At first, when new to forex trading, it is easy to get lost, overwhelmed, or confused by all the information you meet online concerning trading. In this case, it is wise to take matters slowly, learn the trading norms, and seek help from a professional without rushing things. The following are ten forex trading tips you can’t afford to overlook when you are new to trading. If you are a newbie, ensure you absorb these tips before immersing yourself into the trading world.
10 Pro Trading Tips for Beginners
1. Don’t Rush in Trading Without Proper Training
It is quite interesting to see all the individuals ready to risk their finances in the market without thinking of proper training in online trading. After losing so much money, they decide to get some training. This is like trying to fly a plane without taking flight classes. Ensure you get some training before opening a trading account.
2. Never Put Stop Losses Too Close
This one is huge, and it can take you a lot of time and loss of money to finally realize it. You must put your stop losses a safer distance away from the entry price. Placing them too close will get you stopped for a loss before the market could turn in your favor. You may have had the right trading ideas; however, since you placed your stop closely, you incur substantial losses and stopped before your anticipated move.
3. Don’t Over Trade
To win the trading race, you have to begin on a slow and steady tone. When you enter the trading world with high intensity, you will be vulnerable to emotional trading which results in account distraction as well as self-esteem. It is not a must to trade too much if you need to make more money.
4. Always be Realistic When Trading
Being realistic, perhaps, is the most challenging yet most important thing you can do if you are a trading newbie. Do not think that you can just quit your current job, stuff $2,000 in your account, and head over to the beach to start trading. If anyone is telling you that you can do it this way, run from them very fast. They mostly are scammers and don’t understand a thing about trading. To succeed in trading online, you will encounter a myriad of mental traps and mistakes on your trading journey. You must be realistic and grounded to achieve trading success.
5. Focus on the Price Action
Believe it or not, there was a period in time when people used computers to trade. Hard to believe, but its pure truth. But how did they do that? It wasn’t with Stochastics, RSI, or some automatic trading software obviously, but using Price Action. They could hop into exchanges and study the tape. By doing so, they could interpret changes in price or price action. This method works, and there is no need to mess up your charts or brain with too many over complicated indicators.
6. Understand the Basics First
Most newbie traders are hopping right into the market minus background knowledge on trading markets. To ensure a strong trading foundation, you need to make time and study the forex markets and solidly grasp the jargon involved, etc. before diving into it and establishing a trading strategy.
7. Learn Just One Trading Strategy and Stick To it
The biggest mistake that beginners make repeatedly is to switch from one trading strategy to the other. If you decide to use a coherent strategy like the Price action method, you have to study and master it thoroughly before you proceed. Jumping from one approach to the other, you will be operating illogically, and you can quickly lose money. There are many e-books and trading materials online concerning algorithmic trading strategies you can use to your advantage.
8. Don’t Be Overwhelmed
It is possible to get overwhelmed with all the trading strategies and too much information as a newbie. The best way is to avoid this altogether by finding a good mentor to learn and get motivation. You can learn many things from their failures to success.
9. Don’t Freak Out When You Fail
Most traders new in the forex trading usually freak out when a trade moves against them. This problem is really in live trading rather than in demo since there is an emotional difference between them. It is quite reasonable when a trade moves against you. For this reason, let your trades play out and do not be quick to close them simply because a trade moved against you.
10. Focus on the Daily Chart
You will have to take time and learn how to interpret the price action while trading on the daily chart time frame. This is important before doing anything else.
Save your money by investing in trading education. Understand how to properly trade before hopping right into it after which the money will come running to you. Follow these trading tips and thank me later.