FOREX TRADING FOR BEGINNERS: THINGS TO AVOID
Today’s blog is going to be one which aims to support new forex traders by giving them key tips on what to avoid when starting their journey trading currencies.
Wealth maximisation can effectively take place by practicing strategies designed to help trade forex for beginners wisely. But as it is fraught with risks, mistakes can make you lose your precious time, money, and hard efforts.
There are certain things that you need to clearly avoid. Avoidance of such mistakes is always part of fruitful risk management when trading forex for beginners.
Let’s take note of few such mistakes that you need to keep clearly at the back of your mind while you trade the foreign exchange markets, but first, let’s remind ourselves of some of the basics that are integral to trading forex for beginners.
UNDERSTANDING CURRENCY PAIRS
When you look at a currency pair such as the EUR/USD, you need to understand the structure of the pair and how pairs are quoted so you’re sure whether you want to place a buy order, or a sell order. Let’s take a look at the GBP/USD pair as an example: Currently the pair is quoted around 1.30 (Rounded for ease), this means that the base currency (GBP) is worth 1.30 of the quote currency, sometimes referred to as the counter currency (USD), so if you believed that Sterling would rise against the Dollar, then you would execute a buy order on this pair, if you believed the reverse to be true, then you would execute a sell order instead.
PAYING ATTENTION TO THE NEWS
Something a lot of beginners seem to neglect is financial news. It is imperative when learning forex for beginners that you get into the habit of keeping yourself updated every day on what’s happening in the markets, and what’s going to happen in the future. For example, when central banks alter their interest rates, you can expect a movement in the market.
ABSENCE OF CLEAR DIRECTION
Undoubtedly, the forex markets are risky and unpredictable. But it does not mean that you should become casual in your approach to deal with that unpredictability. Rather, your consistent approach to the market could give you the real exposure that could help you to steer clear of the problems in the course of trading. Beginners randomly pick up a deal and make a profit. but later on, they distance themselves away from trading as they lack the courage and wisdom to deal with the unpredictability and uncertainty from the trade. For dealing with the volatility in the market, you need to be cautious and wise 24 hours a day.
First of all, keep a trading plan in place. Every loss in course of trading needs to teach a lesson, which is helpful in further trading. You could note the mistakes in a journal and refer to them as and when it is necessary.
By keeping notes about every day’s happenings, you could know about productive and unproductive areas in forex trading. You would learn about the factors that influence the results in trading both major currencies and minor currencies.
NEVER FORGET TO HAVE A STOP LOSS
In general, a STOP LOSS is an instruction that stops you from losing excess money in the market when you buy or sell currencies. It is a vital part of trading, and so it is a must in your day-to-day trading activities. Without its presence, your trading certainly remains prone to risk.
So the next idea to undertake in this forex for beginners guide is you need to set a clear idea of how much money you could really bear to lose in a particular day’s trading. You need to ensure that you don’t step over the limit once you set it. Many young investors allow their emotions to rule their decisions in trading, which is a blunder. You need to stay emotionally balanced as you push through every day’s trading activities. Register for a free session for our forex trading course for beginners to know how exactly stop losses can most effectively help you in minimising your losses!
SELL EARLY WHILE AVERAGING DOWN
As a beginner in trading, you need to take this fact for granted in your mind that selling is not only a number game but it is the very act of balancing your own thoughts and instincts. This becomes clear when it comes to averaging down. This mistake is noticeable in the trading of stocks and shares, but it really makes sense when you understand, in precise terms, how it affects the average beginner.
Averaging down is the practice of adding more funds to a trade, where you have already invested at a lower rate at the time of first purchase. You resort to this practice because you think it is best to invest when it is cheap. But you wait till its value goes up. This is indeed a trap as you wait for a long time for getting a return and miss all the opportunities in the meantime.
EXCESS OR NO APPROACH FOR DIVERSIFICATION
The beginners take too much risk by diversifying too much and trading at several fronts at a time. By this, they become vulnerable to market risks as they fail to know about the profitable positions and trades that actually work.
On the other hand, unwillingness for taking risks and diversification also results in a slow learning process and maturity in learning the intricacies of the trade. However, a balanced approach to trading with a bent of mind to learn the things results in fruitful and efficient trading. Which takes you from trading forex for beginners to more advanced trading.
Here at Platinum, we approach the market like professionals. Beginners too often try to make money quickly in the market thinking it will be a get rich quick scheme. All the traders from Platinum know this to be false and work with our clients progressively to help them reach their goals.
All the mentoring is completely 1-to-1 and provides individuals with an experience of interacting with a professional trader every week. Remember trading is a marathon and not a sprint, riskless to make more. That is the Platinum Motto.
This is an example of how our Methodology works in action with a trading opportunity. Everything is clear and set out in front of you.
HOW TO TRADE USD/JPY THROUGH THE TRADE WARS
As Donald Trump’s trade war escalates, opportunities arrive for savvy traders. Today Platinum’s CEO is offering a unique and lucrative opportunity.
Trump was elected, in part on a promise to put America’s interests first and crackdown on what he characterises as a world trade system rigged against the US. But until recently the president has acted like many of his predecessors – talking tough on the campaign trail but backtracking in the White House. Click here to view full fundamentals for this trade.
Perfect Technical Analysis
Technical Point of View on the US Dollar against the Japanese Yen (USD/JPY)
From the daily chart of this forex pair, we can see the head and shoulders pattern that previously formed. This pattern has formed due to the recent volatility on the dollar yen exchange rate which is due to trade wars and the US dollar reaction to sanctions being imposed on the EU, Canada, and Mexico. We are now looking for a continued move from the neckline support. The bottom for our prediction should be the 1.1850 level, it is showing major demand with great probability of moving higher from there.
Perfect Technical Analysis
Perfect logic means both Perfect Fundamentals + Perfect Technical indicate matching sentiment.
USD/JPY FOREX TRADING STRATEGY
Perfect risk Management – % risk of trade and stop loos = Perfect Risk management
Perfect risk Management – % risk of trade and stop loss = Perfect Risk management
Trade Entry: Long USD/JPY @ 108.50 with a 40 pip stop loss with a target of 110.80
Key Technical Levels on the USD/JPY
- 108.00 – Long-term Buying Level
- 107.50 – Long-term Buying Level
- 110.80 – Short-term Selling Level
- 111.30 – Long-term Selling Level
How to become a profitable Trader.
If you are a new trader and would like to learn how to trade, then sign up today to our 2-day free Foundation to Forex Trading Course. We have just introduced this as in the last month we have had a lot of inquiries on learning how to trade the financial markets. We can get you on the successful path of becoming a Financial Trader.
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The Platinum Formula:
Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade
THE PLATINUM WAY
At Platinum Trading Academy, United Kingdom, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time. We trade in an Institutional Way by letting the market come to us and being patient. Using Platinum’s Trading system you can take many Pips out of the market. We can ensure using this style of trading your trading will make a turnaround as you will become much more consistent.
If you want to trade like the professionals do, making consistently profitable returns from your trading, get in touch with us and we will demonstrate live exactly how we approach the markets.
Hopefully, you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Live from the Platinum Trading Floor.