This really is not a self explanatory crap list that’s supposed to inspire. This is really a smart, unpleasant and honest list.
12 Essential Forex Tips
1. Know the Basics
Yes that really is an easy one but it needs to be said. A guy in my position gets got the joy of conversing with dozens of newcomer traders on an everyday basis. When there’s 1 thing I have heard it’s that a lot of beginners forego the simple training and jump into the war zone. This is ofcourse a mortal mistake, in their character, therefore if you’re a newcomer LEARN THE DAMN BASICS!
How would you know the fundamentals?
Check from the Forex education department.
2. You Won’t Get Rich Quick, Experience Makes You Rich
If you’re here to obtain rich quick you’re just a clueless tourist. Don’t be innocent. Trading is all around experience. As is true for almost any livelihood, the more you take action that the better you feel. I’m usually demand “Nick, how did you make ninety pips when I only made seventy pips on the similarly trade? ” It really is all around experience. I’ve already been trading for eight years therefore I am a successful trader. I see matters that newcomer ‘s don’t because I have the experience.
The journey to becoming a trader is a long one so be prepared to stick it out for one to three years before you’re consistently profitable. Forex is a long road but it is well worth the journey.
Always remember, Forex is a career not a obtain rich quick scheme.
3. Experts Are a Joke
Listening to expert opinions is great right? Of course it is!
The problem with financial marketplaces is that every newbie who’s had a good week thinks they are an expert. The other, more pathetic, type of expert is the 30-60 year old guy/girl, in a suit, who claims to be a professional trader yet begs you to purchase their book. These people are usually failed traders who make money teaching other traders how to fail. Self-proclaimed experts tend to:
- Regurgitate generic old information that just doesn’t work.
- Say that they ‘re rich regular traders yet make an effort to offer you books.
- Make outrageous claims as they switched $1k to $1mil per month or two any rubbish.
- Try to establish that they have been profitable traders by simply posting pics of all photo-shopped accounts announcements.
- Cleverly use maths to make themselves appear more lucrative than they truly are e.g. double-counting wins and only counting losses.
So many ‘trading experts’ really are a joke. Take what they say with a p1 of salt.
4. Can Your Own Analysis
Continuing from the last tip, blindly following others will make you blind. Your goal should be to become a successful trader, not a pigeon following others around for scraps of information.
As a trader you need to pick a method and learn to analyse the store. Being able to do your own analysis will bring you closer to being a pro trader. Doing your own analysis allows you to:
- Be self reliant.
- Actually learn to trade.
If you choose to blindly follow some self-proclaimed guru all you are is a pigeon. How will you make the money when the guru stops giving tips or the tips stop working? Will you even understand why they worked in the before all else place and why they no longer work?
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5. The Demo Myth
If I wanted to be a professional boxer then I would go out and purchase a boxing game for my PlayStation 3 and start my boxing training. Would that make any sense?? Well it makes just as a lot of sense as trading demos in the hopes of becoming a successful Forex trader.
Demo trading for 3 months does not work for 2 reasons:-
- Demos give new traders false confidence and cause them to learn bad habits.
- Demo account performance is often superior to a brokers live account performance. This includes execution speed, stop hunting, and several other factors.
The best solution is to use a demo to learn the basics and test out, or find, a trading method. When it comes to actually trading you should only trade a live account. These days you can open an account with pocket change ($10) so there are no reasons not to trade live.
Oh and if you cannot afford to lose $10 you should not be trading anyway…
6. Kill Losing Streaks Early
This is by far the most important decree I have ever put to action in my own trading. Had I not stringently stuck to this decree I truly believe I would not be a successful trader today.
If you lose 3 trades in a row STEP AWAY from your charts. Take a few days off trading and come back with a clear head. Losing streaks are very dangerous and falling into one can lead to very big losses.
I cannot stress this tip enough.
7. Following the Pack
Have you heard that 90% of new traders fail? Like most statistics that one is probably bull. However it is fair to say that the majority of newbie’s coming into this store fail.
I believe the secret is to break away from the pack and do your own thing. That doesn’t mean that you need to isolate your self by the trading area. It merely means you should depend on your own. Get enough knowledge/experience to become separate and not only a follower.
Think about it you logically:
- The huge majority of traders neglect.
- If I trace the bulk I turned into a part of this bulk.
- If I am part of this majority I am most likely to fail together with them.
Become independent DO NOT stay a follower.
8. Stick with Your Method
Every trading system has its own ups and downs. No trading platform, style or method is going to be 100 percent profitable, throughout the year. My method, as an instance, has normally an 80% success rate. A few phases of this season I shall triumph just 6 at 10 trades (60 percent ). Other phases from this entire year I triumph 100 percent of trades to get a calendar month or 2.
I understand each calendar year I have any undesirable phases in which the event I shed trades compared to usual. I don’t actually shed faith though. I place it out and continue on trading. The issue with the majority of newcomer ‘s is that they gives upon a system as a result of its before all else awful week.
Don’t abandon your method when times are tough.
9. Keep It Simple
This is an easy one. Keep it simple!
There is no comprehension to complicate trading. For example, my trading method is extremely simple yet extremely effective. I spend 2-5 hours per week trading and the rest of the week enjoying life.
Your method does not have to be incredibly complex to work. Keeping it simple will allows you to:
- Work a lot of more efficiently
- Work less
- Speed up your learning (KISS)
If you remember nothing else from this article, remember this…
Keep it simple!
10. Trade Only One Pair
The key to making that transition from newbie to pro is keeping your trading simple.
One of the easiest ways to keep trading simple is to trade only a single currency pair at a time. This is so damn obvious I am surprised more people do not do it. Trading one pair helps because it allows you to concentrate all your efforts on learning that pair, therefore allowing you to understand how it moves.
If you try and trade 5 pairs at the similarly time, learning to trade becomes a lot of harder. You will have to learn the unique characteristics of all those different pairs and each pair is unique. Each currency pair:
- Reacts differently to news.
- Moves at different rates, some fast some slow.
- Moves more rapidly at different times of the day.
- Has to be managed differently when holding an open position.
As a newbie, jumping into the deep end with multiple pairs adds a lot more stress and slows the learning process.
So start off with a single pair. Once you’re profitable you can add as many pairs as you think you can handle.
11. Trade Only One Time frame
As above, picking a single time frame keeps things simple.
Looking at a single time frame has several profits:
- Allows you to concentrate on learning one time frame, therefore removing a lot of the confusion that comes with learning multiple time frames.
- Gives you less charts to look at and allows you to concentrate more energy on analysing a single chart, therefore improving efficiency and the quality of your analysis.
- Stops you from overanalysing your pair. Looking at too many time frames can give you conflicting signals.
- It just makes your life easier.
Remember it’s all about keeping it simple. If you have a single timeframe and a single pair it means you’re looking at a single chart. As a newbie you do not want to juggle multiple charts. Stick with one chart, until you become consistently profitable.
12. Clean Charts
Most newbies pile as many indicators as possible onto a chart, when they before all else start trading. Indicators help with your trading (apparently) so the more the better, right? Wrong!
As traders gain more experience they start figuring out that less is more. The more indicators you have on your chart the more confusion you will have. Every extra indicator:-
- Adds to the clutter making your charts harder to read.
- Gives you more to think about therefore clouding your judgment.
- Increases the possibility of giving you conflicting signals.
- Looks pretty damn ugly…
Indicators are not essential. I personally trade with no indicators and have an 80% success rate. I am not saying you need to remove all indicators but limit it to a max of 2 at a time on your chart.
I trade with no indicators, simply a few support and resistance lines and candlestick patterns.