Forex trading is one of the largest financial markets where trillions are traded on a daily basis. So, whether you are an expert trader or just a beginner, following a forex trading strategy, managing your risks or finding the best forex platform can be daunting.
The journey to improving your forex trading performance involves hard work, patience and practice. At the same time, you need to apply forex strategies and trading tips that will help you understand the fundamentals and technical sides of forex trading to enable you to trade more consistently.
So, what are the tips, tricks and tactics that will help you trade better and profitably? In this article, we will look at the top forex trading tips that will help you become a better trader.
13 Forex Trading Tips
Find The Right Trading Platform
So, where do you start forex trading? You cannot trade without a broker and trading platform, so first you will have to find one.
It is vital to choose the right trading broker – so review and compare the pricing, their execution styles, the platform they offer, their asset list, the quality of customer service and whether they complement your trading style and, most importantly, whether they are authorised with a license, before you finalise on one so that you have the best trading experience.
Create A Forex Trading Strategy
Before placing your first trade, you need to create a trading plan.
For example, what do you want to achieve in a trading session? Do you have any profit goals? And what will be your stop-loss or risk tolerance levels?
Take out some time to have an action plan ready. Once you have a plan in place, make sure to work within your plan’s parameters every time you trade.
When you have your trading strategies sorted out, practice them to better your forex trading performance.
Open a demo forex trading account and learn the basics while practicing in real market conditions with various strategies, during various geopolitical events, with varying stop-losses etc. Later you can trade on your live forex trading account, but with smaller amounts so that you do not risk your own capital.
Forex trading is a continuous learning process. Regardless of how experienced you are, there is something to learn every day.
You will find a number of forex trading courses available both online and offline where you can access resourceful articles, guides, e-books, webinars, blogs and tutorials.
Keep A Clear Mindset
Your mindset plays an important role in your failure and success. It is crucial to have an appropriate mindset to make informed, balanced and unemotional decisions to become a successful forex trader.
Set Out With A Clear Goal
Entering any financial trading without a plan is risky. It is even more so with forex trading. Start out with a goal that is clear and measurable and hold yourself against that. While it is prudent and smart to be flexible and make required adjustments to a set course, it is important to be on track with the master plan.
Set yourself a goal for a certain period of time and a planned rate of return on a decided capital. Avoid the urge to over trade just because the market is favourable and the going is good. Similarly, don't be shy of booking losses if there is a falling market and your plan goes awry.
Do Your Research
Before the market opens, research and take a good look around.
What is happening in the world of economy? Are financial markets around the world up or down? When are economic data due? Which are the currency pairs that have the clearest conditions of them all?
Read More: Top 10 Forex Pairs To Trade
Keep A Record
Be a meticulous record-keeper of both your wins and losses.
If you place a winning trade, you would want to know how and why it happened. More importantly, you would want to know the same details upon losing. Take note of the exit and entry conditions of each trade, the time, market close and open for the day, the assumptions and information behind your decisions and other details.
Learn To Accept Losses
Losses are an inherent part of forex trading, so learn to accept failures.
If you cannot accept a loss and admit you were wrong, you will never become a successful trader.
Perform Weekend Analysis
It is important you use the help of technical analyses and fundamental analyses to find potential trading opportunities in moving markets.
While fundamentals influence the long-term prospects, technical analysis helps you understand position based trading. You need to use a combination of the two to be able to quickly absorb the information you are analysing for each trade.
Stop-loss is an important element of any type of financial trading, even more so with forex trading.
You can restrict your losses by implementing a correctly placed stop-loss. This eliminates the risk of losing all of your money on a single bad trade.
Follow Experienced Traders
Keep an eye on how big players invest; understand how they make crucial trading decisions.
Following other traders who are veterans and experienced in the trade help you make progresses in your forex trading performance.
Do Not Be Afraid To Experiment
While being aware of your set goals and sticking to your master plan is important, remember that forex trading can be quite a volatile function and there will be many variables. Therefore, it is just as vital to be ready to make adjustments and be creative in fine-tuning your strategy when and where required.
Stay alert, do your homework and keep an open mind. Being ready to experiment, even while weighing up a situation judiciously, can be a trait that will come in handy while navigating the choppy markets of forex trading.
The Bottom Line
Being successful in forex trading is based on a combination of preparation, strategy, discipline, experience and consistency. As a beginning trader, we hope that the above-mentioned forex trading tips will help you create a structured approach to forex trading.
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