As we have mentioned before that forex trading is most certainly not easy for new beginners. In fact, it can even be tricky for even the most experienced traders amongst us. If you get it wrong in forex trading, then you risk making huge losses and this can lead to a failure trap for many inexperienced and undisciplined traders. On top of the tips provided in this blog post, we are delighted to present some more inside tips on forex trading that you can use to avoid disasters and maximise your potential to win!
1. Plan your goals
The term “Fail to prepare, prepare to fail” is so true when it comes to forex trading (or any type of trading). Having short- and long-term plans is very important and it is equally important that you properly define your risk tolerance carefully as well. Why? Because understanding your needs is crucial when it comes to forex trading. You need to be prepared for losses and you need to make sure you have some room for failure otherwise you will end up shocking yourself and destroying all the hard work which has been done. Once you know what you want from trading, you must write down and plan a time frame. Do a proper SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of your goals before you begin. Find out what are your strengths, your weaknesses, your opportunities that are open to you, and any threats that may be open to you. Having clear and concise goals will make it much easier for you to be emotionally prepared in case the risks go against a profitable outcome.
2. Start with short sums, and increase the size of your account slowly
Never get too greedy when you are starting out with trading in the first instance. The best way is to start trading with small sums, and low leverage. Gradually, as you start to gain confidence and momentum, then you can have a large account but don’t make the mistake of thinking that a large account will allow greater profits- it won’t. It is not exactly like playing the lottery where one win will give you a large sum of money – it takes time, patience and a lot of careful planning.
3. Don’t get too happy too quickly!
Trading can be fun, exciting and also give way to a whole host of emotions that you never imagined beforehand. Stay away from toxic emotions such as becoming greedier, panicking or getting worried. While these can be the natural ingredients of an exciting trading journey, the best traders are those who stay calm and smooth and don’t let their emotions carry on going. This is one of the key reasons why traders are strongly advised to begin with small amounts because it gives you more space and time to naturally grow your profits as well as your confidence. So, stay calm and carry on trading using a logical approach.
4. Take notes. Study your success and failure.
A successful trader keeps a note of all their trades and logs down their analytical approach to trading because that allows them to monitor price trends over a period or the formulation of trading strategies. This is one of the most importance forex trading tips that you will get from a good mentor.
5. Forex trading is about probabilities.
By now you should become aware that forex trading (as well as crypto trading) is all about risk analysis and probability. There is no set formula for the best results, but if you follow some of the best practice advice that we have provided here then you are at least set on the correct path to success. Statistics reveal more than what they hide so be very careful when you are analyzing the markets. One of the keys to success is how to position yourself in such a way that the losses are completely harmless and don’t bring you down much. Be smart and manage your risks in accordance with an understanding of probability.
6. Study and educate yourself about the markets
LeoPrime has a daily analysis blog provided by our in-house forex trading analyst. It is highly advised that you follow this daily analysis blog and understand any patterns and charts that are present. The more you study, the better you get at becoming a pro at forex trading. It goes without saying that a proper analysis is important, but only after a proper attitude to trading and risk-taking is attained.