Friday, 20 October 2017
New In Forex? 5 Do’s And Don'ts To Keep In Mind
Starting a new activity is never easy. Especially when that activity involves the risk of losing money, your money. Forex is a transparent, very liquid and highly active market available to most people out there. Want to get it?
However, in order to make profits and avoid closing your account empty handed in the first month of trading, better keep these few tips into account:
Do’s
- Before you even begin to trade, work on a plan. Just like you should do with most things in life. You first plan, then you act. Same rule applies for trading.
- Try understanding yourself and then the markets. Finding trends and pivot points will not help you succeed unless you know exactly what type of investors you are, what risks you are willing to take on and what are you looking for.
- Never stop learning. Education is not required to open an account, but hell yes it is required to keep alive. Yes, education is a must to stay on top of the game. No, no one said anything about tuition fees. Nowadays, most information can be access for free in the internet. Education yourself doesn’t mean going to an university.
- Learning from a book is fine. But learning in the real world is much more effective. However, in the world of trading you could lose money. For such reason, open a demo account and start learning basic operations from day one without putting your bucks on the line (and nerves). Demo accounts are of great help when it comes to learning.
- Make a list of your most useful resources and techniques. And improve it overtime. Pick your best favourite technical indicators and polish them for better results.
Don’ts
- Think trading is an easy-money scheme. Wronggg. While you’ll find thousands of sources around the internet advertising easy returns in Forex, the truth is… it simply doesn’t work that way. Maybe you are lucky and in your first day trading make a profit without any knowledge or practice. And maybe you lose it all next day.
- Feel depressed for taking a hit. Everybody in this industry did. We all had to face some losses but we are still here to tell about it. The important thing to remember is risk management. Limit your risks to 1% percent of your portfolio for a single position.
- Go for the messy charts. The fact is just a few lines here and there are more than enough to help you understand where the market is heading and where your money should be placed in. Believe us, the more lines you create, the less effective it becomes.
- Try a new system every week. Come on… Give your system some time to adjust and be proved wrong or good. If you are modifying your trading system/strategy every week, then be sure to have a 9-to-5 job because you’ll need it rather soon.
- Be too emotional. Emotions should be kept apart in this industry. And we all know how difficult that is, but there is no other way around. Emotions can and will increase the risks involved in trading. Stay away from fear, sadness and anger. Embrace logic thinking.
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