Want to Be a Forex Trader? Here Are 12 Top Tips
1. Read Forex Book Trade Forex From Home before you do anything else. It
covers a bit about everything so you can find out if Forex is for you. If
you open a Forex trading account and haven’t read the book and end up
losing a load of money, don’t come running back.
2. Which leads me on to point no.2 – BE PREPARED with all things regarding
Forex trading. From your desk space, to your computer, your Forex
strategy, reading and practise.
3. You MUST have a stop loss policy. Even if its a mental stop loss – you
must have one and be prepared to exit the trade immediately if this level
is hit – no excuses!
4. A Forex trading plan/system. You MUST have one and you MUST stick to
it. Practise with paper trading and then a demo account first to gain
confidence and skill with this. It does take some time but you have to
trust your skill and judgement, which WILL grow.
5. With Forex, trade with the trend – DO NOT trade against it. If you are
waiting for a reversal pattern to form on your Forex chart, wait until you
have confirmation of a change in the direction of the trend BEFORE you
open a position.
6. The Forex market is rarely your friend if the trade goes against you.
Cut your losses quickly (go back to point 3) and accept them as a cost of
trading – nothing more, then move on, forget about them.
7. With trading the Forex, learn to sit on your hands and not trade!
ALWAYS look for good quality trades – the ones with high probability of
success. A day without a trade is better than a day with one trade which
looses you money. If you don’t like the look of the market, the charts or
if the day is full of economic announcements which you know will make the
market unstable, then walk away.
REMEMBER: The most successful traders are those who LOSE THE LEAST NOT
MAKE THE MOST.
8. Make sure you stay in profitable trades until your exit strategy comes
into effect. In this case its good to adopt a trailing stop of say 10/15
pips away from the current price level (depending on which currencies you
are trading). Maximise your good Forex trades by letting them run.
9. Learn about Fibonacci levels and how to apply them to your Forex
10. Keep you Forex trading plan simple. Do not have too much information
on your screen – it will only confuse you and make the decision to
enter/exit a trade a whole lot harder.
11. MONEY MANAGEMENT, MONEY MANAGEMENT, MONEY MANAGEMENT! Be prepared –
understand it. (go back to point no.2) NEVER risk wiping out your account
– it can happen.
12. Forex trading isn’t an exact science. Do not set yourself false
targets and associate any emotions when trading. Do not ‘expect’ a trade
to go in your preferred direction. Trade what you see and if you are wrong
then that's just how it goes – move on to the next. If you think about
trading in probabilities then you will be bale to handle to losing trades
more effectively. Probability says you won’t be successful every time –
As long as you keep your trading in perspective and enjoy your time away
from Forex you are doing everything you can to build a lucrative future
trading this vast global market