Forex Trading Tips for Beginners

TRADING TIPS -FOREX BEGINNERS

 

Forex trading is not a simple task, it requires multiple skills but also the choice of a reliable Forex broker. It requires also the implementation of a portfolio strategy, a lot of practice and discipline when managing your trades. Here are some tips when trading Forex.
 
 
 
 

1. Define your needs and build your trading profile

First of all you have to decide what type of trader you are. Are you going to trade many pairs of focusing to just one pair? Are you interesting in imposing a scalping strategy or not? Are you willing to devote many hours for trading in a daily basis? Do you plan to use a Forex robot or receive trading signals from Expert Advisors?
 

2. Define your overall portfolio strategy -The Trading Triangle

Designing and implementing with discipline a portfolio strategy is very crucial whatever type of trader you are and whatever market you like trading. We are not referring to a simple trading strategy like using indicators (MACD, etc) but having a portfolio strategy that will protect your funds in the long term. This strategy should answer the following questions:
a) What is the portion of your available capital that you are willing to risk?
b) How much risk are you willing to accept (stop loss)?
c) What is the annual portfolio performance that you are targeting?
d) Will you need your trading capital back in the next few months?
 
If you will need your funds back in a couple of months, its better not to trade at all. In general, if you are targeting a high performance you must be willing to accept a lot of risk too. Check the triangle above, if you push a side of this triangle, the other two sides are widening.

This is the Trading Triangle..
 
Therefore:
i) If you increase the Targeted Performance, then you should expect more risk or/and use a larger time frame.
ii) If you reduce Accepted Level of Risk, you should expect a lower performance or/end use a larger time frame.
iii) If you reduce Time Frame you should expect a poor performance or/end accept higher levels of trading risk.
 
 

3. Choose the right Forex Broker

Using our Forex Brokers reviews and ratings you have the chance of making the right brokerage choice. »Check how our Ratings work.. In general what makes a Forex Broker to suit you best includes:
a) Cost of trading which contain Spreads, Commissions, Deposit and Withdrawal Fees plus rarely Maintenance Fees.
b) Reliability and Regulation of the Forex Broker which is transformed in the Safety of Your Funds.
c) Trading Options like available platforms, scalping allowance, leverage ratio etc.
d) Forex Rebates and Bonuses (sometimes can make the difference)
 
 
 
 

4. Use a Demo Account before you commence trading hard

Using a demo account will make you familiar with a trading platform while it will help you ‘test’ your Forex broker in terms of delays and trading stability. A demo account will also help you measure your trading performance before trade for real money.
 
 

5. Focus in a couple of Forex Pairs not in many

If you are a beginner It is much better to concentrate on a couple of FX currencies than try to cover the whole Forex Market. Focusing will provide you with better information and increase your potential of produce trading profits in the long-term.
 
 

6. Don’t trade hard when you are into UnknownTerritory

Start trading very soft before you decide to dive into an unknown trading territory, especially if you are not familiar with Forex trading.
 
 

7) Use always a Stop Loss Strategy

The absence of a stop-loss strategy is the most common mistake of a beginner. When you trade a market using leverage without a stop-loss is like driving a highway without having brakes.
 
 

8) Take your Profits or Adjust Forward your Stop-Loss

When a trade is proved very profitable you don’t have to be greed, either take your profits or adjust your stop loss forward in a way that a final profit will be guaranteed.
 

 
 
 
 
Trading Tips for Forex Beginners
Online Forex (2012-2013)

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