Art and science are not that different when coming to Forex trading, a bit of both is included, from numbers to talent. As in every art, talent is not enough. Practice helps develop the skills and consistency is a key. You need to check yourself, reflect and analyze to know what works more and what less. I gathered a few Forex trading tips for the beginner trader about how to become skillful in your art. For the more experience traders this can help you prefect your trade and make you more profitable.
Make a plan
A good trader needs to have a defined plan. Have defined goals and choose a trading style that works with those goals. The destination is very important for the voyage; it helps you know how to plan the road to get there. When you have a goal you need to make sure that your trading method will work in favor of reaching this goal. Each plan you make will have different factors for your risk management and your approach of the market. You have to make sure that you personality fits with your chosen trading style – if it’s hard for you to leave an open position maybe you shouldn’t trade during the night. If you try to trade in contrast to your personality you can become very stressful and will probably lose some money.
In order to be successful you need to choose a methodology and stick with it. You have to have an idea of how the decisions will be made and how to make your trades. You can follow analysis or an expert trader; you can also look at some company’s fundamentals. Whatever you do, you need to be consistent and stick with what methodology you choose and make sure it’s adaptive.
Choose the right time frames
Sometimes traders can get confused when looking at the Forex trading charts and going from time-frame to time-frame. The weekly Forex chart is very different from the daily Forex chart and what looks like a buying option in the weekly chart can actually be a sell in the daily chart. What you should do is simple synchronize then and look at both charts to confirm before entering the market.
Make focused trading choices
Once you put in money you should remember that this is not a game. This money is at risk and you shouldn’t put in more than you got, I mean you still have to pay your bills and buy food. The money you put in the market should be your “play” money – put just as much as you can and no more. This way you can accept when you lose, don’t be a sore loser. This will put your strategy at ease and will make you more focused so you can be more successful. Counting your money and being afraid of losing all the time will not help you.
Several practical Forex tips:
Try the market first with a demo account. Most brokers have this option and it’s very important for new traders to try it out and make mistakes with fake money before putting real money for trade. You can sign up for a real account when you feel your trades are good on the demo.
Mange your risks properly. You should use only 2% of your funds per trade and watch the stop losses. Invest only some money in some trades and then watch and wait. You need to make sure to always have enough money to cover if you loss.
As long as your position is open, you haven’t lost. Remember that you can always wait and not take the loss until you choose to.
If you don’t have enough money to cover the duration when you loss, the order will close automatically. Keep a close eye and don’t make this mistake.
Choose the best Forex brokers. Find a reliable broker that suits you needs. For example- unregulated Forex broker is a bad idea. Customer support and the quality of the trading software is also important.