words Al Woods
So, you’re thinking of getting into the trading market as a side hustle, a hobby or perhaps even a career change. Or maybe you’re a struggling trader, tearing your hair out and looking for a strategy to put you on the profit track.
Whoever you might be, you need not be a loser in the game. There are many tips and tricks you can use to maximise your earnings, give disasters a wide berth and ensure you become a successful trader. Here are five great ones.
To have a chance of being successful, you need to understand how the Forex market works. It seems obvious but many traders ignore this simple fact. It might not be rocket science, but if you don’t take the time to immerse yourself in its workings, you will fail. That goes for beginners and more experienced traders, who should keep abreast of emerging trends and developments. Many Forex brokers offer free tutorials for all stages of understanding that all traders should make continual use of. Strategy is vital in becoming successful and you should familiarize yourself with as many of the various tactics as you can – then use what you learn in your own strategy. Also ensure you understand how to manage your money and always be aware of your core equity – the amount which you have to start trading minus the funds you have in open positions. Make sure you have a good grasp of risk assessment (never risk more than your account can handle), there are many excellent books available online on this subject.
Get the right broker
Using a good broker in Forex trading is vital and beginners should do thorough research before signing up with one. Similarly, more experienced traders should take time to review their options and have a look at other brokers who may offer better deals or have better educational resources. Fundamentally, you should only work with brokers regulated and licensed by an independent organization in the country you are based in. This will ensure they operate in a fair and transparent manner. Platforms should always allow you to analyse prices, take positions and have a variety of trading tools and live news feeds. You should select a broker with an app that allows you to chat online with other traders and real time free demo accounts are a must. Finally use a broker that offers good educational material such as online and offline classes. Beginners – only use brokers that tick these boxes, and well-versed traders should maybe look to move if they are missing out! For FX Forex in UK have a look at review sites that will introduce you to the myriad of opportunities in forex trading and help you to find the best online brokers and trading tools.
Practice makes perfect
People starting out in Forex should only ever initially trade with a virtual demo account – do not be tempted to trade with real money until you have some real time experience under your belt. Be realistic in your practicing – it is pointless opening a demo account with £5,000 when in reality you are going to start with £100. Set your account size to where you think you will start. Accomplished traders should also make use of these accounts to test out new strategies. You’ll gain valuable experience without losing a penny.
Learn from your successes – and failures
Always follow an analytical approach to trading. Learning from the errors you make, and the things you get right is what creates a successful Forex trader. The best way to do this is to start and maintain a trade log, which will note all your trading activity as you go along. Write down the trades you make but also your thinking behind them. Why did you take that decision? Were you following the market, reacting to a big piece of news? Were you sticking to your plan or deviating away from it? Maintaining this diary will help you recognize patterns in your behavior and stop you repeating errors and maintain strategies that are working.
Stay logical… and calm!
Never forget it is highly likely that you are going to lose some money before you hit the profit road, and always remember this is a long-term game. If you have broken even in your first year you should pat yourself on the back. Beginners should be crystal clear about this before they start out, and even experienced traders should remind themselves that you are going to get a lot of ‘downs’ as well as ‘ups’. It often feels like Forex is more of an art than a science, and that’s why discipline is so important. It is all about ignoring impulses and focus on analysing trends and indicators before making informed decisions – if you feel like gambling, don’t! Also remember that while the market runs 24 hours a day it doesn’t mean you need to be trading 24 hours a day. It can be a complex market and trying to trade for long stretches of time will just lead to fatigue – and mistakes. Choose your trading times carefully and concentrate on busy periods of the day, it is easier to discern trends and avoid playing a guessing game.