Forex trading is one of the money making options people have in mind more each day. While this is not something easy to do and there are many people who were not successful, there are still traders who are doing a great job in securing some excellent side income for them and their families. Let’s see here the 10 Forex tips that would help you achieve better results, too.
1. Make good use of the demo accounts
Fortunately, while Forex trading is not easy at all, there are also many demo account options you can use until you are getting more comfortable and can understand how this all works. It’s true that, by using a demo account, you’re not paying with your own money, but this doesn’t mean you should be reckless. Imagine it’s your own investment there and try to learn how to best trade. You can register demo accounts on other web sites too, make sure you are learning and testing. Only after you are already doing a good job on demo Forex accounts, create a ‘real’ one.
2. Start SMALL
Sure, big investments can give you big returns, but in this case, as a beginner Forex trader, you might get some huge losses. After you are comfortable with the demo Forex accounts, get a real one and invest some money. The smallest amount would work better, you can slowly grow your account by earning money, not by investing a lot.
3. Focus on one Forex currency pair at first
When I started out with a demo Forex account, I almost fell off my chair, seeing how many currencies there were. As you can imagine I ‘traded’ like crazy, didn’t understand a thing and decided this is too difficult for me.
Starting out with a currency pair only (the one you like most), allows you to understand how it all works and even earn some money. As soon as you are comfortably trading, you can expand.
4. Study and learn, this is not a Casino
Forex trading, however difficult and ‘crazy’, is still not a game. By doing research and learning a lot you can turn this from a simple ‘gamble’ as it might appear at first into something that’s making sense. Don’t just ‘play’ with your account, this is not a Poker game. Learn, discuss with other traders, try to understand the trends and always try to become better educated.
5. Use the weekends for analysis
The markets are closed during weekends, but this allows you to spend some time studying how your Forex trading week went by and see if there are any news in the market. Nothing happens by chance and, by doing an analysis each weekend, in time, you can get more knowledge and become more experienced. This will translate in bigger Forex earnings and better results.
6. Print it out!
While we are trying to go paperless with our bank statements and other ‘papers’, Forex trading is not the best place to become too eco-friendly. Do postpone saving some trees and print out your records. Note there everything you find important: reasons, entry and exit points etc. Study these records from time to time and it will allow you to understand your Forex trading better, see if you are making any mistakes (and repeating them), see if there were some successful decisions etc.
7. Do not add to a losing position
There is no way to predict the future, so it’s impossible for you to know exactly what will happen with your chosen currencies. When it comes to Forex trading, now is ‘closer’ to anything you’ll get, so try to understand how your current situation is and what can be done. You will probably have losing positions, too, but it doesn’t make sense to add to them. If a position is in red, you can keep it ‘alive’, but shouldn’t add to it.
8. Follow the trends
Seasoned Forex traders can make a lot of decisions that make no sense for a beginner and even go against the trends (and succeed). Since you’re just starting out and lack the experience and the ‘flair’ to do so, it’s easier to follow the trends. If a trend is up, you’ll probably want to buy, if it’s down, maybe it’s a good idea to sell.
9. Don’t risk more than 2-3% of your account
Forex trading is not gambling, here, I said it again, so don’t let emotions or any recklessness get you into trouble. Even if you feel like there’s a huge opportunity, remember that Forex is not predictable and you can lose a lot of money. Trade cautiously, even if it means smaller returns. A bigger risk can get you a lot of money (if you are successful), but it can also wipe out your trading account and, instead of being able to take a small loss, you’ll need to invest more ‘real’ money to get back to your previous position.
10. There is no magic solution to successful Forex trading
Don’t rely on robots or any other untested products, even if they seem to be pretty popular these days. You can be a successful Forex trader by relying on your own brains and experience. Read a lot of articles, ask around in specialized forums, but do your own work. Get your reports, study your trading patterns, do your weekly analysis etc. Let others get ‘rich’ by following all kinds of schemes, become a more experienced and educated trader and money will start coming.
Is anyone here trading Forex? Are you doing OK? What else would you advise other prospective Forex traders?