BECOME A SUCCESSFUL FOREX TRADER – 20 TIPS FOR BEGINNERS
The Forex market is another form of the foreign exchange market. It is the process of exchanging a currency into other currency for several reasons, might be for trading, or tour. According to some recent reports from the Bank for International institutes, the turnover of the Forex market is currently at more than $5.1 trillion.
In the next section, we will see the basics of the Forex market including the elements of it. Therefore, you would know how overall activity in this market occurs and how you can make a benefit from the foreign exchange market.
Forex trading is all about profit and loss. A lot of traders take huge losses for the lack of experience and discipline. You do not necessarily have to be one of them.
We are sharing some tips & tricks for you traders. By following them you can discipline yourself and be a successful forex trader.
#1 DEFINE YOUR LIMIT. MANAGE YOUR RISK: HOW MUCH LOSS YOU CAN BEAR, HOW MUCH YOU NEED TO TAKE PROFIT
At first, you need to understand the market. And then, you should know your limits. And these two things are the most important things to become a good Forex trader.
Calculate your capability to take risks before trading. Allocate your money properly. Never rush on a trade.
Also, never miss an opportunity of profit. There’s nothing depended on luck here, calculate every possible things which are in your hands.
#2 PLAN EVERYTHING. AND, STRICTLY FOLLOW THE PLAN to Be A Successful Forex Trader
You need you ask yourself few question first, “
- Why are you trading?
- Is it going to be a full time thing for me or just a extra income source?
- How much time can you spend on learning everyday?”
- How much time & money are you going to spend for trial and error process?
Making things clear with yourself is necessary to set a proper goal. After you’ve decided all these, you set a schedule for you.
Allocate time for learning, for practicing. Make a plan for a long-term, and follow it properly. Most importantly discipline yourself.
Eventually you will be profitable, if you are able to maintain a strict plan patiently.
#3 CHOOSE THE BROKER THAT MATCHES YOUR NEED
Most of the beginners don’t even consider thinking much about this when they start trading. One should be extra careful and should judge everything carefully while choosing a broker.
A fake/unreliable broker can ruin all the money & time you invested. It is also important that your expertise level & goals matches with the services offered by the broker perfectly.
Evaluate these things before choosing a broker –
- Check if the broker you are choosing is registered with the proper regulatory bodies.
- What kind of client profile does the Forex broker aim at reaching?
- See if the trading software suits your expectations.
- Efficiency of the customer services.
- See reviews in online forums & communities.
#4 ACCOUNT TYPE: CHOOSE THE MOST SUITABLE ACCOUNT TYPE FOR YOU
Every broker on the market gives multiple account options. It may be confusing but you need to decide which one among them will serve you best.
You should choose one depending on your experience and knowledge about trading & leverage.
You should use a mini-account if you are completely new in trading. Cause mini account lessens your risk.
#5 FOCUS ON BEING A TRADER NOT AN INVESTOR
Start small, take low leverage, gain profit, grow big. That is the best way to start trading.
If you don’t know what you are doing, no mater how big your fund is you won’t be able to make profit. So, it is wise to go slow and steady while making little profit.
#6 FOCUS ON A SINGLE CURRENCY PAIR
In Forex market there are about 70 currency pairs. Understanding the behavior of different currencies is very difficult task.
So in the beginning it is wise to trade in one currency pair which you understand. Also, trading in your national currency is a good idea. If that’s not possible, trade in the most widely traded pairs.
#7 UNDERSTAND YOUR ACTIONS
Simply, a huge number of traders lost everything just because they didn’t try to understand what they were doing. Many people usually trades following rumors or indications heard from a random person.
Which will never get you anywhere, you are sure to lose money in this process. Don’t act if you are not aware of the positive and negative effects of your actions.
You should know probable profit and risks.
#8 DO NOT ADD TO A LOSING POSITION
No one can be certain about the Forex market. It is always uncertain where a currency pair will go within the next few hours, days or weeks. Analysts are able to make guesses about the market.
But, nobody can claim that he/she is 100% sure of his/her prediction. In Forex market future is always unpredictable. So, it is wise to not to add to a losing position.
You may have strategies which you can include in the primary plan to recover from loss, but it is unwise to add to a losing position.
#9 DEPRIORITIZE YOUR EMOTIONS
Personal emotions like – Greed, excitement, euphoria, panic or fear should be put aside from traders’ calculations. Being a human putting aside the emotions is very hard.
However you have to learn to control them. Otherwise the result will be disastrous. This is another reason new traders are often advised to start with small amounts.
If we are able to reducing the risk, we can calm our mind when trading and realize the long term goal, . Moving logically and less emotionally will bring great results in the long run.
We always have to have the mindset to bear losses if necessary cause, we should always be prepared to face the unavoidable situations.
#10 KEEP TRACK OF YOUR TRADES, YOUR PROFITS AND LOSSES
It is an established fact that people learn from their mistakes. So it is important to remember every step you take. Keep a written record if necessary.
It is not just about being expert in the fundamental and technical analysis of price trends. Analytical approach to trading begins at the very first step you take into the career. When you trade for the first time, it is possible you’ve made a mistake and didn’t profit.
So, it is important to keep record of that mistake and learn from it. A successful trader is all about avoiding mistake because he keeps track of his mistakes and realizes what works for him and what does not.
#11 TRADE AUTOMATION
We are not talking about using Forex robots who trades automatically. We are emphasizing on the necessity of controlling your emotions.
Forex Trading will give you a freedom of life, if you are successful here. And to be successful you need to get a hold on your emotions.
You need to make sure that you can act like a automated robot in time of crisis. If you let your handle your emotions take over in times of crisis you will be doomed.
You should always react to the market in a professional way. You should apply your learning & experience to face every situation, not your emotions.
#12 NEVER DEPEND ON FOREX ROBOTS
In your wonders, you will find several automated Forex Trading Software in the market. They trade automatically for you.
These products are absolutely unproven and illogical to use. If Forex robots are so accurate why are not the creator of this product are not getting billionaire by trading.
Don’t fall into these traps.
#13 KEEPING EVERYTHING SIMPLE
“Simplicity is the ultimate sophistication.”
~ Leonardo da Vinci
We highly suggest you to keep things as simple as possible. You are here to trade, you are not economic professor or a Financial expert adviser.
Keep your analytics simpler, don’t over-analyze, don’t get tensed. Keep you calm and move forward with your pace.
#14 HAVE PATIENCE, DON'T CHALLENGE THE MARKET
A beginner should not trade against the market trend. Forex is a huge market which is not possible to control or manipulate.
So don’t rely on any rumor and trade against the trend. Learn your methods & strategies, be patient & relaxed by going with the market trend.
Don’t let any tension grow inside you or fear of losing will destroy your career.
#15 NOTHING IS CERTAIN IN FOREX MARKET, UNDERSTAND THE PROBABILITIES
While you are learning you will eventually find out that nothing is certain in Forex Market. Every analyst can find out the best possibilities of the market trend.
You can never be 100% confident if the market is going to go up or down. Learn to find out the best probabilities and patiently follow your strategy to grow yourself.
There is always a risk of loss, it is no reason to give up. So, we suggest you to educate yourself about the market trend, minimize your risk and gain profit.
#16 BE YOUR OWN GUIDE, DON'T LET OTHERS MAKE CHOICES FOR YOU
Discussing & sharing your thought & ideas with others is great. Take suggestions from others, consider them but never let them guide you.
You should make your own choices. It is your money, so the profit/loss will also be all yours.
#17 LEARN ABOUT MONEY MANAGEMENT
If you keep learning, you will surely make profit after a certain time. Now you will have to make decisions to protect these money.
Here comes the Money Management. Money management simply means- minimization of losses and maximizing your profit. In order to keep growing you need to allocate your money properly, so you can reduce your losses.
No matter how much profit you make, if you are unable to reduce your losses you will fail in the end. So Money Management is one the most important thing in Forex Trading Career.
#18 MARKET STUDY: FUNDAMENTAL & TECHNICAL STUDY
This is a very important topic for all the traders. As this is an article for the beginners, we placed this topic at the bottom. We are not saying that the fundamental or technical studies is not necessary.
All we are saying is overcoming emotions, faulty money management are greater problems for the beginners.
One should focus on Fundamental & Technical Studies after he/she attains the proper attitude for trading and taking risks.
#19 GIVING UP IS NOT AN OPTION, IF YOU WANT TO MAKE PROFIT
It is true you risk only what you can afford to lose. But, determination and persistence are required quality for a successful trading career. You can not be a successful trader in short time.
It is necessary to be patient and sharpen your skills. If you are skilled enough to understand the market trend and able to indicate properly, you will be able to reduce your losses and increase profit.
Thus it will help you to create strategy and execute properly. You will grow even more and have a successful career.
We hope this article was helpful to you. If you could learn a thing or two from this article. We will consider our effort to be successful. Feel free to contact us for any information.