5 Tips for Beginner Forex Traders

There is no doubting the huge potential that Forex trading has, but it also carries considerable risk, especially for the beginner. Discipline, research, education, and more discipline, are some of the essential tools that you need when you start trading, but below are five tips to help ensure that you have a better chance of embarking on a successful trading career.

1. Start Small, Build Big

Ideally, you should start by paper trading foreign currencies. Use a demo account with a broker like Oanda, so that you can practice the use of stop losses and limit orders, which would prove difficult if you simply kept track of your investments on paper. When you do upgrade to real money, start with a small bank, and build your bank according to your profits, rather than by continuing to add to your bankroll.

2. Specialise Before Expanding

There are dozens of currency pairs that can be traded, and while this might sound like a lot, it is considerably fewer than the number of stocks, shares, and funds that exist on the stock market. Concentrate on one or two well-known pairs to begin with, and ensure you research additional currencies before you incorporate them into your daily trading.

3. Stick To The Plan

Have a plan that is based on your tolerance to risk, and then stick to it. Whether you trade the news or political stories, or whether you trade on pure analytical trends, do have a strategy, and do stick to it.

4. Learn From Failure As Well As Success

Every trading system makes a loss at some point, and no matter how well things have been going over the past few days or even weeks, you should be prepared for a string of losses at some point. Don’t be disheartened – analyse the figures, see what happened, and determine whether you can improve your future trading.

5. Learn As Much As Possible

Knowledge really is power, and initially, no matter how much you have read or what courses you have taken, you will only have limited knowledge of the Forex market. Your knowledge will expand over time, and the more you learn, the better equipped you will be to successfully trade. Learn as much as you can, broaden your horizons beyond your currency pair even if you don’t intend to trade any other currencies. Learn about Japanese Candlesticks, and other technical tools. Subscribe to blogs, news feeds, and always keep an eye on foreign exchange news.

Author: Richard Casteel

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Richard is the chief author of this blog. He worked as a financial advisor in money market form last 10 yrs. His financial sense in Share trading and any other trading is just outstanding. He just shares his knowledge and experience through this blog. You can contact him directly though CFD-Providers.com.

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