There are iron rules in each business and ignoring these rules will make the players kicked out quickly from the game, this is also applied in forex trading. These following forex trading tips can help you to make profits, keep your fund save, and play by the rules:
1. Never Execute a Transaction without Proper Analysis
There area always times when you will stumble upon something that looks very promising, perhaps from news or trends. These ‘hunch’ may bring you profits once or twice, but it just coincidence, you will never survive in forex trading if all that you got is ‘hunch’ instead of proper analysis and logical decisions.
This has happened to a lot of the traders when they began; they manage to gain profits by guessing, thinking that they already grasp the secrets of forex trading, and start offering forex trading tips to their friends. This attitude is identical to a gambler in a casino: throw the dice and pray. You’ll be thrown out from the game in no time with this kind of attitude.
2. Learn One At A Time
Forex Trading has numerous aspects and elements; it’s purely impossible to master it right away. If you just start trading, don’t throw USD10,000 to your account and experiment with it. Trading currency is similar to gambling; when someone lose, there are always a winner at the other side. These winners will have your USD10,000 with just a few trades, but by reading this forex trading tips you are knowledgeable enough not to do it.
The best approach is to take it slow. Start with a practice/dummy account while learning. It is possible to test various methods, currency pairs, expert advisor, and signals there without concerns. If you have found a system that works, you can proceed to a mini account for additional test. Nevertheless, if you believe in your system, go ahead and open a real account.
Please note that “system that works” means the system can give you steady profits at the end of the month without fails and without you have to keep staring the monitors to check your open positions. If you have confidence in it, learn to control your emotion and let it do the task.
3. Utilize Trusted Forex Trading Platform/Forex Broker
Regardless of how good your system is, trading in a poor quality platform will kill your chance to achieve profits. Most of forex broker will provide you free trading platform, but you need to check some things there:
- Provide access to your favorite currency pairs. At the minimum it must support common currency pair such as EUR/USD, GBP/USD, and USD/JPY.
- Support stops and limits; these are important for your risk management.
- Provide charting feature, news feed, advices, and research material; to make it short: all that you need to make proper analysis. If possible, a daily forex trading tips can be useful as well.
- There are someone in their staff that ready to help you. Whenever possible, find the one that have 24 hours support so you can have someone to help you anytime you are in trouble.
- Currency trading is a global business, so it is great if your broker take deposit in various currencies.
- Simple procedures applied in their services, including withdrawal.
4. Figure out how to Use Stop Loss and Take Profit Order
Stop Loss and Take Profit are pre defined orders that you put to close your trades at particular price. Example: you buy GBP at 1.678; then you place Stop Loss order at 1.648 to limit your loss by 30 pips. You also put Take Profit order at 1.708 which means you will close it when you get 30 pips profit.
This is important so that you can stop your emotion to get involved on the “close decision” and mess it up. When the market is move against you, you won’t close the position because you are hoping the market to swing back to your side, thus turn possible loss into profits. Most of the time, this kind of of behavior will only create more losing trades. I can’t stress this enough; this has made many traders fall miserably. If you don’t remember everything that I said in this forex trading tips, remember this: emotion is only going to make your trader career short.
The other scenario: The market moves as you wish and you see potential profit, but you won’t close it since you want as much profit as you can get. You can ever predict when the market will moves against you and when it really does, it will be already too late. In both scenarios, greed is the one in motion. But when logic dictates, you can control greed.
Main point here: no need to rush everything when you learn or trade forex. Spend some time to educate yourself on the rules, test, practice, analyze, and read several forex trading tips for the day. However, I don’t recommend you to do it by yourself since it can be long and painful process.
Discover how to choose the right broker to put your money in online forex broker. If it looks too complicated, you might want to check managed forex trading for another alternative