Thinking about opening your next trade? There are many things to know when starting to trade Forex. These 10 financial trading tips could help you get the most out of the trading opportunities you are about to meet. Read them carefully before you start trading.
1. Build a Forex trading plan, and stick to it
Every good trader needs a trading plan. All traders build their own trading strategy, depending on their goals, a definition of success and amount of time they dedicate to trading. Traders with more time may adopt a day trading strategy, while others might prefer longer-term positions. Whichever trading style you adopt, stick to your trading plan. Many new traders switch approaches when they experience losses, however, one or two losing trades don’t necessarily mean that your system isn’t going to be successful.
2. Get into it gradually
This is probably the most important trading advice you could get. The majority of newbies start by opening many trading positions simultaneously, without the ability to track them all. Following too many currency exchange rates at the same time can lead to a hard time following them. Focus on a single currency pair as a start. Try to focus on fewer trades. Start with the euro-dollar or another major pair. Pick your trades more carefully. It will reduce your financial risk and you will have a greater opportunity to learn from your trades. Experience is a key factor to improve as a trader.
3. Manage your money and risk taking
The idea is to cut your losses short and let your outcomes fly. How? A serial of self-rules would help. Don’t use high leverages, "listen" to market trends and to try to go against them. Always set a stop loss, don’t risk more than 10% on a single position, and last, don’t become greedy!
4. Do not forget to set your Stop Loss!
The high financial risk is a key reason for heavy losses. Forgetting your stop loss is the single biggest cause of losses. If you wish to shrink your future losses, use Stop Loss wisely in all your open trades. Setting a stop loss is part of your financial planning. Using it will prevent your losses from getting out of control when the market goes against you.
5. Keep an eye on your profitable trades
Don't turn your winning trades into losing trades. While your positions perform well-showing profits, and the market is acting on your side, you need to watch them closely. To secure your trades, move your Stop Loss to your entry point or even further. Keep moving it forward in the trend's direction. This action will prevent your investment from slipping into losses if markets reverse and going against you.
6. Doubt yourself? Follow an expert
FX MarketLeaders' experts spot live market opportunities on a daily basis and present them to our community. Anyone can use and exploit them. Follow FX MarketLeaders free Forex signals, and explore our trading strategies on all the top currency pairs.
Another great option is to join OpenBook investment network, the largest online Forex network in the world, which connects you with the entire eToro's trading community. Trading social with the OpenBook system lets you not only to follow all of the trading activity taken by the top traders in the community but to copy the trades of any trader you want with a single click on your screen.
To sum, if you feel like lack of experience, or still not ready to take decisions like a professional trader, copy others and turn their success into your own profit.
7. Restrain your emotions
The more automated your trading will be, the better chances you will turn into a winning trader. Just like in real life, many times we execute trades out of greed, panic, excitement, euphoria, and revenge. Forex investment is about probabilities and analytics, so stay calm and drive on your automatic motion and increase your chances for a profitable trade.
8. Keep informed
Start following the economic and political news, releases and announcements, as they play a big role. they are very influential on the currency exchange rates. The financial market is drawn from nonstop live news, so look for news centers and calendar features on your trading platform, as well as other fundamental tools that your broker might offer.
Following other trading portals, reading Forex blogs, looking for relevant articles and be tuned to the economic news channels can be also very useful.
9. Don't Waste your Time or energy On Losing Trades
Remember that in case of losing trades, it is usually better to cut losses and save your energy for the next trades. We know that it is not easy to give up on your positions but the best trading advise on this subject is to move on, and not to let your trading is affected by emotions. The financial market is full of profitable trading opportunities, just waiting to be utilized, so leave your losing trades behind and concentrate on your trading plan.
10. Choose your broker carefully
Every trader is affected by his trading environment. The idea is to find a reliable broker that suits your needs as a beginner. For example, you do not want to open an account with an unregulated broker. Other important issues are the quality of his trading software and the efficiency of the customer support. Do they suit your expectations? To learn more on this subject read the definitive guide on how to choose the right broker.
Your broker can be the difference between a good kick off and a great kick off. Visit our broker reviews to find the ideal broker for you.