Those who have traded with currencies know that it can be a great way to grow an account. However, forex trading is not for everyone. There is a specific set of rules to follow. Never go into trading without a specific plan in mind, or you are setting yourself up to lose.
There are some great tips for those who wish to trade currencies. Read through to find some useful information that will help you become and stay a successful trader.
There are some great tips for those who wish to trade currencies. Read through to find some useful information that will help you become and stay a successful trader.
Never become emotionally attached to trading. You need to treat trading as strictly business. Becoming too emotionally attached can set you up for failure. As any trader knows, you are going to have some losses. Accept the loss and move on. Becoming emotionally attached and “chasing” the loss sets you up for even further loss. Execute carefully planned trades and if you lose, move on to the next planned trade. You will not recoup your losses by chasing.
Focus on a single currency pair, and expand as you sharpen your trading skills. Beginning with trading the currency pair of your nation can be a great idea. If you don’t wish to do this, stick with the most liquid pairs. Its great to restrict trading to a currency pair that we understand. With the ebbs and flows of currency pairs, you may be better off getting to know one or two well, and stick with those. Plenty of opportunity will arise.
Don’t rely on trading robots, automated trading, and other programs that promise to increase your account by a huge amount in a short time. These methods are unproven and untested. They do not study the market, they are only entering and exiting at specified points. Most likely, they will blow up your account in a short amount of time.
Never add to a losing position. This may sound like common sense, but so many traders get frustrated and add to losing positions in hopes that it will turn around and become profitable. Although there are lots of educated guesses, no one can guarantee where the market will be headed in the next hours, days, or even weeks. The certain value of trading is the present time. Adding to a losing position is nothing more than gambling. You may win, you may lose, but its not based on anything. Don’t risk it.
Money management is a huge factor in trading. When we risk too much at once and have too many losing trades, we get to a point where we can no longer have winning trades. Two good rules to follow: Risk no more than 3% of your capital per trade and make sure you have an account large enough for 40 trades. Being disciplined will help you go much further in the world of currency trading.
Always use stop loss. Stop loss is the most powerful tool you can have. Not every trade is going to go in the right direction. You need to predetermine your risk, as the market can change in a matter of seconds. Never move your stop loss after opening the trade. Your account will be protected, as will your peace of mind.
Always use stop loss. Stop loss is the most powerful tool you can have. Not every trade is going to go in the right direction. You need to predetermine your risk, as the market can change in a matter of seconds. Never move your stop loss after opening the trade. Your account will be protected, as will your peace of mind.
Lastly, stick to a plan and don’t give up. Practice on a demo account if you have to. Have your strategy in place and live by it. Trading without a plan is nothing more than gambling, and we know that with gambling, the house always wins! Find what works for you, and be patient. You are not going to get rich in a day. Accept losses and embrace wins.
Good Luck Trading!
