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Some Tips for Wanna Be Traders

Everybody is really prone to make trading mistakes. No where is it more true for new traders. Here are some tips to help you get moving along in the foreign exchange market.

First tip would be before you begin trading with real money and make your investment its best that you practice trading on a demo account. This is a real must before you start trading using a real live account. Most brokerage firms/trading platforms nowadays offer such services before letting a new trader begin actual trading. Practicing on a demo account is a good way to become familiar with the software/program. Some firms actually let you work within actual market trends.

Next tip: When you're new, remember not to overtrade. Start only with only a few transactions a day. A good tip is to work with a coach to evaluate what improvements and mistakes you've made during a particular trading day. Take time to participate in training sessions. It is really tempting to do a lot of trade in a trading day, since the more you trade the greater is the probability of a profit. But being lured to overtrade is a clear road to failure for beginners. Try to stick to smaller trade sizes at first so you may stay in the game a lot longer.

Next tip: Always use of stop loss orders. These are given so you will take a short position if a currency would weaken by a specified percentage. The order will take that position even though losses would be incurred. A stop loss order limits the amount of risk you will take per trade. Most successful traders only risk 1% or less.

Next tip would be regarding a losing position. Remember not to add to such losing positions. If you do, you will eventually take losses - what's the point anyway in sticking to a position that's doomed to fail? Stick to the plan by letting the stop loss orders work for you and veer you away from losing positions.

Next tip would be about current events. Be aware of the news and economic releases of the countries/territories whose currencies you're trading. Remember that such news will move markets. A good tip is to use a forex calendar. That will help you a lot to find news/economic releases that may affect trade. Be especially aware of changes in government and economic policies.

Our next tip is related to the previous one - don't try being a psychic predicting the effects of such news/economic releases. It's completely impossible to know the actual outcome of a particular release. No one can dictate how the market would behave. All you need to do is be ready for what may come. Try to get a handle on technical analysis and fundamental analysis instead as these releases is used there.

Last tip: Never ever force your trades. Some dealers (especially newbie's) would want to achieve a certain amount of money each trading day consistently. This isn't always possible in reality. There'll be days when there aren't any opportunities, so a good tip would be don't trade in such days. Don't force it, else you lose it.

These are a few tips that'll help a new trader. Take time to educate yourself. Be familiar with stop loss orders, study technical and fundamental analysis, and keep participating in training. The forex market is dynamic, it would require wanna be traders to be dynamic themselves.