This tutorial will give you the best Forex trading tips that you need to know in order to expect a huge amount of profits.
- Defining goals for yourself
- Trading Tips for Forex success
- How to find a suitable Forex broker
- Know-how: Stop-Loss order
When starting trading with real money, one must have experience in trading using demo accounts or virtual interfaces that allows virtual trading. Losses affecting real money make you angry and lead you to even worse decisions. So it is better to follow Forex trading tips we provide you to achieve great goals in Forex.
Forex Trading Tip 1
Create your own trading plan and define goals you want to achieve.
Every successful trader in Forex trading has their own trading plans created in the initial stages of his trader life. Before entering the real market, most of them use a demo account to test their trading plan. When testing own trading plans, each successful individual creates their own goals by means of profit. Stepping into the real market is achieving respective goals by means of profit earned by real money.
Forex Trading Tip 2
Finding a suitable broker
Finding a suitable broker seems difficult if you are a Forex beginner. Because it takes a reasonable effort of research to understand the market and what factors are exactly to be considered when choosing a broker. Here, we have listed the essential factors that need to be considered prior to registering with a broker.
Match your interests and needs
Before trying to find a broker, forget about everything and consider of your own interests and needs first. Whether you are going to trade a lot or a little? or whether you want to trade a lot and do scalp trading? If so, try with an ECN broker. ECN broker (Electronic Communication Network) is a computer-based forum or a network that assists in trading of financial products especially outside the SE (Stock Exchange). It involves in spreading orders by market makers to other parties and order execution. ECN will demand you to pay a fraction percent of each trade you do as a commission.
A standard lot in dollars is $100,000. But if you don’t have at least the half amount of a lot, do not open a standard lot account. So what to do with a small amount like $7000, $10,000, $25,000 then if it is the much you have for the moment? you might think. Well, to be on the safe side, you may comfortably proceed with opening a micro lot account.
How good the broker is to you
Look for a Forex broker who can be easily contacted anytime you want to have assistance. Email to them and get the questions in your head clarified and see their responsiveness. If they seem to fail to give you fast and better service. Cut it off from your list.
Also make sure that your broker comes from a financially established origin like USA, Canada, Australia, New Zealand, UK etc. (they have an established financial system)
Reviews can be misleading
Lot of reviews online on a website or a forum seem to be fake. Because they look for their market and promote themselves before ensuring their product meets customer satisfaction. Therefore make sure that you choose a broker forum from a credible resource.
Apart from that, please note that there also could be bad reviews for a broker due to a customer’s failure. That customer may be blaming the broker. But actually, it may not be the broker to blame. But himself for performing a bad decision in Forex trading.
Therefore we advise you to be wary of the reviews available on the internet and do careful research objectively, consider these facts and arrive at a good decision in finding a broker.
Put the broker into the test
Begin with creating a demo account. It gives you a whole idea of what’s happening around and helps you be familiar with the environment. Keep in mind that your orders get executed instantly. If so, it’s a hint of good service. But do not stop there, it’s not the only thing. See whether it’s a stable platform too. Now check out the other stuff such as their offerings, trading conditions etc.
If you are satisfied with the demo account after being with it for several weeks, consider opening a live account. But please note that it’s still risky to invest all the money you have. If you have $10,000, invest $1000 first and see. If you are comfortable doing with your live account, Start questioning them and contacting them to see whether they reply fast and attending to your problem and help you sort out your problem.
Another thing to consider is how easily you can withdraw your money. Try with a small amount and check whether it’s easy. If so go ahead with the rest of the dollars you have.
Forex Tip 3
Invest a small portion of your capital.
Invest 25% of 20% of your total capital as your initial investments. Risking a large portion of your capital lets you get out of the trade very soon. Successful Forex strategies depend on predictions and pre analysed data. Even our predictions and analytics look good, market trends and patterns can turn our strategy upside down within seconds. As an amateur trader, strictly limit your investment into “25% of 20% of total capital” as your very first positions. After a few trades, you can increase your trading volume up to ⅙ of your total.
Forex Tip 4
Stick to your own trading plan
It is really important to stick to your own plan. Some of you like to create short term plans while some of you like to create long term plans. Stay focused on your plan until you reach your goals.
Forex Tip 5
Do not open many positions in your initial stage
It is better to handle a few positions first according to your trading plan. Then you may see many opportunities and signals that make you open new positions due to the impulsive desire for profit. But do not be so eager to earn money. Stay with your own positions until you get your final result, a profit or a loss.
Forex Tip 6
Stop-Loss Order, Market Order, Limit Order
- Stop-Loss order- used mostly to exit a position/market when it reaches a certain level by means of minimizing the loss. Stop-loss orders are handled by your broker as ordered by yourself. After opening a position, you hang a little period of time according to your trading plan to close the position. During this period, exchange rates may fall below a certain level causing a loss to you. To avoid these types of losses, you pre-order your broker to close the position you already opened when it reaches a certain situation and it calls as Stop-Loss order.
- Market Order- If you want to enter or exit a market immediately to take the best advantage from the best price you are getting for your position, a market order is what you use to order your broker. When you buy, you need to enter the market at or above the best ask price. When you sell you need to enter the market at or below the best bid price. To achieve both results you should make a Market Order through your broker. There is one main problem that no one guarantees about the order work as we expected and that’s called as a slippage.
- Limit Order- Limit Order uses to avoid slippage. Using a limit order, one can buy at or below the current market price and sell at or above the current market price.
Forex Tip 7
Analyse using Multiple Time Frames
When analyzing charts, one can refer the fluctuation of various types of data with time. The fluctuation of any data with a longer period of time shows patterns and trends. To identify these trends and patterns, one can change the time axis of any chart to different parameters such as seconds into minutes, minutes into hours, hours into days, days into weeks... etc. The longer the time duration we take the higher the possibility of identifying trends and patterns.
Forex Tip 8
Never close the position too early
A trader in the initial state makes mistakes by closing the position too early deciding a trend ends as it visualizes in charts. Trends flow through a long period of time than they visualize in charts. If a trader closes the position too early, the exact transaction cannot take the full advantage of profit potential. Identify the trend carefully and stay with your transaction until the end of the trend.
Forex Tip 9
Close unsuccessful positions as quickly as possible
If a position goes to a loss and looks unsuccessful, never wait for a change in trend/pattern until the position becomes successful. Close the transaction immediately and you can move to a new position according to your trading plan.
Forex Tip 10
Never play against the Trends
If you take your own decisions in trading, you must refer your own trading plan each time. When you feel that your plan does not work well, you may want to take sudden decisions due to your emotions.
Forex Tip 11
If you are lost, follow a Pro
If you are not confident about your own trading plan or your decisions, do not continue. Because, then there's a tendency you might get wrong decisions due to the lack of knowledge, experience or planning.
But what to do under such circumstance? It's a simple course. First go for an option like social trading and follow a pro trader there and copy his/her successful trades. While you feel you on tract continue using your brain to take every advantage you see in trading.