The most important rule every beginner should remember is that the currency market is unpredictable! Everything may happen here. To avoid pitfalls, learn to analyze the situation, recognize it in advance.
Own your emotions
You should not open or close a transaction guided by only emotions and feelings. Profitable Forex trading is possible only if you can choke down fear, lack of confidence, and greed. These are the main enemies of every beginner.
Keep to the next rules:
- think out an effective trading plan;
- follow the chosen strategy;
- observe discipline;
- maintain a trading log.
Not only negative emotions, but too positive ones are dangerous in trading. Keep this in mind!
Keep to your strategy
A Forex strategy is a set of rules aimed at ruling out random actions on the market. A good strategy makes it possible to not only save one’s capital but also multiply it many times. Any strategy is selected individually. It is important to realize that choosing a proper trading plan may take much time.
Find a trading style, which will fit only you. For example, it may be scalping, swing trading, day trading, etc. Improve your skills at the selected strategy: regularly study new articles, videos, visit workshops, listen to experienced traders. You shouldn’t skip from one strategy to another without study out none of them.
How to select your own strategy?
To select your working strategy, you need to:
- identify your psychological type;
- objectively estimate the level of your expertise;
- determine time convenient for trading.
Study all options. Always start with the simple making way for more complex step by step.
Learn to manage risks
Risk is the impossibility of predicting the outcome of one or another event. Profitable Forex trading is impossible without proper risk management philosophy.
The next tips will help you reduce the probability of losing your deposit:
- Never invest a big sum of money in one transaction.
- If the result of an operation is being in the hole, stop it in good time. For this, you can use special orders, which will close the transaction when reaching a certain loss.
- If something is spinning out of your control, immediately close the transaction. Do not wait when the situation changes for the better.
- Before opening any transaction, carry out a careful analysis.
- If you are a beginner, opt for trend trading.
It is highly important to learn to recognize and realize your mistakes. This will help to analyze the situation properly and avoid its reoccurrence. Embrace the fact that you can’t do without losses, especially in the very beginning.
Continuously learn and upgrade your skills
Profitable Forex trading without professional skills and knowledge is impossible. To puzzle out exchange trading, regularly attend related courses and workshops, study top traders, their secrets. You can also read professional literature. Almost all big broker companies provide their clients with many educational materials, video lessons, lectures, etc.
Gained knowledge should be used in practice. To this end, you can use a demo account. This way you can polish your skills, figure out strategies, understand the operation principle of the currency market without risking your own resources. You can open an account at any broker company.
If you cannot study on your own, find a good mentor. Turn attention to his/her experience and achievements. A fine teacher will quickly teach you the basics of Forex trading, as well as point out your mistakes.
Keep in mind that training should be ongoing! You should not be satisfied with what has already been achieved.
Take precautions in trading
Sometimes one successful transaction may bring more profit than five less successful ones. This means that the quantity of operations doesn’t equal their quality. That’s why a beginner should be very careful in this. It’s better to skip a few petty signals and wait until the one strong and reliable. For this, you have to be patient.
Hold your psychological capital
Money comes and goes. If you have a decent and stable psychological capital, you’ll easily survive any losses, draw the right conclusions and will be able to earn more money considering the past mistakes. What is psychological capital? That’s a set of personal qualities: self-confidence, insistence, a positive attitude toward success, the ability to encourage yourself in challenging situations. If you want to find success in trading, make sure to work on these qualities.
When you need to withdraw from trading
To start with, you should not trade if you aren’t sure of the clearness of your mental state. This state may be caused by some medicines, after severe stress, strong emotions, shock, etc. A drunken state is also a taboo for trading. Even a small amount of alcohol may have a great impact on the ability to think adequately.
In addition, you shouldn’t leave transactions unsupervised. For example, a trader is making a transaction, but leaves at a certain point, on personal business, so to say. After coming back to the working place, he may be disappointed a lot. No experienced trader with a profitable account behaves like this.
Start a trading diary
Put down all events related to your trading in Forex. Make sure to note what emotions you felt, what stopped you from obtaining the result and what had a positive role. This diary will become a great assistant for a beginner.
Tips from successful traders for beginners
- Choose a strategy, which fits you best. The simpler and clearer the principle of action, the more profitable transaction using the chosen tactics.
- Never trade with the last savings. Risk only the amount you aren’t afraid of losing if you fail.
- Do not trade without stop-loss. This may result in the account loss.
- Measure the earned profit in percentage terms instead of a cash equivalent.
- Do not try to double or triple profit inside of a month. To avoid losses, you need to watch your step, and this is not necessarily fast. The profit of most professional traders per month rarely exceeds 10% of the deposit.
- Avoid unjustified risks. Otherwise, your trading will turn into a lottery.
- Learn from your mistakes, put them down and analyze them. This way you can adjust your strategy and get a fine profit.
- Have patience. Trading on the currency market is not easy. What is important here is training and skills practice. It is unlikely that you become a professional within six months. Feel about it like a business. In some fields of business, there may be no profit for quite a long time.
- Regularly withdraw your profit. This will help to avoid losses in case of a drawdown on your account.
To trade in Forex profitable, one has to treat this activity like a key job. Regularly enhancement of skills, communication with professionals, analyzing your actions, insistence and adroitness should become your life philosophy. Only this way you may expect to succeed and get a high income.