Most Traders are raring to go live once they have made some money on their demo forex trading accounts. The reason is that it gives a feeling of euphoria to beat a 5.7 trillion-dollar market. All of a sudden, they ignore essential trading tips which are used daily by professional traders. There is a lot of free advice in the open markets and a lot of daily trading tips which retail traders can pick up on, but the question is which trading tips should you listen to and which ones should you not?
We took an opportunity to speak to steven ardent, who is our head trader here at platinum forex trading academy and he has explained in brief some major forex trading tips that he believes are essential to trading the forex markets.
This was the question we asked, “Steven, Can you give us some important trading tips for newbies”?
He replied with the following:
The first lesson on forex trading for newbies is to understand proper money management, and then you can jump into forex trading strategies.
Forex Trading can be a minefield if you have studied it in the wrong way.
There are so many forex trading tips and money management tips out there that by the time a new forex trader has to implement his or her strategy they almost forget that no risk management is equal to pure looses and wins for the forex broker.
New forex traders are all aware of the 1% risk, yet they still manage to blow their forex trading accounts and due to the fear of losing and greed kicking in when they are winning.
Forex Trading should be emotionless on a good day you should know when to stop trading, on a bad day stop looking for new free forex trading tips or signals as there is no holy grail in trading.
On a non-trading day where there is no volatility, stay away from the markets and stop trying to find opportunities that do not exist.
Keep trading simply remember complexity loses you money and simplicity makes you money.
Below or some important trading tips that have been given to you from a veteran forex trader and we hope these help you no matter what level of forex trader you are.
Today we are going to discuss the top forex trading tips that you can implement to become successful in the market.
10 BEST FOREX TRADING TIPS
- Calculating Your Risk Before Entering the Trade
This is of vital importance to ensure you aren’t going to blow your account. Ensure your overall risk on each trade is no higher than 1 – 2% of your total trading capital. This way even if you find yourself down on a trade, the risk is limited and managed correctly.
- Never Chase the Markets
This is what we call being too aggressive with your trades, its often the largest mistake traders make when starting out in trading forex. If you take too many trades or are trading with too much risk this will hinder your trading performance. Adjust your position size if you are planning on taking more trades to ensure risk is the same.
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- Have Realistic Expectations
Another big failure in traders is expecting themselves to make huge profits straight away, this, of course, is not realistic and will lead you to be too aggressive in your trading. Set out realistic goals to achieve month by month, this way you won’t think about daily gains or losses too much.
- Don’t Hold Trades Too Long in a Loss
Always cut your losses to minimise risk, it’s essential to exit quickly if you feel a trade is running away from you or your reasoning wasn’t correct before you made the trade. You can not control the market, if the trade is bad, cut the loss.
- Expect the Worst
Remember something very vital, your past performance doesn’t represent future results. What you did yesterday or last month doesn’t mean you will do it again tomorrow or next month. Be prepared for making losses here and there. Also, be prepared for shock moves in the market where currency pairs can drop or rise very quickly on fundamentals. Having your risk mapped out before you place the trade will help prepare you.
- Have Your Targets Planned Before You Enter
Always ensure you have a target in mind before entering into the setup, otherwise, you will be lost while in the trade with no direction of when to exit. Having targets solidifies discipline in trading.
- Always Use Stop Losses
Ensure you are always using stop losses in every position you take, this is both sensible and logical to do for any trader. It will shield you from making huge losses or being surprised by a shock move in the market. Stop losses can vary on trades depending on the strategy, but for Platinum Trading Academy, we use stops anywhere from 20 pips to 40 pips on a trade.
Stop losses are vital to survive in forex trading, remember longevity in trading is more important than anything else. You can’t expect to make long term profits if you can’t survive, stop losses also mean you don’t need to monitor the market all the time. They will give you the confidence to step away from the screen knowing if anything goes wrong you have something to cut your loss.
- Never Trade With Emotions
This is easier said than done of course. But trading after you have just suffered a bad loss is not a good idea. You will be trying to chase that money back by risking too much or over trading. This will lead to further losses and greater anger in the trade. A good tip for this is to take a break from the screen for a while and return with a fresh point of view.
Stay on top of your position sizes and don’t alter them just because you made a loss the trade beforehand.
- Understand Leverage
Leverage is something many clients fail to understand when it comes to forex trading. Leverage essentially enables you to trade your capital at bigger position sizes to produce greater profits. I.E if you had a $1,000 trading account with a 1:200 leverage you can place a trade up to $200,000. Remember the notional value of 1 lot is $100,000. So you would effectively be able to trade a position size of $20 per pip.
But higher leverage doesn’t mean you will gain more profits, it also means you can lose more too. Be cautions and ensure you are trading within your limits to best survive in the market.
- Longevity is Key
Always set out a longer term 3-5 year plan of where you want to be, thinking too short term will ruin you and end up blowing your account out. Thinking long term will get all the negative thoughts out of your mind and enable you to focus day to day. Do not stray from your trading plan, stay true to it throughout the process.
Watch this video: A trading tip to limit your risk (05mins 01secs)
Conclusion
Follow the forex trading tips provided above to exercise effective money management, if you follow these you will be on your way to becoming successful. We would recommend practising all these tips on a trading demo account first and foremost.
Now that you have read through the vital forex trading tips that will enhance your trading, I can reveal the secret to forex trading is to stop looking for shortcuts for trading in the forex markets. There are a lot of forex signal services, and Self-made Trading Guru’s out there be aware. As a longer term, you can lose money, confidence, and time. Merely following forex trading tips cannot lead to becoming a successful forex trader as you need to have a versatile strategy that will adapt to different market conditions and seasons.
Learn to trade from professionals that have traded in the currency markets; successful forex trader stories are few and far, so be selective in your journey to becoming a forex trader. There is no holy grail or secret trading strategy in the world.
Forex Trading requires dedication, patience, and discipline. At Platinum Trading Academy these are the principles that we embed into our students and clients. We hold your hand through your Financial Trading journey no matter what level of experience, every successful athlete, entrepreneur, etc. has had an outstanding mentor and this is precisely what You shall get from our platinum mentors should you join our forex trading courses.
In short, managing your capital is one of the most important things you can do as a trader. Use the tips above to ensure you keep your trading account healthy and keep them in mind as you go through your trading day. Whether you’re a beginner, a novice, or an experienced trader, each one of these tips still applies.
The most important thing you can do as a retail trader is get yourself a proper trading education. Find a teacher or mentor with a proven track record with years of experience in the markets. With the right guidance, you can make trading go from a hobby to your primary source of income, and free yourself from the 9-5 working for other people’s dreams.
ATTEND OUR AUGUST 2020 TRADING TIPS CONSULTATION
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.
Download our free ebook to read about the various Trading Patterns that work in the Financial Market. Watch Trades of the Week Videos in our video gallery. Subscribe to Platinum’s Forex Newsletter.
Hopefully, you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Nisha Patel
Live from the Platinum Trading Floor.