I have started to invest in Forex some time ago. I joined a very good mastermind where we get daily signals, and also learn how to read the market and so on…
The truth about Forex is that it can be an intense and stressful undertaking that requires a strong control of your emotions. Forex is not a “get rich quickly” scheme. It takes patience to learn to trade the Forex market – it will also take you time before you master the basics. If you lack discipline or make decisions that are not carefully thought through you will quickly find yourself in a negative investment position. If you follow sound investment principles you will reap the benefits of one of the world’s most liquid and influential markets.
A 100% return on investment within a couple of days wouldn’t surprise anyone, and in fact 1000% wouldn’t surprise an experienced trader. Because of this, Forex has become one of the most sought after and talked about investment opportunities. As in any industry, Forex has its own nature and golden rules. Learn Forex, understand the keys to success, and make your investment decisions wisely.
Several rules are essential on forex trading. If you mater them, you have the chance for longer survival on market as a trader. Sometimes, it takes time to master them. Some of them are too complicated to be mastered at the first place. So what are the rules? Here they are:
1. To acknowledge your goals and needs
People trade the forex for a number of reasons. Some people take it as a hobby to make some extra income, whilst many want to invest into it as a full-time job. So, whatever your reason maybe, it’s always good to understand your objectives pretty early as the goals will help you dictate the way to trade. And once you’ve established your goals, you can then start devising the plan on how these goals are to be achieved.
2. Create a trading plan and adhere to it
It’s extremely important to devise your trading plan in the beginning so that you can adhere to it. Ensure that the plan isn’t driven emotionally or created based on the speculations. Rather, it should be supported by good research, sound logic and the appropriate market observations. In case of a doubt, before starting up with a trade, step back for a while and have a look at it clearly and objectively.
3. Learn as much as possible
Nailing the forex foundations and doing all the prep work can be very crucial to the trading success. Hence, before you begin trading, make yourself familiar with the way forex market operates and take the advantage of resources which are available online. Also read as broadly as possible on the forex related books, videos, blogs and go after the reputable sources only. To observe on how the forex market works may help you create an idea of the trade types which are best suited to you.
Invest in a good Forex trading education. As I said I am in a great Forex Mastermind where we learn all we need to know to be successful in this big game. If you want to know more, let me know (comment below with your contacts).
4. Choose a broker and a platform which are similar to the trading style
The various trading platforms are arranged according to the varying trading styles. Don’t rush into a process of getting a broker. Instead, review a number of trial demo trading and regulated brokers on different platforms in order to compare the offerings and its pros and cons. In our mastermind we trade via Capital Index and it really works well. Click on the banner below to open an account with them.
5. Practice with the forex demo account initially
Beginners should leverage the demo accounts to check the waters and to practice the trading in an environment that is risk free. Often with the demo accounts, a trader trades in the replica of a trading environment with the virtual money, with access to the real-time spreads and the execution speeds. But, don’t stick with the demo account for very long as this doesn’t teach any money management skills. Once you’re ready to get into the live trading with the real money, start with the little and trade only one or maybe two currency pairs in order to get the feel for things.
6. Keep a track of your trading activity
Track the daily trading activity of yours and the results, irrespective of what skill level you have. It is a great habit to adopt as it lets you monitor, evaluate and analyze the successes and failures. Also review the records regularly to know what’s working for you and what’s not. Remember that a little effort every day will amount to something which will be beneficial in a long term.
7. Have the stop losses in order
Trading is traditionally risky as each trade has a potential to be the losing way. And as a result of it, it’s necessary to mitigate the risk and to establish the safety net where it is possible. Remember to have the stop losses in order to protect the capital and to manage risks. The stop loss closes the trade automatically if it reaches the pre-determined point which is very far out from your comfort loss.
Also use the “take profits” option in the system. Sometimes it’s just good to take the profit when you hit your daily goals… and don’t wait and hope that it will be more and more… it could also go down again… So take your profits and be happy about it.
8. Avoid overconfidence and be patient
If you’re going to pursue the forex trading with hopes that you are going to win big and become rich in a fortnight, then it’s time to reconsider your decision. The forex trading requires a lot of patience, high level of persistence and discipline. The successful trading will take time and it must be considered as the long-term strategy. And if you’ve seen a couple of consecutive winning trades, then that’s great, but don’t be overly confident.
Trading is full of emotions, so you must have your trading strategy and follow it strictly. It’s a lot about mindset.
9. Observe the market
Always keep a finger on pulse and observe the markets. Significant events, world politics, finance and economic news and everything will affect your trade. So the more updated you are with the market, the more prepared and organized you will be. Always note down trends, patterns and observations on the weekend so you can plan the upcoming trade before a week. Remember that if you fail to plan, then you have planned to fail.
10. Reevaluate the trading plan constantly and know exactly when to stop the trading
Nobody likes to think about the losses, but they do happen. An unsuccessful or ineffective trading plan does not mean the end, but that is a problem which needs to be addressed. If you are experiencing a loss, stay calm and reevaluate your strategy.
Figure out what contributed to it and re-address or adjust your risk management. However, don’t let the emotions get in your way and stay focused on the better and bigger picture.