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7 Tips For Successful Forex Trading
What I can do, however, is provide you with some basic forex trading tips to help keep you on track to make money trading foreign currencies. 1. Real trading is built on knowledge, not luck. If you risk trading foreign currencies on hunches or without proper knowledge and research, you are not trading, but just gambling. Gamble on the horses, not with your forex account. 2. Practice with "play money" before you risk any real cash. Fortunately, in forex trading that's easy, because brokers allow you what they call a demo account. With a demo account you can trade as if it were real, making and losing money just as in the real forex world. No money actually enters into the picture, which means you can make all the mistakes you need to in order to learn. I recommend you trade on your demo account for about three months before going live. Not only that, but analyze your demo wins and losses carefully, learn from your mistakes so that you won't repeat them with real cash. 3. Trade in the time frame that suits your temperament and experience level. Short time frames like 15 minutes makes for a lot of excitement and many traders love that. I do strongly advise new traders to look for longer trading timeframes though, as that gives you more time to think before you react. 4. Go with the trend, especially when you are just starting out. With experience, you might want to experiment by bucking the trend, and you might be successful. But don't take any chances this way until you are really experienced --- and maybe not even then. 5. Study the charts of periods longer than your chosen trading time frame. This gives you a bigger picture and gives you a better chance to see and accurately identify trends. e.g. look at daily and weekly prices if you are going to trade in an hourly time frame. The forex market is subject to occasional blips that can trip you up if you're not ready for them. But if you are keeping an eye on a longer time frame, you are more likely to see them coming, and know whether they are truly trend related or just a market anomaly. 6. Manage your money conservatively. In forex trading, that means never risking more than a small percentage of your total trading account, such as 2-3%. You will definitely lose on many trades, and you should expect that. When you do lose, remember you'll need to make twice that amount very quickly just to stay even. Keep your risk low so that a few losses in a row won't wipe out your account. 7. Get your emotions out of the picture. Many new forex traders, and even more experienced ones, have been wiped out because they let their emotions influence their trades. Use all the tools available to you for technical and/or fundamental analysis and make your trading decisions based on the results. Never trade on a hunch (see tip #1). While it can be exciting, the forex market can be a scary place. As long as you are trading foreign currencies, keep up your forex education. Article Directory: http://www.articledashboard.com Get more informative articles on forex, as well as your free 7-part forex mini-course here. |
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