Trading has caused huge losses to many people, both new and experienced. And forex is not an exception. You can easily lose your account in a day if you’re not careful to make trades. This is where forex trading tips come in handy.
Furthermore, you can find countless information on the internet about forex. You’ll easily get lost and confused, giving you the impression that forex is not for you.
Instead, the best thing to do is taking it simple and slow. And you can start with our 7 simple forex trading tips that will surely work for you.
Here are your Best Forex Trading tips:
Basic Forex Education
This is a no-brainer for every people who want to enter forex. Knowing how to buy or sell a currency pair is not your basic education. If you want to learn to trade forex, there are countless courses that are complete and organized out there. You’ll gain deep knowledge about trading and other relevant topics step by step. You need to have a solid understanding and a solid foundation about forex before jumping right into trading.
Money and Risk Management
The best currency trading tips you should know is managing your money and risk. If you don’t follow any proper money/risk management, you’ll blow out your account faster than making a profit. That’s why you need proper risk control when forex trading.
Overtrading and higher leverages are the common reasons why traders lose their accounts. The best rule is to only risk the amount you can afford to lose. Set a good money management method to survive.
While money/risk management doesn’t guarantee you profit, it will help you to survive longer in forex. The sooner you learn it, the better.
Learn your Trading Strategy and Stick with it
The biggest mistake beginners can do is changing their strategies over and over again. Jumping from method to method won’t help you find the holy grail that promises wealth. You need to learn and master a strategy your best comfortable with.
Switching other methods won’t do any good either just because you’re having losses. Any strategies have a certain amount of losses, and this is part of trading. Don’t let it affect you if you keep losing trades.
Higher Time Frames
One of the best forex advice for newcomers, try trading on higher time frames (Daily Chart). Many traders think that they would find more opportunities on a lower time frame and earn more profit. But that is not always the case.
Trading more frequently increases your risk. The price action of a lower time frame is confusing, making trade setups more complicated. With higher time frames, you’ll get clearer price action and it’s easier to determine a trade zone.
Use a Stop Loss
Using a stop loss is a requirement for a new trader. But most beginners get so scared of losing money and place. A close stop loss won’t save your money, rather it will hurt your balance. Using a fixed pips stop loss is a bad idea. Follow price action and give the stop loss some space. A small lot size is ideal if you’re scared of losing money. In addition, never move a stop loss further away once the market tries to hit it. Don’t worry about the losses.
Don’t expect to close 80% of your trades profitably or turn a $200 trading capital into a $10,000 in months. With these kinds of expectations, you’re simply living in a fantasy world. Not meeting your expectations will only leave you disappointed and frustrated.
Instead, set a realistic goal. Look at things realistically right from the start. Ask yourself some questions like how much time you can spend on trading and learning. When you have a crystal clear view of your trading tools and conditions, you’ll find it easier to work towards a profitable strategy.
Control Your Emotions
Emotions are traders’ number one enemy. Greed, excitement, euphoria, panic, or fear should have no place in your strategy. However, we are just human beings and we can’t completely get rid of them. So it is obvious that we have to find a way of living with these emotions. Try to control and minimize their effect on your life. This is why traders should start with small amounts. With this, you’ll have smaller risks and the impact of emotions on your trading choices is small.
Logic and less emotional intensity are the best forex trading tips necessary towards a successful forex trading journey.
Sure, trading is not easy in general. But once you apply these forex trading tips, you’ll eventually find trading rewarding.
What matters most is to never give up when things are moving against you. It’s up to you if you want to be successful.
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