Foreign currency trading, or forex trading, is one of the most complex and difficult to understand industries out there. If you’re serious about not only getting into forex trading, but becoming a success in the field, there’s a lot to learn and watch out for as you begin this journey. Many come into forex trading with one thing in mind: profit. The fact of the matter is that profit in the forex world will not happen overnight. But if you keep the following tips in mind, you’re sure to get into the game on the right foot and with a much greater chance of success.
1. Understand yourself before you dive inOne of the most overlooked aspects of forex trading is that it’s not all about numbers, markets, and probability. It’s also one big psychological game. If you’re not yet self-aware enough about your strengths and weaknesses, it’s best to really understand where you stand before you head into your first trades. Emotions like greed and fear can quickly take over while trading and that will ultimately lead to loss of capital. Developing skills like patience and perseverance will ultimately lead you to success in forex trading.
2. Plan, plan, and plan again
One of the biggest factors of success in forex trading (or virtually any other venture) is intensive planning, setting goals, and sticking to those goals. If you plan for everything and keep that plan close at hand, you’ll be less likely to deviate from it. Figure out what determines success and failure in your specific case. Measure out how much time you can dedicate to your trading career. And also, set high goals for yourself, but not too high that they’re absolutely unattainable.
If you want to take risk, plan ahead. Whatever, happens follow that guide. If you picked a figure for a stop-loss, stick to it. If you have picked a figure for a take-profit, stick to it. Being too greedy and emotional is the main crime amongst forex traders. It’s a mind-game. So, be calm and think wisely.
3. Logic is king
In forex trading, logic rules over everything else. If you’re a naturally impulsive person, be mindful of this and see how you can train yourself to be more logical in your actions. Forex is a world of numbers, probability, and logic and if you don’t understand this one rule, you will have a hard time finding success.
4. Follow the 2% rule
This one should be your Golden Rule when it comes to forex trading. You never want to risk more than 2% on a trade, otherwise known as a 2% stop-loss. This is one very easy way to make sure that you keep your trades safe and ensure profit in the long-run.
5. Have big dreams, but also be realistic
The majority of new forex traders come into the business with high hopes for making huge profits in their first year of trading. If you’re extremely lucky, this might happen. But most of us can’t count on luck to find success. Before entering the world of forex trading , you should take an in-depth look at what you’re able to put in before you decide what you want to get out. How much time do you have to dedicate to trading? How much cash do you have to invest in this field? Really take some time to figure out the answers to these questions before you begin.
6. Make sure to pick the right broker
Having the right broker with right analytical tools is a must if you want to succeed in the world of forex trading. Be sure to do your due diligence before you start with any of the broker. Measure their customer service to see how helpful they are in times of need. How is their trading software and does they provide access through app (iphone, android)? Is there commission par with the market rates? If in doubt speak with your potential broker on the phone and form a relationship prior to making a deposit.
7. Start with “one” at a time
The forex trading world is incredibly complex due to the dynamic nature of world markets, so any way of making your trading game simpler can only help you on the road to success. Most expert traders will advise you to stick with the currency pair that you’re most familiar with before you learn enough to expand your portfolio. It might be best for you to start with the currency of your own country to start with. It’s all about patience!
8. Take notes about your failures & successes
Learning from your failures is one of the most important pieces of advice out there and it’s even more relevant in the forex trading world. The fact of the matter is that failing is an inevitable part of being a beginning trader. So when you do fail (or when you succeed!) take some time to yourself and note down what happened and how you can improve for next time. That way, when you get to a similar circumstance down the road, you’ll have your notes to follow up on and make better decisions.
9. Patience is and always will be a virtue
If you made it to the top in seconds, then you will fall in micro-seconds.
You must have heard, slow and steady wins the race.
Every one of us has heard the old adage that patience is a virtue. You may be tired of hearing that, but it’s so true in the realm of forex trading. You’re going to be in this for the long-haul if you want to be successful and make a profit. If you’re generally not a patient person, take some time before you start trading to try to determine how to instil that patience in yourself. This will not only help your career in trading, but also your life in general.
10. Keep going, no matter what
Perseverance is key when it comes to finding success in trading. Even if you find yourself failing many times and it may seem like giving up is the way to go, keep persevering. That is the only way that you’ll eventually learn from your failures and find more success down the road.
The most important thing you should remember about forex trading is that there’s no such thing as too much preparation. Take these points above and do more research on how you can find success in the forex world. Prepare as much as you can, learn how to be patient and to persevere through tough times, and success is sure to be found.