you need to know as a Beginner in the Forex Market from wisepowder's blog
Forex trading has caused large losses to many inexperienced and
undisciplined traders over the years. You need not be one of the losers.
Here are twenty forex trading tips that you can use to avoid disasters
and maximize your potential in the currency exchange market.To get more
news about WikiFX, you can visit wikifx official website.
1. Know yourself. Define your risk tolerance carefully. Understand your needs.
To profit in trading, you must make recognize the markets. To recognize the markets, you must first know and recognize yourself. The first step of gaining self-awareness is ensuring that your risk tolerance and capital allocation to forex and trading are not excessive or lacking. This means that you must carefully study and analyze your own financial goals in engaging forex trading.
7. Do what you understand.
Simple as it is, failure to abide by this principle has been the doom of countless traders. In general, if you are unsure that you know what youre doing, and that you can defend your opinion with strength and vigor against critics that you value and trust, do not trade. Do not trade based on hearsay or rumors. And do not act unless you are confident that you understand both the positive consequences, and the adverse results that may result from opening a position.
8. Do not add to a losing position.
While this is only common sense, ignorance of the principle, or carelessness in its employment has caused disasters to many traders in the course of history. Nobody knows where a currency pair will be heading during the next few hours, days, or even weeks. There are lots of educated guesses, but no knowledge of where the price will be a short while later. Thus, the only certain value about trading is now. Nothing much can be said about the future. Consequently, there can be no point in adding to a losing position, unless you love gambling. A position in the red can be allowed to survive on its own in accordance with the initial plan, but adding to it can never be an advisable practice.
9. Restrain your emotions.
Greed, excitement, euphoria, panic or fear should have no place in traders calculations. Yet traders are human beings, so it is obvious that we have to find a way of living with these emotions, while at the same time controlling them and minimizing their effect on our lives. That is why traders are always advised to begin with small amounts. By reducing our risk, we can be calm enough to realize our long-term goals, reducing the impact of emotions on our trading choices. A logical approach, and less emotional intensity are the best forex trading tips necessary to a successful career.
10. Take notes. Study your success and failure.
An analytical approach to trading does not begin at the fundamental and technical analysis of price trends, or the formulation of trading strategies. It begins at the first step taken into the career, with the first dollar placed in an open position, and the first mistakes in calculation and trading methods. The successful trader will keep a diary, a journal of his trading activity where he scrutinizes his mistakes and successes to find out what works and what does not. This is one of the most importance forex trading tips that you will get from a good mentor.
11. Automate your trading as much as possible.
We already noted the importance of emotional control in ensuring a successful and profitable career. In order to minimize the role of emotions, one of the best of courses of action would be the automatization of trading choices and trader behavior. This is not about using forex robots, or buying expensive technical strategies. All that you need to do is to make sure that your responses to similar situations and trading scenarios are themselves similar in nature. In other words, dont improvise. Let your reactions to market events follow a studied and tested pattern.
12. Do not rely on forex robots, wonder methods, and other snake oil products.
Surprisingly, these unproven and untested products are extremely popular these days, generating great profits for their sellers, but little in the way of gains for their excited and hopeful buyers. The logical defense against such magical items is in fact easy. If the genius creators of these tools are so smart, let them become millionaires with the benefit of their inventions. If they have no interest in doing as much, you should have no interest in their creations either.
1. Know yourself. Define your risk tolerance carefully. Understand your needs.
To profit in trading, you must make recognize the markets. To recognize the markets, you must first know and recognize yourself. The first step of gaining self-awareness is ensuring that your risk tolerance and capital allocation to forex and trading are not excessive or lacking. This means that you must carefully study and analyze your own financial goals in engaging forex trading.
7. Do what you understand.
Simple as it is, failure to abide by this principle has been the doom of countless traders. In general, if you are unsure that you know what youre doing, and that you can defend your opinion with strength and vigor against critics that you value and trust, do not trade. Do not trade based on hearsay or rumors. And do not act unless you are confident that you understand both the positive consequences, and the adverse results that may result from opening a position.
8. Do not add to a losing position.
While this is only common sense, ignorance of the principle, or carelessness in its employment has caused disasters to many traders in the course of history. Nobody knows where a currency pair will be heading during the next few hours, days, or even weeks. There are lots of educated guesses, but no knowledge of where the price will be a short while later. Thus, the only certain value about trading is now. Nothing much can be said about the future. Consequently, there can be no point in adding to a losing position, unless you love gambling. A position in the red can be allowed to survive on its own in accordance with the initial plan, but adding to it can never be an advisable practice.
9. Restrain your emotions.
Greed, excitement, euphoria, panic or fear should have no place in traders calculations. Yet traders are human beings, so it is obvious that we have to find a way of living with these emotions, while at the same time controlling them and minimizing their effect on our lives. That is why traders are always advised to begin with small amounts. By reducing our risk, we can be calm enough to realize our long-term goals, reducing the impact of emotions on our trading choices. A logical approach, and less emotional intensity are the best forex trading tips necessary to a successful career.
10. Take notes. Study your success and failure.
An analytical approach to trading does not begin at the fundamental and technical analysis of price trends, or the formulation of trading strategies. It begins at the first step taken into the career, with the first dollar placed in an open position, and the first mistakes in calculation and trading methods. The successful trader will keep a diary, a journal of his trading activity where he scrutinizes his mistakes and successes to find out what works and what does not. This is one of the most importance forex trading tips that you will get from a good mentor.
11. Automate your trading as much as possible.
We already noted the importance of emotional control in ensuring a successful and profitable career. In order to minimize the role of emotions, one of the best of courses of action would be the automatization of trading choices and trader behavior. This is not about using forex robots, or buying expensive technical strategies. All that you need to do is to make sure that your responses to similar situations and trading scenarios are themselves similar in nature. In other words, dont improvise. Let your reactions to market events follow a studied and tested pattern.
12. Do not rely on forex robots, wonder methods, and other snake oil products.
Surprisingly, these unproven and untested products are extremely popular these days, generating great profits for their sellers, but little in the way of gains for their excited and hopeful buyers. The logical defense against such magical items is in fact easy. If the genius creators of these tools are so smart, let them become millionaires with the benefit of their inventions. If they have no interest in doing as much, you should have no interest in their creations either.
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