Getting the hang of Forex trading is a complicated and challenging process, no matter how much trading experience you’ve got behind your belt. And this is especially true for beginners.
Before you dive in head-first, we’ve compiled our list of the top 5 tips that will help you make better trades and find success in your Forex trading endeavors this year.
Define Your Trading Goals
As they say – the journey of a thousand miles starts with a single step. The best first step to take when trying to get into Forex trading is to pen our a clear idea of what your goals are. This is going to help you line up the best approach to your trades and plan out exactly what you’ll need to do to hit your goals. In short – it gives a sense of structure and direction to your trading and allows you to learn and improve deliberately.
For example, if you know that leaving trades hanging overnight will make you lose sleep, you may want to jump ship and explore day trading as an alternative approach. On the other hand, if you find day trading to be too cumbersome and you want to play the long-bet, then swing trading or going long with your positions may be the best option for you.
Pick Out The Right Broker
Before you make any trades, settling on the right broker for you is one of the most important bits to planning out a successful trading strategy. The broker you opt to trade with should be reputable and should give you a clear indication of how they make the market.
You should also keep an eye out for whether or not the broker’s platform supports the sort of analysis that you prefer (such as Fibonacci lines, MACD and Bollinger bands).
Don’t Trade With Your Emotions
Although we don’t like making the gambling analogy when talking about trading and Forex trading in particular – it fits the bill very well in this case. Just like being tilted when playing poker, making trading decisions with your emotions as a catalyst is a perfect recipe for disaster.
Forex trading favors the traders who manage to remain purely objective and analytical rather than those that swing with their mood.
Trade In A Consistent Manner
Coupled with the last point about emotion-trading, you shouldn’t be making trades wantonly, switching your strategy with each and every new trade.
We strongly recommend that before you open the year, you should analyze the past trades you made and incorporate the key takeaways into a solid and comprehensive trading strategy for the year, quarter, month, or weeks ahead. And once you’ve got the strategy all mapped out, you should stick to it no matter what.
Whether you go with fundamental analysis, pull economic data to support your decisions, or rely on a mixture of technical analysis with other indicators – you should practice consistency for the best results and the fastest learning progress when it comes to trading Forex.
Manage Your Risk Well
Before you jump into trading, whether you’re a new trader or a seasoned veteran, you should assess your risk tolerance and establish how exactly you plan to manage risk.
Your tolerance could depend on a number of factors such as your age, the amount of trading experience you have, the capital you’re willing to see go belly-up, and many other factors. Ultimately, it all centers around making sure that you remain in control of the situation at hand. If you invest with your personal risk tolerance in mind, you’ll be able to manage that risk and execute your trades with confidence. This leads to better decision making and ultimately better trading performance down the line.
Whether you’re just starting out on your first few Forex trades or are getting set up for the year ahead – it’s important to keep the fundamentals in mind.
From picking out the right broker to creating a sound trading plan and executing your trades with consistency in mind – we’ve outlined our top 5 tips for Forex trading in 2020.
We hope that our tips help you make the right moves to up your trading game and make 2020 a fantastic year for you and your portfolio. Best of luck!