subject: Forex Trading Tips - Prepare Yourself Well Or Lose Everything [print this page] When you start something new, you have to know the iron rules in order to play the game right and starting forex trading is no exception; know the rules or lose everything. Apply these forex trading tips in your trading career to make steady profits, keep your account save, and play by the rules:
1. Never Execute a Transaction without Proper Analysis
Yes, sometimes you will see something that looks like a great opportunity, maybe from news or a glance of the trends. These so called opportunities may bring you profits once or twice, but it is only pure luck, you will never survive in forex trading if you let your emotion take over logical decisions.
This has happened to most of the traders when they began; they manage to gain profits by guessing, thinking that they already grasp the secrets of currency trading, and start giving forex trading tips to their friends. This attitude is identical to a gambler in a casino: throw the dice and pray. You will lose everything in no time with this behavior.
2. Learn One At A Time
Foreign exchange has many aspects and elements; it is simply impossible to grasp it instantaneously. If you just start trading, don't throw USD10,000 to your account and experiment with it. Trading currency is similar to gambling; when someone lose, there are always a winner at the other side. These winners will have your USD10,000 with just a few trades, but by reading this forex trading tips you are knowledgeable enough not to do it.
The best ways to go is take it slow. Opening a demo account to support your learning is a good idea. You are able to test various strategies, currency pairs, expert advisor, and trading signals there without concerns. If you have discovered a system that is effective, you can proceed to a mini account for additional test. Nevertheless, if you believe in your system, go on and open a real account.
Please note that "system that works" means the system can give you steady profits at the end of the month without fails and without you have to keep staring the monitors to check your open positions. If you have confidence in it, learn to control your emotion and let it do the task.
Regardless of how good your system is, trading in a poor quality platform will kill your chance to gain profits. Usually, you will get free trading platform from your broker; these are what you need to look in your trading platform/forex broker:
- Provide access to your favorite currency pairs. At the very least it must support common currency pair such as EUR/USD, GBP/USD, and USD/JPY.
- Support stops and limits; these are important for your risk management.
- Provide charting feature, news feed, advices, and research material; to make it short: all that you need to make proper analysis. Whenever possible, a daily forex trading tips can be beneficial as well.
- Customer support available. Whenever possible, find the one that have 24 hours support so you can have someone to help you anytime you are in trouble.
- Currency trading is a worldwide business, so it is good if your broker accept deposit in multiple currencies.
- Simple procedures applied in their services, including withdrawal.
4. Discover how to Use Stop Loss and Take Profit Order
Stop Loss and Take Profit are pre defined orders that you put to close your trades at particular price. Example: you buy GBP at 1.678; then you place Stop Loss order at 1.648 to limit your loss by 30 pips. You also put Take Profit order at 1.708 which means you will close it when you get 30 pips profit.
This is important so that you can prevent your emotion to take part on the "close decision" and mess it up. When the market is move against you, you won't close the position since you are hoping the market to swing back to your side, thus turn potential loss into profits. Most of the time, this kind of of behavior will only create more losing trades. I can't stress this enough; this has made many traders fall miserably. If you don't remember everything that I mentioned in this forex trading tips, remember this: emotion will only make your trader career short.
Other possibility: the market moves in your favor and you start to gain profits, but you still hold it because you want even larger profits. Nobody know when the market will turn against you and when it does, it usually already too late. In both scenarios, greed is the one in movement. But when logic dictates, you can control greed.
Bottom line: you should not rush everything when you learn or trade forex. Spend some time to learn the rules, test, practice, analyze, and read several forex trading tips for the day. However, I don't recommend you to do it by yourself since it can be long and painful process.
