Over the years Forex has turned into a great money making activity for some people, but there are still Forex traders who are losing money in the currency exchange market.
Here are 10 tips to become successful with Forex trading
Start with a test account
There are many test accounts to choose from. Many offer a month of free Forex trading testing. Make the most of it. If, at the end of the month, you still don’t see an improvement (you still lose money trading) open a new test account on a different trading website and keep on improving your skills.
Many beginner Forex investors rush into real accounts, even if they are still losing money. What makes you think that, if you cannot successfully trade on a test account, as soon as you get a real one (trading your own money) you’ll suddenly be better?
Make the most of your training on test account and, when you start earning money, start trading your money.
Choose one currency pair and stick to it
Another mistake many beginners make with Forex is to choose more than one currency pair, which makes trading chaotic and way too complex for someone who’s just starting out.
Ideally you should start with one currency pair (your nation’s currency for instance) or the most liquid and widely transferred pairs. Stick to your one currency pair until you get more experienced and can expand.
Create a plan for your Forex trading. Stick to it
What do you want from your trading activity? Are you interested in earning a side income? Would you like to make it a full time endeavor?
How much time can you dedicate on a daily basis to your trading education and practice? What would success and failure mean to you?
Set a time frame for your Forex trading trials and start following your plan.
Begin with a small account and grow it organically
One of the best tips for Forex traders is to start with a small account and slowly increase it based on profits. It’s always easy to just pump up more money into it, but this doesn’t mean it’s gonna get profitable anytime soon.
It’s true that a larger account could yield more profits, but it can also lose you even more money. Try to make your account profitable, with small sums and a low leverage and, as soon as you start seeing good returns, you can reinvest your profit into the account.
Trade only when you understand what’s going on
Many beginner traders just get so thrilled with the trade, that they forget about this very simple principle and just make moves hectically, or based on rumors. You should understand clearly the consequences of opening a position and what’s actually happening there and you’ll become more successful.
Don’t add to a losing position
One of the reason many Forex traders are losing money fast is they stubbornly keep on adding to a losing position, thinking it might get better.
As soon as a position is in the red, it’s time to count your losses and stop adding to it. Focus on what works and, when something doesn’t work anymore, just stop and get moving with another trade.
Keep your cool
While many advise you not to think about Forex as poker, since it’s clearly NOT a gambling game, they both have one thing in common: as soon as you let your emotions take control of your actions, you’ll fail.
Greed, excitement or anger should be well controlled. This is why starting small is a great idea, not only you’ll risk little money, but, since the risks and possible gains are minimal, you’ll actually trade more relaxed and could accomplish more long term.