subject: 3 Forex Trading Secrets That Beginners Should Follow in Order to Increase Chances of Succeeding [print this page] 3 Forex Trading Secrets That Beginners Should Follow in Order to Increase Chances of Succeeding
Making money in the foreign exchange is much easier than many people think - all you need to do is understand and practice a few forex trading secrets. Most beginning forex investors don't do nearly enough research and make way too many simple mistakes, which in the currency trading market will wipe out the funds in your account in no time. If you do what most forex traders do, you'll end up with what most traders end up with - nothing.
Forex trading secrets? Many beginning traders believe that there are actually proprietary, secret trading strategies that only the pros know that one must follow to become a profitable trader. The good news for all of the common people (like me and you) is that this just isn't true. Sure, professional traders might have an edge, but you might be surprised to know that they follow the same rules every other successful trader follows.
So let's take a look at 3 of the top "forex trading secrets" now.
1. Follow obvious trends.
Even though this sounds simple, so many traders try to trade against major trends. The only reason that a currency trends (or moves continuously in one direction) is because banks, governments, or corporations are moving the market. This means that someone with a lot more money and experience than us is trading, and we don't want to trade against them.
So many forex traders try to guess where the market is going to turn. Don't try it! The foreign exchange markets trend more often and more deeply than any other market in the world. Why not take advantage of that and trade with the big boys and girls rather than fighting against them?
2. Choose a system and stick with it.
If you have never traded the forex before, you definitely need to learn all that you can about the markets. But a word of caution here - eventually you need to quit jumping from trading system to system and settle on one that works.
Of course a trading system is not going to work all of the time in every market - losing trades happen to everyone. But just because you make a bad trade doesn't mean that you need to switch systems. Find a system that you know works over time and stick to it.
3. Don't over-leverage.
Of all the forex trading secrets, this is the one that is ignored the most. One of the beauties of the forex exchange is that you can trade with insane amounts of leverage - usually 100:1. What that means is that with $1, you can control $100 of currency. So if you invest $1,000 in a trade, you are actually controlling $100,000.
This works really well as long as the trade is profitable, but when the trade goes against you, you can lose big money fast. The only way to use leverage properly is by not risking too much of your capital per trade. At most, you should risk only 5% of your account - max! Really, for beginning traders, risking 2% is as high as you should go.
If you'd like to raise the chances of consistently making money trading foreign currencies, you just need to follow the three forex trading secrets mentioned previously. By following the trends, sticking to one trading system, and not over-leveraging yourself, you have instantly multiplied your likelihood of being a successful forex trader.
