As a beginning forex trader, you can easily get lost, confused or overwhelmed with all the information you are bombarded with on the internet about trading. The best thing to do is to just take it slow, learn how to trade properly from an experienced professional and don’t rush it.
The following 10 forex trading tips are things that I wish someone had told me when I first began trading. So, with that in mind, I am giving you ten of the most important trading tips for a beginning (or any) trader to absorb before getting started in the market.
1. Choose Your Broker Wisely
Choosing the right broker is half the battle. Take your time to check reviews and recommendations. Make sure the broker you choose is trustworthy and suits your trading personality.
Remember, there are lots of fake brokers out there who will only stand in your way. Go for an authorised broker with a licence.
If you want a reliable and trustworthy broker, look no further than Admiral Markets!
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2. Create Your Own Strategy
No list of currency trading tips is complete if it doesn’t mention strategies. One of the most common mistakes beginner traders make is not creating an action plan.
Figure out what you want to get out of trading. Having a clear end goal in mind will help with your trading discipline.
3. Learn Step-by-Step
As with every new practical learning activity, trading requires you to start with the basics and move slowly until you understand the playing field. Start by investing small sums of money and keep in mind that slow but steady wins the race.
4. Take Control of Your Emotions
Don’t let your emotions carry you away.
It can be very difficult at times, especially after you’ve experienced a losing streak. But keeping a level head will help you stay rational so you can make competent choices.
Whenever you let your emotions get the better of you, you expose yourself to unnecessary risks.
5. Stress Less
This is one of the Forex tips that sounds really obvious – because it really is.
But guess what? Trading under stress generally leads to irrational decisions and in live trading that will cost you money.
Therefore, identify the source of your stress and try to eliminate it or at least limit its influence on you. Take a deep breath and focus on something else.
Every person has their own way of overcoming stress – some listen to classical music, while others exercise. Listen to your mental health and learn what works best for you.
6. Practice Makes Perfect
Of all the Forex tricks and tips for beginners, this is the most important. You will never succeed at anything on your first try. Only constant trading practice can yield consistently top results.
But you probably don’t want to lose money while learning the basics, right?
Luckily for you, trading on a demo account costs nothing to set-up and not a cent more to use, for as long as desired.
7. Learn one trading strategy, stick with it.
One of the biggest mistakes I see beginning traders make again and again, is changing trading methods too often. If you are using a logical, common sense trading method like my price action method, you need to really learn it and master it before you do anything else. If you jump from method to method because you think you’ll find some “Holy Grail” trading strategy, you are simply operating on false hope and being illogical, and you will lose money.
Also, don’t switch methods just because you had a few losing trades. Any method will have a certain amount of losers over a sample size of trades, this is normal and part of trading. You cannot let losing trades affect you too much; you really do need ice cold discipline to excel at trading.
8. Don’t get overwhelmed
It’s easy to feel overwhelmed with information and trading strategies as a beginning trader, it happens to all of us in the beginning. The best way to limit this or avoid it altogether, is to find a mentor, someone to learn from, and piggy back off their success. I have laid out all my trading strategies for you to learn in my price action trading course and in my opinion, the best thing you can do is block everything else out, forget everything you’ve learned, and start over with my teachings from a clean slate and focus only on that until you really know what you’re doing.
9. Don’t freak out when a trade moves against you
This one is big, because most traders, especially beginners, freak out or over-react at the first sign of a trade moving against them. This is much more of a problem in live trading than demo trading, due to the differences in emotion between them, but it is a problem and it needs to be addressed.
A trade moving against you is NORMAL. I’ve had trades move to within 5 pips of my stop loss and go on to be HUGE winners after that. If I had freaked out and closed them out before they hit my stop loss, I would have not only lost money, but I would have lost a lot of profit too. This is the main reason why you need to let your trades play out and not close them out early ONLY because they’ve moved against you.
It’s really pretty simple: Set your stop loss in a logical / safe place (more on this later), manage your position size so that your dollar risk is at a level you’re OK with losing, and LET THE TRADE GO. Don’t micro-manage your trades, just let the market do the work and you go play a round of golf, go to the gym or go to sleep…then check on the trade the next day. Doing nothing with your live trade is usually the best (and most lucrative) move, meaning set and forget it.
10. Learn the basics first
Many beginning traders try jumping right into the market with no real background knowledge on the markets they are trading. To build a solid trading foundation, you need to take the time to learn about how the Forex market works (or any market you’re trading) and really get a solid understanding of all the jargon, etc. before you actually dive in and start learning a trading strategy.