It can be difficult for a beginner to Forex to find useful information. Many sites like Broker.cex.io and even specialized companies are constantly trying to cash in and make money from inexperienced traders, pulling money out of them for literally every advice or service.
The reputation of both the trader’s profession and the entire Forex financial market suffers from such a mercantile policy of individual Internet resources and brokerage companies.
Trying to slightly reverse the current situation, we offer all the information available to us for free, including these 7 free tips on how to improve the efficiency of Forex trading.
Tip 1. When developing your trading tactics and trading methodology, be sure to reconcile it with the available data on the recent trading history and test it on a demo account. Never experiment with real money, no matter how win-win the situation may seem, always start with a demo account or with a forex tester program.
Advice 2. Follow trends constantly. Make it a rule, when starting a trade, to view not only the current trend of your period, but also a longer period. For example, when trading on a daily time frame, ask what events occur on a weekly or monthly basis. Are you going against a trend in a larger time frame? View charts in a shorter time frame to find convenient entry and exit points.
It may be useful for you to study the trader’s forum, where you can learn a lot of useful things for yourself: how to trade with the trend, how much to start trading on Forex, how to use support and resistance levels correctly, and much more.
Tip 3. Don’t risk too much money. The golden rule of Forex trading is that you shouldn’t risk more than 5% of your deposit per trade. Ideally, you shouldn’t even cross the 2-3% line. Limiting your risks wisely will help you avoid losing too much on bad trades and easily tolerate losses.
Tip 4. Make sure that the trading tactics you choose match your personality and stock trading style. Find out for yourself whether it is convenient for you to engage in scalping, or is it preferable to open positions designed for long time intervals? Whether you can closely follow the charts of exchange rates, or do not have enough free time for this. Especially for your convenience, at the beginning of the description of each trading strategy, it is always written for what period it is designed.
Tip 5. No matter how optimistic financial results and expert advice motivate you to take action, only trade when your performance confidence is based on empirical data: indicators for trading strategies, indicators related to the stock market, “iron” market patterns.
Tip 6. Try to adhere to the ratio of possible profit and loss of 2 to 1. Statistics show that the average success of traders’ deals does not exceed 60%. Therefore, the only way to remain in profit after all victories and defeats is to always double your stake in case of a successful outcome. It is very easy to monitor the observance of the proportion by the values of stop loss and take profit orders, which are simply mandatory for a novice trader.
Tip 7. Never attempt to make the stock market “take again.” Close positions without regret as soon as they become unprofitable. Experience demonstrates that, indeed, many traders just don’t want to accept their bet was lost.
They add more and more positions to it, move the stop loss, thereby increasing their losses, to the delight of brokers and large banks. Do not give in to emotions and admit defeat before it turns out to be too serious consequences.