaneous actions in Forex trading are a part of pure gambling. Any try to trade without analysis and studying the market is like playing a game. Games are fun except when you lose your money!
Tip 2: Never invest money into a real Forex account until you practice on a Forex Demo account! You should pratice at least 2 (better more) months on a demo trading account. Consider this: 90% of beginners fail to succeed in the real money market due to lack of knowledge, practice and discipline. The remaining 10% of successful traders had been sharpening and shaping their skills on demo accounts for a longer time before entering the real market.
Tip 3: Go with the trend!
The Trend is your friend. You should trade with the trend to maximize your chances to make gains. Trading against the trend will not "kill" you, but will definitely require more attention,
nerves and sharp skills to reach your trading goals.
Tip 4: Always take a look at the larger time frame than the one you have chosen to trade
with because it gives you the better overview of market price
movements and helps to clearly define the trend. For example, when you are trading with 15 minute time frame, take a look at 1 hour charts.
In the same way: trading with 1 hour charts would require obtaining a picture of daily or weekly price movements.
If a trend in Forex is hard to detect choose a bigger time frame. Up and down market patterns are always present. Make sure that you know the main trend, unless you are a scalper. Scalpers have no need to spend their time studying large trends, instead what is happening in the market here and now (on 1-5 minute time frame) is their main concern.
Tip 5: Never risk more than 2-3% of your complete trading account.
One important difference between a successful and an unsuccessful trader is that the first one is able to survive under unfavorable market conditions, while an unsuccessful trader will lose
his account after 10-15 unprofitable trades in a row.
Even with the same trading system 2 traders can get opposite results in the long view. The difference will be again in how you handle money management. Have a think about it: losing just 50% of your account balance requires making 100% return to restore the original balance.
Tip 6: Blank out your emotions and trade calm.
Do not try to revenge after a losing trade and do not be greedy by adding lots of positions when you are winning.
Overreaction blocks a clear thinking and as a result it will cost you money. Overtrading can damage your money management and dramatically increase the trading risks.
Tip 7: Choose the right time frame for yourself.
Choosing sensibly means that you are comfortable and have enough time to analyze the market, place and close orders etc. Some people can not wait for hours until the price makes a
move, they like action and therefore prefer smaller time frames. For other traders 10-15 minutes time frames are confusing to be able to make the right decision.
Risk Disclosure: FX Trading Online will not accept any liability for loss or damage as a result of reliance on the information contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets. Currency trading on margin involves high risk and is not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.