Take the time to study the currency pairs and what affects them before risking your capital. It’s an investment in time that could save you the proper amount of money.
2. Make a Plan and Stick to it
Creating the trading plan is a critical component of successful trading. It should include your profit goals, methodology, risk tolerance level, and evaluation criteria. Once you have the plan in place, make sure each trade you consider falls within your plan parameters.
The excellent way to get a feel for Forex trading is without any of the risks. Put your trading plan to the analysis under a real market condition with a risk-free demo account. You will get a chance to see what it’s like to trade currency pairs while taking your trading plan for an analysis drive without risking any of your capital.
4. Forecast the Weather Conditions of the Market
Successful traders require to be aware of market conditions and then plan accordingly.
Fundamental traders prefer to trade based on news and other financial and political data, and Technical traders prefer to technical analysis tools such as Fibonacci retracements and other indicators to forecast market movements. Most of the traders use a combination of the two. No matter what your style, it is important you use the tools at your disposal to find potential trading opportunities in moving markets
5. Know your Limits
Know your limits. It includes knowing how much you are willing to risk on each trade, setting your leverage ratio by your needs, and never risking more than you can afford to lose.
6. Know Where to Stop Along the Way
You don’t have time to rest and watch the markets every minute of every day. You can better manage your risk and protect potential profits through the stop and limit orders, getting you out of the market at a price you set. Trailing stops are especially helpful, and they trail your position at a particular distance as the market moves, helping to protect profits should the market reverse. Always keep in mind, however, that placing stop and limit orders may not necessarily limit your risk for losses.
7. Check Your Emotions at the Door
Revenge trading rarely ends well. Don’t let the emotion get in the way of your plan for successful trading. When you have the losing trade, don’t go all in to try to make it back in one shot, it is smarter to stick with a plan and make the lost back a little at a time then to find yourself with two crippling losses suddenly.
8. Keep it Slow and Steady
One key to trading is consistency. All the traders have lost money, but if you follow the trading plan and take it a trade at the time, those losses will likely pose less of the threat to an overall strategy. Teaching yourself and creating the trading plan is good, but the real the test is sticking to that plan through patience and discipline.
9. Don;t Be Afraid to Explore
While the consistency is important, don’t be afraid to reevaluate your trading plan if things aren’t working as you imagined. As your experience grows, your needs may change, your plan should always reflect your goals. If a goals or financial situation changes, so should your plan.
10. Choose the Right Trading Partner for You
It’s important to choose the right trading partner as you engage the Forex market. Pricing, execution, and the quality of customer service can all make the difference in your trading experience.