Forex trading can be simple. From highly volatile markets, the highest trading volumes, leverages and low costs to easy-to-use trading platforms, it attracts both novices and professionals. However, it is shocking to find out that less than a 10% of these traders make substantial profits from the forex trading market. What this means is that it is very simple to lose money in Forex. It’s a staggering statistics that most Forex Traders actually lose money.
Take Your Time to learn Forex
A new trader with neither skills, knowledge nor experience needs to take time in order to understand forex trading. They say that nobody stops learning and change is inevitable. Taking time to learn first is a great way to prepare for a trading day. As a greenhorn in forex trading, you will get to understand what it is all about. This gives you a clear picture of what to expect and what is expected of you. For professional traders, learning the market is crucial to success in trading. Factors such as geopolitical and economic shifts affect the market and should be studied on an ongoing basis.
Trading for 1 year with Demo accounts
Experience is the best teacher. Demo accounts provide traders with an opportunity to open trade using hypothetical money. This is an advantage in that traders learn to strategize and experience the different market trends. Using virtual money, traders will not be exposed to losses that are due to not having experience with the market. The major limitation here is that profits cannot be liquidated. However, it is more important than the experience of pulling the wrong stints due to amateurish approaches.
Finding the appropriate forex broker
Forex brokers are the firms that provide you with the access to a trading platform.You can not open or close a trade without them.The numbers of forex brokers are soaring with each passing day. The fastest way to lose money in trading is by using an scam Forex Broker. Here is why you need to look for a reputable broker. Ever imagined of depositing your money in a broker’s account and you immediately stop hearing from them? A reputable forex broker has a robust customer care service. In addition, you are provided with a responsive platform that is user-friendly. The security of your money should be guaranteed. The best way to find a reputable forex broker is to check with your country’s forex regulatory bodies. Most legitimate brokers can be found registered with the bodies. Here are our top Forex Brokers that we currently use.
Using leverage reasonably
No trading market offers better leverage than forex trading. Leverage is the money that you borrow in order to use it in making an investment. In forex trading, Forex Brokers offer generous leverage to traders… some even offer as high as 1:1000 leverage which is crazy in any industry. If used well, traders can realize the full benefits of forex trading. However, most traders join the market with minimal capital and hope to use leverages to open bigger trading positions. What many never notice is that bigger trading positions have bigger risks as compared to smaller trading positions.
Proper record keeping
Any businessperson will tell you that record keeping is vital for any investment. Forex trading is not an exception. With properly kept records, traders can easily identify where things never worked out well or where they worked out perfectly. Such instances are important in that you will know what to replicate in your future trading and what to drop.
Forex Trading is an investment, not gambling
The psychological state of a trader is very crucial. How you view it has an impact on the strategies that you will use and how to execute them. Traders need to view the forex market as an investment and not a gambling platform. The mentality associated with gambling is that of a get rich quick scheme.This is never the case with the forex market. It needs sobriety and patience, for instance, to see a trend go through. In a gambling game like football it requires only 90 minutes to know your fate. Time frames are diverse in forex too, daily, hourly every five minutes and others. Sometimes a trend will need a long term shot to nail profit. Opening and closing trades on short time frames will prove to be unprofitable in such cases.
Protecting your money
Most traders will usually focus on making money. In fact, the first thing that really should come to mind is how not to lose money. It’s like in Football, if nobody can score a goal against you, then how can you lose a game. In trading it’s the same, your first priority is not to make money but rather to protect and minimize your losses. And for that you need to learn how to cut your losses fast by having effective stop loss strategies.
It requires a lot of discipline to succeed in forex trading. The best thing to do when you are starting out is to trade the same strategies on demo account for 1 full year. Make at least 1000 trades so that you understand and able to see what you have done well and what you have done wrong. This is the best way to learn how to trade. Select a strategy and start practicing. Forget about making money first. Learn well first.
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