Be Smarter and Wiser Today
Experience can be the most expensive teacher. These tips were designed to help you be a smarter and wiser Forex trader today, and will hopefully help save you from having to go through some of the expensive “tuition” that can result from a lack of trading experience.
1. Trading psychology matters.
Mark Douglas, author and trading psycho-analyst explains; “Successful trading is 80% psychological and 20% methodological.”
2. Accept that there are no guarantees and be flexible.
There is no such thing as a guarantee in Forex trading. That is why it is a legal requirement that on any Forex service website that there be a posted risk disclaimer.
Even if you find a method that works, it is important that you remember that even a method that works needs to be updated from time to time. There is no single surefire method to trading because there are so many types of market conditions. The Forex markets trend, reverse, break-out and consolidate. For each market condition, there are various rules and trading criteria. No single strategy to date that we know of has held up under all trading conditions.
3. Never Stop Learning
While it seems counter-intuitive, spending money on yourself is a long-term investment into future trading and what you spend money on in education can save you money, and then some, in losses.
4. Take a break
This is my favorite tip and I suggest you do this every day. Forex traders often have multiple computer screens and windows and are constantly bombarded with analysis and information. Don’t underestimate the value and the need to step away from your computer screen especially after a stressful trading session. Do something active if you can. Take a walk, Go to the gym. Get lunch. Do something to distract your mind from trading, and when you return you will be mentally refreshed and recharged to manage your open trades and possibly enter new positions.
If your stress level from trading is escalating, these these tips will help you manage your trading stress.
If you are taking a break, don’t forget this next tip which can save you from huge losses.
5. Never trade without a stop loss.
Although there is potential for profit and rewards, Forex trading is risky. Excessive leverage can ruin an otherwise profitable strategy. For this reason, investors should never trade Forex without a stop loss.
Stop loss is a concept in Forex trading which automatically closes your trade position in cases where your loss on a trade has reached the amount you have set.
Applying these tips should help enable you to be a wiser and more capable Forex trader.
Have you had any Forex advice or suggestions over the year that have proved invaluable to your Forex trading? Please take a moment to share using the comments feature below.