You’ve done your research on the Forex market, and you’re ready to trade. Congratulations! Now, take a deep breath, because you’re about to discover a whole new world of opportunities.
The good news is you can get started right away with some simple steps that will help you succeed as a Forex trader.
- Take your time to Learn and Create a plan
One of the first things you must do as a trader is to understand what your goals are take your time to learn and create a plan. Having a plan of action when trading is the most crucial thing to do, without a real strategy one should never put their cash on a trade.
New traders come into the market thinking that they know all that as to do with regards to the market, but most really do not have a plan or taken the time to learn. Only after you have taken your time to learn and create a plan, then you can start creating a goal for yourself and start looking for various trading methods that will help in achieving these goals.
Once you have an idea of what your trading goals are and what type of trading will best suit you, then you must work on creating a detailed trading plan that you can use to systemically trade the markets so that the process of trading becomes effortless.
- Research brokers
You have to spend time researching the differences between brokers and carefully go through their policies, status and legitimacy. More importantly, you have to check independent review sites, recommendations and online forums. Read as much as you can about the experiences of other traders to make meaningful conclusions.
Make sure you get a good broker with a good platform. Spend time on investigating the various brokers out there, it is of high importance.
- Use a demo account
Even if you’ve been trading for years, always use a demo account to test strategies Ask yourself this question, why test a strategy with your hard-earned money when you can test using a demo funds to help test your strategies.
- Risk management
Risk management strategies can also come in handy while trading. One should only invest what they can afford. Losses are inevitable and always keep in mind that any time you invest in stock, bond or other asset, you stand to lose all money invested.
As a result, any investor could land themselves in trouble by making moves that are very risky. So, it’s always good to determine how much you can safely invest.
- Choose a Strategy
As a trader, one needs to find a high probability setup and execute on them without letting our emotions get in the way. You need to have a clear idea of how you will make decisions and based on which criteria you will execute your trades.
There are plenty of strategies out there, suitable for beginners, as well as more experienced traders. You need to discover your trading style and see which one works best for you. Some traders use charts to help them determine the best time to execute a trade, along side fundamental analysis, guided by the fundamentals of the economy and also technical analysis.
- Protect yourself
Losses are inevitable. There’s not a single trader in the world who has a clean “profit-only” record. Change your attitude towards losses if you want to be a trader. Focus on your trades and future improvements, rather than losing sleep over small losses and constantly counting your equity.
Disciplined traders always defend themselves by placing a protective stop-loss in the market. By doing this, you’re minimizing your losses and ensuring that you don’t lose all your capital on a single trade. If the trade doesn’t work as expected, you can recover without serious financial consequences.
- Remove emotion from the trading process
Like any market, Forex contains uncertainties and can seemingly operate in a counterintuitive way. While that can be nerve-wracking, it’s important to keep the big picture in mind. Don’t let fear, greed or emotional highs cloud your judgment. Be mentally prepared to accept losses and learn from them whenever possible. Having a solid plan and proven strategies will ground you in reality and help you make disciplined decisions.
Keep your head in the game and stay rational. Your choices need to be dictated by careful observations, calculated setups and realising the true risks involved. Follow your strategies, your knowledge about forex trading and don’t expose yourself to unnecessary risks. You should under no circumstance allow your emotions to dictate your trading activities and carry you away.
- Record your activities
It is important to keep a journal. These journals can help you analyse your investment trends and see which strategies work best for you. The main aim of a trading journal is to monitor the performance of your trading system, help you self-assess all your winning trades and also to showcase how consistent you are with your strategies and techniques.
- Be patient
Forex trading isn’t a skill one can master overnight. No matter how much you think you have learnt, the market will always have something more to teach you or learn from. Always learn to take time away from the computer, particularly after a long and stressful trading sessions. Consider starting a trading journal to track your outcomes, study it regularly and identify any problematic patterns, so you can develop your techniques.
- Never stop Learning
Finally, never stop learning. Studying does require time and effort but in the long run, it will all pay off. As a trader, mistakes can tend to happen but always learn from them. Investigate what went wrong and how you can better yourself.
Start analysing different trends and strategies. Don’t rely only on one strategy, there are a lot of strategies to learn from and keep in mind that there is always room for improvement.
Study, Practice, study, practice!!!!