Top 10 Tips For New Traders
>>>Preserve your capitals
>>>>Always set a Stop Loss
>>>>>Have a trading plan or systems
>>>>>>Let your profit Run, Run and RUN
1. Implement a strategy and stick to it
Open a real account or a demo account to implement the strategy and tactics you have formulated.
Open fewer trades, focus on one or two currencies and understand the dynamics of each currency.
Benefit – You have time to track your trades, fix trading techniques that don’t work and improve as a trader gradually.
The real key to successful FX trading lies in capital preservation. You’ll always make money if you have the proper strategy, but you need money to make money.
Increase your profits gradually by managing risk adequately.
Reduce your stress level by lowering how much capital you put into every trade.
Don’t bet more than 5% of your equity on a single transaction.
Let profitable trades run as long as possible, but cut losses quickly and keep cool under pressure.
Benefit – You establish a sound strategy for long-term risk management and profitability.
3. Stop Loss
Setting a take Profit is important but not as critical as setting a STOP LOSS. You risk losing your entire capital if you fail to set an appropriate Stop Loss or none at all.
4. Always have Plan A and Plan B
Becoming a successful FX trader takes time, preparation and dedication.
Develop and implement a trading plan that is in sync with your trading strategy- or build a system. You can also buy proprietary software or a system developed by Brokers.
Stick to the plan(Remember: one or two initial losses don’t necessarily mean your plan isn’t going to be successful in the long run. Patience is key).
Benefit – A trading plan helps you stay focused, bring discipline into your trading and lays out the foundation for future profitability.
5. Let your profits run and run
Never cut your profits short. Many FX newbies can’t resist the sight of a winning trade for a long time, fearing that small pips they’ve accumulated might vanish when the market goes through temporary reversals.
Stick to your plan, and avoid making the hasty exits that reduce your returns in the long term.
Set a Trailing profit to manage your profits, gradually moving your Take Profit level-say by 10 or 15 pips – as the trade goes your way.
Benefit – Letting winning trades run is an effective way to increase your profit/loss ratio, which in turn boosts your return over time.
6. Don’t turn profitable trades into losing ones.
The FX market is a round-the-clock market, open Monday through Friday.
If your positions show a profit during the New York session, for example, they could reverse to a loss during the Tokyo or London session if market conditions affect the underlying currencies you’re trading.
Move your Stop Loss forward to your entry point to secure your investment, ensuring that you at least break even if the market goes against you.
Safeguard your profits and prevent your trade from slipping back into a loss: move your Stop Loss forward in the direction of the trend.
Benefit – Monitoring a profitable trade and setting a proper Stop Loss helps you avoid a loss. The key to successful FX trading is reducing your losses and managing risk.
7. Seek professional insight
Successful traders often spend many years honing their skills and you can benefit from that expertise by following one or two experts.
There a plenty of helpful trading educational materials, webinars, and live coaching.Learn before developing your trading plan.
Utilize real-time,research-based information you can use to make winning positions.
Benefit – By mirroring a professional trader’s positions, you can make their success your own. No need to make the often costly mistakes of a rookie;just copy someone who has already established himself or herself as a winner–and you’re on your way to trading success, too!
8. Plan your trades in advance.
Developing a trading plan not only helps you manage risk, but it also prevents you from jumping into any trade because the price is suddenly falling or rising.
Don’t fall for a trade just because you feel “good” about it.
Prioritize reason over emotion
Know your desired entry point, Stop Loss and Take Profit rates before you open a position.
Always wait for the right opportunity to arise-your account will thank you for it.
Benefit – Planning your trades in advance removes emotion from the trading equation, reducing pressure on you and the unintended losses that are often linked to compulsive trading.
9. Go with the Flow , Trade with the Trend
Always trade with the market’s momentum on your side. When a trend emerges, other traders are likely to jump in, therefore boosting the trend’s momentum and pushing your trades in the right direction.
10. Don’t waste time on a losing trade
Many novice traders get emotional with their open positions, especially the losing ones, begging the market to somehow reverse their losses so they could at least break even.
Don’t do that.
The FX market processes hundreds of billions of dollars each day and there’s always an opportunity to make money.