Today I want to share with you some of the tips that I have found to be really useful to me in my career as a forex trader. Some of them may seem simple or obvious but you would be surprised how much they make the difference between making a profit or losing out on a trade, so here they are:
Tip #1 Don’t open a trading account with just the minimum amount
Many people just coming into forex are enticed by the low amounts required to open a trading account and the huge trades they can control with just a fraction of their deposits. What most traders don’t know is that the forex brokers who open these accounts also have goals in to meet in terms of getting as many accounts open to have more people in their account.
You would be better of starting with a fairly large amount then having a series of small trades over a period of time.
Many people just coming into forex are enticed by the low amounts required to open a trading account and the huge trades they can control with just a fraction of their deposits. What most traders don’t know is that the forex brokers who open these accounts also have goals in to meet in terms of getting as many accounts open to have more people in their account.
You would be better of starting with a fairly large amount then having a series of small trades over a period of time.
Tip#2 Don’t just buy any forex software out there
While we all dream of finding the super smart and efficient software that will know when to make the right trades and to it, this remains largely a dream. I am not saying that there are no good forex trading or signal software out there, all I’m saying is no software is 100% effective. So when you come across some new software promising you overnight success take your time to find out what experience others have had with the software. Ignore the pressure to buy now or the hype on the sales page.
Also I have found that a lot of the really good software I used I learned about by word of mouth or on a online forum.
While we all dream of finding the super smart and efficient software that will know when to make the right trades and to it, this remains largely a dream. I am not saying that there are no good forex trading or signal software out there, all I’m saying is no software is 100% effective. So when you come across some new software promising you overnight success take your time to find out what experience others have had with the software. Ignore the pressure to buy now or the hype on the sales page.
Also I have found that a lot of the really good software I used I learned about by word of mouth or on a online forum.
Tip#3 Keep a log of trades
This may seem like a big hassle but believe me you will find it to be worth it in the long run. There is nothing quite like understanding what you did right on a successful trade and seeing where you went wrong so you can avoid it next time. I believe this is one of the first steps to understanding your trading technique.
This may seem like a big hassle but believe me you will find it to be worth it in the long run. There is nothing quite like understanding what you did right on a successful trade and seeing where you went wrong so you can avoid it next time. I believe this is one of the first steps to understanding your trading technique.
Tip#4 Have a trading plan
I have found that it is always good to have a trading plan especially in the heat of the moment. Success in forex trading is more of a series of actions or trades than just one big trade.
I have found that it is always good to have a trading plan especially in the heat of the moment. Success in forex trading is more of a series of actions or trades than just one big trade.
Tip#5 Don’t trade too large for your account size
This is a sure way to kill your account by having large trades placed with a small balance in your account. It usually results in fluctuations in your account balance that make you even more nervous. When you win on trades this might not seem like such a bad thing but when you begin losing your concentration and ability to thing straight will be hindered.
This is a sure way to kill your account by having large trades placed with a small balance in your account. It usually results in fluctuations in your account balance that make you even more nervous. When you win on trades this might not seem like such a bad thing but when you begin losing your concentration and ability to thing straight will be hindered.
Tip#6 Avoid picking bottoms or tops
It is tempting to think that you are so good at trading that you can always find the point where trade turns around on a currency pair and finding that point certainly makes you feel good but most of the time it you will pick the wrong point and will keep trying to find a correct position. This is another sure way to deplete your balance quickly.
It is tempting to think that you are so good at trading that you can always find the point where trade turns around on a currency pair and finding that point certainly makes you feel good but most of the time it you will pick the wrong point and will keep trying to find a correct position. This is another sure way to deplete your balance quickly.
Tip# 7 Make use of stop losses
When most traders become very good at calling the trades they seem not to see the need for stop losses but the truth is no one is perfect, its just good business sense to have a stop loss on your trades to protect you from facing unrestrained downsides on your trades.
When most traders become very good at calling the trades they seem not to see the need for stop losses but the truth is no one is perfect, its just good business sense to have a stop loss on your trades to protect you from facing unrestrained downsides on your trades.
Tip# 8 Avoid adding to losing positions
If you find your trades to be in losing positions avoid the urge to add to them as this will only increase the rate of your loss as the market continues to go against you exposing you to greater and greater risk until you are eventually wiped out or close out on a big loss.
If you find your trades to be in losing positions avoid the urge to add to them as this will only increase the rate of your loss as the market continues to go against you exposing you to greater and greater risk until you are eventually wiped out or close out on a big loss.
Tip# 9 Don’t over trade
Sometimes there isn’t much going on in the market in terms of trades you can make. It is okay not to trade, really you don’t have to make a trade for the sake of it or possibly expect to catch all the trades.
Sometimes there isn’t much going on in the market in terms of trades you can make. It is okay not to trade, really you don’t have to make a trade for the sake of it or possibly expect to catch all the trades.
Tip# 10 See the big picture
While trading over a given time frame is valuable it is important to keep an eye on the charts to understand the larger trends on how the market is moving even as you make your short interval trades you keep a much clearer perspective. I have found that trading with overall trends increased my odds of success.
While trading over a given time frame is valuable it is important to keep an eye on the charts to understand the larger trends on how the market is moving even as you make your short interval trades you keep a much clearer perspective. I have found that trading with overall trends increased my odds of success.
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