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8 Rules for Forex Market Beginners

Currencies / Forex Trading Jun 17, 2020 - 02:41 PM GMT

By: Submissions

Currencies

Not knowing the right time to stop trade or having no idea why you got a good return are common difficulties for those starting to trade Forex. Beginning traders must follow a series of steps before starting to trade with a live account.

Here are some rules you should not forget. Please read it, put it into practice, and become successful!


1. Practice Makes You a Master

Practice in a demo account for at least six months, learn to manage the MetaTrader 4 platform, and evaluate its advantages and disadvantages. Apply different strategies in different markets and calculate the profit-loss ratio.

2. Do Not be Nervous

Always operate without fear. You must be confident that the strategy you use is winning over time. Be sure that the result of the last operations will not influence the outcome of the next activity.

Plan a trading strategy and stick to it. Make sure you have a plan B in case things go wrong. The markets don't care about your emotions. Regardless of whether you have taken a long or short position, wait some time, and don't make hasty decisions.

3. Study the Market Before Carrying Out Any Operation

 If the market seems to be too calm, wait a bit before opening a position if you are sure about market trends, set pending orders to fire when trends reach desired prices automatically. Track financial news and events as these events affect ongoing operations.

4. Cut Your Losses Early, and Let the Profits Run

It may seem obvious, but most novice forex traders do just the opposite. When the operation is negative, they increase the StopLoss wanting to give more space for the market to react and thus be in the profit they end in the first hesitation to guarantee the gains. In this way, the beginners' losses are significant, and the benefits are small.

If the operation did not go in the intended direction and you believe you should close it, then close it. The first loss is always the smallest. You can continually re-enter when the market reacts.

If a position is in profit, manage it. Be patient and wait for it to reach your target profit, that is, your profit target in operation. This is not always the case. Eventually, the market will give in before achieving its objectives, so it is essential to move your SL when operations are in your favor. That way, you never let a profitable operation become a losing operation. But, be careful not to make the stops too tight. Even a trading operation going in your favor needs some space to retract and then keep going in your favor.

5. Keep a Trading Journal

Many overlook the importance of a trading journal. Simply keeping a record of past transactions is not much use, the point is that without it, you will not be able to comply with the next tip.

 You need to know what you have done that works, to keep doing it. You need to identify the reasons for losing so that you can learn from it and avoid these situations in the future. How do you do this? It's by studying your trading diary.

6. Stay 100% Focused on Trade

It is essential to work in a suitable environment and without distractions. While you are operating, this activity should be the only thing that matters. You must be mindful and focused on the trade.

7. Everybody Makes Mistakes.

Don't regret, learn from them. Don't worry if you have failed transactions. Analyze them, find the mistakes, and try to avoid them next time. Trading in the currency market is as dangerous as it is lucrative. So if you want to stay in the market as long as possible, don't use too high leverage.

8. Money is a by-product of your goals

Just as in a job, the focus should not be the salary, but the quality of the situation, your goal as a Forex trader should not be money, but to operate well, following the rules, being psychologically well. Do an excellent job as a trader and the money will be a natural consequence.

Bottom Line

Every investment takes time to reap benefits, and there are both benefits and losses in every business. Make sure you learn everything you need to know about the forex market before you start trading.

Did you like these tips? So take the time to share with friends who are interested in learning more about the financial market. 

By S N Chatterjee

Copyright 2020 © S N Chatterjee - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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6 Critical Money Making Rules