Learning Forex trading can seem complicated for beginners. The world of Forex trading may feel overwhelming and confusing, especially for traders who are new to the game and aren’t aware of the rules yet. Dipping your toes without knowing the rules of the game can lead to results that backfire. The good news is that we’ve got you covered.
Here, in this article, I share with you some of the best practices of successful Forex traders to help you get started with trading in 2020. We’ve got some advanced tips for the experts as well. So, let’s get started.
1. Choose the Right Broker
Finding the right broker is like winning half the battle. Before you lock in on a broker, make sure to check reviews online. You can even ask your trusted friends for recommendations if they are into Forex trading. Look for a broker who understands your trading preferences and suits your trading style.
2. Build your Own Trading Strategy
A list of best trading practices is incomplete without touching on the topic of strategies. One of the most common rookie mistakes is not having a trading plan. Start by fixing your trading goals — what you wish to achieve from Forex trading. Having a clear objective will help you figure out your trading strategy.
3. Go Step-by-Step
Just like all disciplines, you cannot expect to master Forex trading overnight. Start with the basics and go step by step. Invest small till you get the hang of the playing field.
4. Don’t let your emotions sway your Decisions.
Don’t let your emotions cloud your decisions. Keeping emotions away from trading decisions can be challenging, especially when you’ve had a streak of wins or losses. But, keeping your head level is essential to help you make smart decisions avoiding unnecessary risks.
5. Don’t Get Stressed
This may sound obvious but needs to be mentioned. Trading when you’re stressed leads to irrational decisions that cost you your investment. If you’re feeling stressed, try some calming techniques and get back to trading once you feel relaxed and clear.
6. Practice makes Perfect
This one is for the beginners. The more you trade, the more skilled you become. So, instead of watching from the sidelines, get into the action, and start Forex trading with a small amount that you can spare. Don’t want to lose your hard-earned money? Try a demo account to get the hang of trading.
7. Analyze your Moves
Before you make a move, it’s essential to analyse why you’re making this move. Ask questions like:
· Am I biased?
· Am I making this move out of fear of losing out?
· Why did I choose this particular currency pair?
Finding answers to these questions and more will help you figure out the right actions to take.
8. No Success without Risks
Even the best Forex trader in the world cannot guarantee your success. When you decide to get started with Forex trading, you need to become ready to accept the possibility of failure. Remember that no one can make profitable trades all the time. The smart move here is to limit your losses so that it doesn’t affect you much.
9. Rewards come to those who are Patient.
Remember the №1 rule of Forex trading — there is no shortcut to success. And, if anyone promises you instantaneous results, you have to be wary of that person. To become a successful trader, you need to be consistent and patient.
10. Don’t let the Learning Stop.
Every day you trade on the Forex market, there’s some new lesson to be learned. Start understanding the trends, how things work. Master new tools. Studying the market is a process that pays off in the long run.
11. Give it a Break
It may be tempting to stay glued to your computer screen watching the market all through the day. It’s common for traders to have multiple tabs opened on their screen. However, staring at screens for hours together can make you feel burnt out. So, take regular breaks and give yourself time to relax and refresh. This way, you can make better decisions when you come back.
12. Learn about Trends
The knack to spot market trends is essential for successful trading. That doesn’t mean you have to try out every trend that you come across. However, that doesn’t mean you have to ignore every trend. Identify the right trends and pro-actively adjust your trading strategies to suit it.
13. Look for Competitive Conditions
Look for a trading tool that helps you land favourable trends. To know more about the choices we offer, check our account types.
14. Forex Trading is NOT Spur of the Moment Decisions
Remember that Forex trading is a strategic game. You need to plan your moves well ahead of time. Start by asking yourself these questions:
· What will I do if I lose this trade?
· Do I have a Plan B?
Always be ready to expect the unexpected.
15. Learn how to Read Charts
One of the most time-efficient tools available at the disposal of Forex traders is charts. It helps you transform numerical data into easy-to-understand visuals. I encourage you to use online tutorials to learn how to read charts.
16. Don’t Overtrade
While we appreciate your eagerness to trade, there is a fine line between being eager and overtrading. Do not cross this line. Set a maximum limit for the number of trades you will carry out in a day or week.
17. Greediness can topple even the Best
Greediness can lead to unnecessary risks. Make sure to set upper and lower limits before you begin trading. When you hit these levels, stop trading. This is one of the most crucial practices to avoid significant losses.
18. Know when to Stop
Not having a stop-loss means you keep a bad position open, hoping against hope that it improves. With correctly placed stop-losses, you can reduce the risk of losing your entire capital in one go.
19. Post Analyse your Trades
Just like you analyse a trade before you go ahead, you need to analyse your trader after it happens as well. Keep a journal of all your trades. This helps you detect patterns and monitor performances. You can learn from your past mistakes when you have it all down. Additionally, maintaining a trading journal inculcates trading discipline. Try to be your biggest critic.
20. Finally, Don’t Be Afraid to Experiment
The final tip is to — be flexible. Remember that trading strategies are not set in stone. You can always try new things and improve your trading game plan.
Wrapping Up — Don’t Let Forex Trading Scare You
The magic formula for success in Forex trading is a mix of being prepared and consistent. You need to be consistent to become successful. Use the tips outlined here and enjoy successful Forex trades in 2020 and beyond.