Forex trading is one of the most common trades for beginners. Although this type of trading is often studied, many beginners make mistakes due to psychological factors and lack of trading knowledge. So making a deal doesn't always turn things around right away.
If you are a beginner and want to know how to trade, then you just need to know 10 foolproof tips on how to trade for beginners so you don't make mistakes again and even become an expert.
Tips on How to Play Trading
By knowing the basics, you can quickly master trading. Some trading people believe in accelerating wealth, but this is not the case, as discussed below.
1. Trading won’t get you rich quick
Beginners often think that how to play Forex is an easy get-rich-quick thing. Beginners usually don't think about calculating risk when they enter a high-volume market and expect to make huge profits in a short period of time.
In fact, it can lead to huge losses in the long run. Therefore, even if you have a good understanding and analysis of technical and fundamentals, you cannot see the price movement properly.
2. Don’t make erratic decisions
Before you know how to trade correctly, you need some entry and exit strategies, and even if these are very simple, you don't enter the market on your own.
You know, random entry without any basis is no different from gambling.
3. Don’t overuse leverage
You need to use leverage carefully as it is well known that leverage is the main attraction of forex trading. They usually compete to offer the highest price leverage. Basically, multiple positions can be opened with high leverage due to the low minimum margin.
However, if the price movement does not work out as expected, you will be incurring a loss to cover what happens.
4. Set early hedging stops
Over time, traders will dare to hold losing positions indefinitely, hoping the price will change direction. However, this is not the case in practice, as such trades tend to destroy accounts as you yourself are not limiting the risk.
5. Don’t Involve Emotions When Trading
If you know how to trade, try not to get emotional. Because emotions in trading don’t make you think clearly and can eventually ruin your own trading account. From now on, you must practice controlling your emotions while trading and don't try to force the market will.
6. Be consistent and disciplined with your trading strategy
Before you start trading, try to test your strategy and don't change it too quickly. When you find a new strategy that is more appropriate and consistent with your chosen strategy, make sure you use it with discipline.
7. Application of fund management
The next point is that you need to implement money management. As we all know, money management has not only risk per trade (stop loss), but also a long-term risk-reward ratio that determines the peak of your trading success.
8. Keep up with market development
For beginners, it is necessary to understand how the world market is developing. This will help you choose which currency to trade. To get the most out of your trading, you should choose strong and weak currency pairs.
9. Where to monitor market movements
Even if you have good trading knowledge and analytical skills, you should still monitor your positions when making prospective trades. Because even if you use full pending orders with stop loss and exit levels, you need to monitor them to find out how the market price moves.
10. Have a clear trading plan
As a trader, you should avoid planning with a net profit goal of how you want to earn it. However, the layout of the plan can face the market. Basically, an unclear trading plan can make you reluctant to make your own decisions. To do this, you need to know how the trading plan is structured.
See how often you trade within a week or two or a month (if you are a day trader).
Choose the right time to trade (especially if you are a part-time trader).
So, 10 foolproof tips for successful trading. Focus on the trading process, not the profit earned. You can try trading from scratch by opening a FOREXimf demo account for free and get information about trading from experts.