Forex 10 Best: Tips for Beginners
Forex best tips: there are no limits
to where you can go and what you can do
Forex best tips are nothing else but the lessons we’ve learnt during the many years of trading Forex. Being a beginner or not in Forex markets you may find below some ‘food for your thoughts’ . We have limited the list to ten tips but it could go on for much more tips – please leave your comments and tell us if you agree/disagree with us.
1. Learn the basics of trading Forex
Obviously, you may say ! It is obvious however way too many ‘wannabee’ traders lose their money very quick as they don’t take their time to firstly learn the ‘secrets’ of trading first and secondly to practice, practice, practice.
Like in any other job or business you must spend a vast amount of time learning the trade – some say that a person must spend ten thousands hours watching the charts and trading before they can call themselves ‘traders’ !!
Lean more about ten best ways to learn how to trade Forex in our article on this topic.
2. Forex is not a get rich scheme
Trading Forex market or any other financial market does not mean that you get to make lots of money in no time, as sometime advertised by aggressive sales people trying to get you to pay for some training or software.
You need to start small and grow consistently. Sometimes you might win, sometime you might lose – your strategy should take into account potential loses. Some days will be better than then others and you may make a substantial profit but remain realistic – don’t expect ‘big shots’ all the time.
As long as your wins are consistently greater than your loses, you can consider yourself a good trader.
3. Do your own analysis
Know your personality type, analyse your strengths and be aware of your weaknesses.
Are you a ‘leader’ or are you a ‘follower’? If you are a leader, you will probably consider normal to be in control and make decisions: do your own analysis and use all sort of tools to help you come up with a sold trading strategy.
Many of us though feel more comfortable following ‘expert’ advice, either paid or free one. I use the word ‘advice’ in a very loose way – it does include mentoring, or reading recommendation via emails or website, reading paid or free articles on the web or various blogs or a subscription service for trading signals. The extreme is to fully automate your strategy and let the ‘expert adviser’ to trade on your behalf.
This is all good as long as you filter the information received from any other source through your own perspective. Don’t take for granted any advice – do your own analysis ( I assume you’ve already followed my first tip: LEARN THE BASICS 🙂 )
4. Keep it simple
You must have heard this before : KISS (Keep It Simple Stupid)
Same tip applies to trading Forex: keep your strategy simple and easy to be understood, keep your charts simple and clean. I also extend this to keeping your trading environment (desk, office, home office, etc) simple and remove any distractions.
5. Learn to manage your emotions
Recognizing and managing your emotions is one lesson I have learnt in the hard way . And believe me, it is hard to appreciate the importance of emotions and to relate to some other experiences in your life, especially when you are new to trading. There are many trading books covering the psychology of a trader however many new traders (especially men) tend to disregard this topic, until such times they fall into the emotional ‘trap’. There are many people that had given up trading as they lost all their trading capital due to emotional issues.
If you fail to recognize when your emotions – being fear, greed or overconfidence – start to influence your trading decisions and you can’t control your emotional responses then most likely you are doomed to fail and lose your money.
6. Stick to your strategy
Successful traders develop a sound and disciplined strategy and then stick to it. One of the easiest ways to turn profits into losses is to make decisions outside of a trading strategy. Be patient and wait for the right set-up – don’t chase trades. Cut losses early, run profitable positions, and learn to protect those profits.
7. Trade one currency pair at a time
For a novice trader trading one currency pair at a time allows you to focus more and learn the most from your trade. Experiment with different currency pairs to learnt their behavior and ‘temperament’.
Wonder which currency to start with? Read our article on best currency pairs to trade.
Once you master the art of trading, you may want to look at trading multiple currency pairs and use the correlation between pairs to leverage your positions.
8. Start small
Start your trading journey with a demo account and after few week open a live account with a small amount. Nowadays you can open a Forex account with no more than $100 and trade mini positions for $1 per pip or even a micro . Nothing can replace the experience of trading with real money. Always evaluate your performance in terms of pips not the profit/loss amounts.
9. Be nimble
What I mean is when trading Forex you must be alert and be quick. I’m talking about the mental flexibility that is one of the most recognized trading strengths. Don’t be biases and have any preconceptions about what the market is going to do. Formulate multiple “what-if” scenarios and do not get attached to any particular outcome – be prepare to act immediately on new signals the market gives you at any point in time.
10. ‘Babysit’ your trades
Keep an eye on your trades all the time so you can react quickly to any new developments. I don’t agree with ‘set and forget’ approach in trading Forex market. You don’t have to worry and be anxious about the running trades but rather monitor and adjust if necessary.
Babysitting your traders and monitoring the charts is part of the learning journey. You will eventually develop the ‘feel’ for the market – something that no one can teach you !
As most of the brokers offer mobile trading platform, it is really easy to check the quotes from your mobile, whenever and where ever you are (assuming you have a decent internet connection).