Trading in the Forex Market can be difficult, but everyone can learn.
Before earning a lot by trading Forex, it’s important to first educate yourself. This is a mini-guide for beginners to read as they begin their trading careers in the Financial Markets. Keep in mind to always have your trusty offline notebook with you so as to register plans, strategies and impressions (gut feeling is very real). Forex can reward you big time if you treat it like a business.
The most important tips for every trader to become successful in the Forex Market:
1. Start in the demo By not risking real money, new traders are able to sharpen their minds and skills before going into the real market. It’s highly advised that new traders start using the demo for at least a month before investing for real. Also, when using the demo be sure to maintain a serious conduct and do your best as if it you were using real money. This stage is also crucial in helping beginners understand the dynamics of the Forex market so take it seriously.
2. Learn Forex as much as you can Many people think it’s obligatory to be an expert in all tools and strategies, basic knowledge of charts, graphics, and calculations in order to invest in the Forex Market. While all knowledge contributes to better trading, everyone can trade by knowing the basics. The internet is full of content. Remember: learning is the most vital part, and will prevent a lot of headache right from the start.
3. Don’t be swept away by feelings and emotions It’s absolutely vital to always keep a peaceful mind when trading. If you feel anxious, angry, fearful or even sad, it’s might be better to leave trading for another time. Emotions and feelings make a huge impact on a trader’s decision making process, so it’s important to make a self-assessment before trading. Know when your mind is disturbed by them and when you are not apt to operate. Self-confident, happy, courageous and even hopeful people make better choices in the markets.
4. Create a few, well-defined, Forex strategies A trader has to know what to expect from the Forex market in very clear terms. If you believe an asset will go up or down by a certain percentage, write it down and define your Take Profit and Stop Loss appropriately. One of the greatest catastrophes that befall new traders face is not knowing when to SELL. Remember: the market goes in cycles and no asset only goes up! So when your position strikes a specific amount of profit or loss, make sure to SELL as this attitude will in the end be to your advantage in the long run, even if that means abandoning some profit in the short run.
5. Be prepared for all scenarios It’s impossible to always profit, especially in the Forex market which has high volatility. Even the most seasoned traders are aware of this and are not depressed from losing. They know that in the long run they can recover their losses by just adjusting the strategy, waiting for the market to stabilize or just risking less. Getting depressed over lost capital can cost a trader’s career and, worse yet, make him roll on a chain of bad investment. Keep a clean, confident mindset and don’t let emotions ruin your trades.
6. Start small and only proceed when you feel more confident You might have a great intuition or know it’s “absolutely clear” an asset will take a certain turn. But remember nobody has a crystal ball and that a single event can bring big losses. Make sure to establish a set amount of money to trade and not go over it. Just because a person can win big once they start, it doesn’t mean this will follow forever. Greed can be very dangerous and spell the downfall of every trader. Keep your eyes on your plan and you will go a long way.
7. Develop a strategy and your trading style A trading strategy and style is essential for every trader. Most people will use simple Fundamental Analysis to trade in the beginning. As a person acquires experience, his operations will refine, and he will develop more complex strategies. Eventually he will create a unique trading style (like Technical or Scalping). Try to maintain your style for a longer time, in order to master it to your advantage. People who change too much don’t specialize in anything.
8. Acquire a mentor or a guide for yourself While not always available, they can be a great help to correct faulty assumptions and mistakes before any loss of money. If possible, it’s always advised to consult a friend or relative who’s more seasoned, before opening a position and explain your line of thinking behind it. The mentor might see something you let pass and give a better approach. Despite the fact that few people can have the help of mentors,. A very interesting exercise would be to try to guess his reasoning behind the expert’s choices. Make sure to write down your impressions in your offline notebook.
9. Persist and persist again Just like every art, success only comes after plenty of effort and sweat. If at first you don’t succeed, don’t give up. That’s how most successful people advance in life!
In conclusion, trading Forex is an art and a science. Like every other one, it takes time to dominate it. But once you get the hang of it, your sailing becomes ever smoother in the sea of social trading. Eventually, anyone determined and careful enough can make money in the Forex market. So stick to the fundamentals until you are comfortable with more advanced tools, keep advancing, refine your strategy, and safe trading!
