Before I say anything else, I will like to state that, in Forex trading you can make big profit as well as incur an irreversible loss. 50% of people in the currency sector lose and regret it. Prospective Forex trader do not always have all the right information before making the decision to commit to this interesting but also challenging industry. If you’re thinking about becoming a Forex trader, there are a few things that you should be aware of.
Just like any other business, Forex trading is a business, that you can make profits or losses. It is however your business behavior, your approach and your skills that determine whether you will lose or make profit in Forex trading. You need to know and understand what you are doing to become a successful Forex trader.
Although some people will tell you that as long as you have a computer and the internet as well as the money then you can start trading Forex. There are a few other things you need to do before you trade
Forex. Not everyone who joins the race will win or at least finish it? Yes, first things first, you need to play it well.
If you’re just starting out in Forex and need some guidance and Forex trading tips then you’re in the right place.
First, invest in the knowledge: It’s smarter to find out about the foreign exchange market before you start. Get Forex Trading Tutorials and read them. You can also subscribe to some Forex newsletters and online resources to get some good knowledge before you start to cut with your money.
For each trade that you make, make sure you also specify a stop loss level. Trading without a stop loss is like playing football without a jockstrap! Simply, do not do it!
Ideally, you should also have a profit target that will help you know when to place the trade. But can always revise this later.
There’s a fine line between logic and emotion that causes many traders to trade live before they are truly ready. The reason that you should have these is because it will force you into the habit of having a solid logical reason for each trade that you make. The simple fact is that if you don’t even know where you should place a stop loss, let alone your profit target then you are trading on “gut” or “instinct” and not logic.
If you keep trading this way, you might get a lucky streak but you will soon regret it when you lose it all and possibly more. I have seen this happen to way too many traders.
Understand Your Markets
If you’re using logic then you need to understand your markets. You really don’t need much knowledge at all to trade profitably.
Just pick a few markets and observe them. It’s easiest to start with the majors like EURUSD, GBPUSD and USDJPY. Check the Forex news websites and monitor these markets closely. You’ll start to notice some trends in the way that the market reacts to news. You’ll start to get a feel for the direction of the market. And if in doubt, then you always have another option.
Do not be tempted to trade currencies before you understand what it takes to be successful. It’s like jumping on the football field before playing with boots.
You can simply pay a small fee to outsource it. Buy some good quality Forex signals or a good auto trading “robot” (a predictive model). The cost of these is far less than the money you will make, so much so that you will consider it negligible.
But I like to repeat this, learn, learn and learn before playing with your money. Most people who lose never take the time to learn. –ezinearticles