Everyone who decides to enter the forex markets should realize that education is the first and foremost step toward success. It is extremely important to know the basics of forex trading, however the foundation of trading is hardly enough to start earning any money. To become profitable forex trader you will have to learn much more than just the basics. To make things even worse – a constant “updates” of your knowledge is required in order to continue the success trend.
What exactly is forex education anyway? There are tones of free and paid material on the net and offline. Start reading ebooks, join the forums, talk to other traders, sign up for online webinars, seminars, trading courses and even get a professional forex mentor. Whether you should get a paid assistance is entirely up to you. Overall, it is possible to do it on your own, however this way requires a lot more time, patience and understanding towards mistakes being made.
Once you know what trading is all about, here are some other tips to help you move on:
- Learn all there is about fore trading and technical indicators
- Never invest more than you can afford to lose.
- Develop forex strategy to fit your trading style and practice it via demo account.
- If your strategy is proven to be successful for several weeks over demo account, you can switch to mini accounts.
- Keep journal of your trades and emotions involved. In order to control the emotions, it is important to identify them and what is a trigger.
- Don’t count each trade. Some trades are winners and some losses. You have to look at the big picture instead of focusing on every trade separately. After all, if after couple of months you made profits, you are doing everything right!
- Always use stop/loss.
- Invest time in searching for the right forex broker and good trading platform. If you want to succeed in forex, it is important to find reliable trading platform. What kind of platform and broker you choose depends highly on your own trading style. Figure out what kind of a trader you are, what is your investment capital and what are your objectives in forex. Some platforms are more use-friendly then others, some are web-based while others are download, some have hidden trading fees while others charge for each withdrawal, some require a deposit of at least $500 while others offer mini accounts with $1 deposit requirement. To summarize, do the research and find whatever is best for you!
- Never enter a trade with fear or greed. If you are not sure about a particular trade, don’t enter it. This chance might pass you by, but don’t you worry. There is ALWAYS another profit possibility right around the corner.
- Stay away from overtrading, revenge trading, greed trading, sloppy trading etc.
- Double check everything before you make an order. Sometimes the time is right, but you mix up and press on the wrong button! Clumsy fingers happen to everyone once in a while!
- Don’t try to copy others. Every trader is different and therefore it is crucial for you to create your own trading plan based on your own trading style.
- Be very careful when it comes to leverage. Understand the consequences of using high leverage with small funds account.
- If you are a beginner in forex trading, leave news releases alone for now. Trading news is a very difficult task and is avoided by many traders. The market is extremely unpredictable whenever a big news release comes out. You can win big, but you can also clean up your whole account within seconds.
- Discipline yourself. Stick to your trading system, no matter what.
- Learn charts and mapping. Even if your forex broker supply you with a charting platform, it is important to understand the charts and be able to interpret them.
- Don’t jump around from one idea to another. Just because your strategy isn’t working right doesn’t mean that you should start looking for a new one. There is no need to jump from one system to another. Stick to one trading strategy and learn to trade with it well. Improve it, backtest it and work it inside out until you can believe in it 100%.