Your success in Forex trading does not depend but on your experience and emotional stability. However,Benad Consults which happens to be my company, hopes to make your way to it smoother with the help of the following recommendations.
1. Go for the basics
First of all, one should acquire profound knowledge of financial markets and technical analysis, to realize the laws according to which Forex functions and how to make profit on it.
2. Start with a demo account
Starting trading on real accounts straight away does not help to obtain the above mentioned knowledge. While you are busy learning the basics, your capital is literally melting due to your lack of experience. You have a great opportunity to train your strategies on a demo account for a month or more. It is impossible to become a professional trader at once.
3. Get to know trading instruments
Before beginning work on the market, you should thoroughly examine the technical characteristics of the trading platform you chose and make everything clear. It will then help you to save much time and money.
4. Learn your rights and liabilities
Read carefully the documentation, regulating the relations between you and your broker and make sure you have understood everything. You have the right to know all the information concerning your work on the currency market.
5. Begin with small steps
You can employ micro forex accounts to start with. Assess your skills and abilities and develop them further operating with minimum investments.
6. Keep your cool
Do not go beyond your psychological comfort zone: if you feel that you are losing your cool, pass to smaller amounts.
7. Do not play with fire
Do not treat Forex like a money gambling game. As a rule, men of fortune do not manage to stay on this market long. You want forex work to bring you stable income. So, do not ever follow the “sink or swim” principle. Do not put at stake amounts you cannot afford losing.
8. Recognize your defeat
You should keep in mind that losses as such are usual constituents of trading on Forex. Make your conclusions and take a philosophical approach to this fact.
9. Trade within the set limits
Do not strive for opening as many deals as possible: you may fail to control them all. Trade rationally. Trading on several markets simultaneously is rarely successful at first, since they are regulated by different independent factors.
10. Save the money rather than boost
Bring your risks to minimum, even if it results in less profit. Your aim now is to learn how not to waste your capital. At the beginning stage, “saving” is much more important than “boosting”.
11. Consider possible risks
There is always a possibility of unexpected risks. You should have a certain financial reserve so that you could use it in case of a force-majeure situation. Analysts suggest investing not more than 50% of the total capital in trading and not over 10% - in a deal. Ponder over what part of these funds you feel ready to lose in case of bad luck. Set your own level of admissible risk (preferably, not over 5%).
12. Mind Stop Loss
Do not forget to employ Stop Loss. Improper assets management is the major reason for losses. Stop Loss is meant for preventing your losses, so learn to handle it and set it correctly.
13. Keep away from others’ influence
Elaborate your own strategy. Be careful to change it following someone else’s advice. One can carry out one deal only for the whole year and appear to be more successful than many intraday traders. There is no any system suitable for everyone. No one but you bears responsibility for you capital. Once you have shaped your own vision of forex trading and strategy, be critical to what others say to you. Otherwise, you may then regret having followed someone’s recommendation.
14. Control the situation
A profitable deal may in fact turn out to be unprofitable. If the trend seems favourable to you, thoroughly monitor your open positions, shift stop signals to protect your profit.
15. Do not go against the trend
Remember: trend is your friend. Hoping to earn profit, some invest their money when the trend is moving in an adverse direction. Yet, such a strategy is extremely perilous for a beginner!
16. Retreat if not sure
If the situation development falls short of what you have expected, close your positions. You should understand what is going on on the market, as haphazard actions are unreasonable. If you do not feel sure, retreat for a while. Do not waste your time trading unprofitably and do not attempt to have your money back at once. Keep energy to yourself.
17. Make a script of your trading
Fix all you do on the market in writing. It helps to develop analyzing skills. Write down the explanations of this or that decision you made, description of its effects and the conclusions you drew.
If you keep to these rules,you will definitely succeed as a forex trader.