Latest posts by Verne Johnson (see all)
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As everybody who’s ever done Forex trading knows, it’s really hard to keep a good winning record on a regular basis. If you can’t end every week with a good profit, don’t let it get to you. It doesn’t mean you’re bad at what you’re doing. It just means you need to do better. Or when you win, you feel that the winning is random and has more to do with luck than with actual strategy. If that’s the state of your Forex trading, you’re not alone. Many successful traders have struggled at their early beginnings as well. It took them a lot of time, money, and costly mistakes to develop their winning strategies. But you don’t have to make the same huge blunders and pay for them in order to learn. Here are proven Forex trading tips that work.
1- Your Broker needs to Fit your Experience Level
Being a beginner but with a broker that’s geared for more experienced traders is one of the most common mistakes many people make. Unless you’re really comfortable with the basics of trading and have at least a passing knowledge of advanced concepts, then a high-level platform is not for you and you should choose a broker that helps you learn and grow. Mismatched platforms lead to either making technical mistakes that would come in the way of your trading or ending up wasting a lot of time sorting through irrelevant information or basic tools on the platform that don’t help your trading style and strategies. It’s better to test the platform with a virtual account to determine if it’s the right fit or not before you commit.
2- Pick a Strategy and Perfect it
While it’s important to find a good strategy that works for you, you shouldn’t waste a lot of time trying every strategy out there. Do your research and find one that suits your style and needs and work it hard until you know the ins and outs of said strategy. That is the fastest way to get ahead in the market. Changing strategies all the time won’t get you far.
3- Money Management is your best Insurance against going bankrupt
You know the golden rule of investing is not to invest money you can’t afford to lose. Money management will help you define a budget and sticking with it. That way your mistakes won’t eat up your funds and one big loss won’t take you out of the market altogether. This means that for every trading day you set aside a percentage of your overall capital and you don’t go over that allotted amount. Discipline is important and it will see you last in the market while many traders burn out and throw in the towel. Remember it’s imperative to make mistakes but without a sound money management plan, you won’t be around for long to learn from those mistakes.
4- Watch those Emotions
A common mistake that many novices in the Forex market make is to let their emotions get the better out of them. One loss can trigger anger and frustration which will cloud your better judgment and lead to even bigger mistakes. Or it might be the opposite. You get a lucky break and suddenly you feel overconfident. Your ego comes in the way and you start taking huge risks and making mistakes you can’t afford. So don’t let your emotions affect your decision making. Learn to watch those feelings arise and when they take control, that’s when it’s time to take a walk. You can always trade another day.
Consistently making a profit in trading is not impossible if you choose the right broker, stick with one strategy and excel at it, learn about money management to play the long game, and finally learn how to keep your emotions away from your trading decisions. Sounds easy? It is. Now go make some money.
Featured image: Pexels