If you are starting trading currencies, we had put together some valuable tips your experienced trading peers wished they knew when they were beginners on the Forex market.
What should you know before starting trading Forex?
1. Spend as much time as possible learning
The main problem for a beginner is the lack of knowledge. What to do is start reading the books about Forex trading and taking training courses with professionals. But remember that you must be careful when choosing a mentor. After choosing your Forex broker, the best practice is to dedicate some time to learning from its educational material such as tutorials, e-books, or even several months courses.
2. Don’t rush to trade for real money
The best thing you can do in the first month of trading is not to make real money deposits. Why? The chances are 99.9% that you will lose them. Along with investing in a quality course, trade on a demo account just to get the feeling of t
he trading experience.
3. Don’t lose your mind at the first successes
Let’s say you find a profitable trading idea, learn from the pros, and stop losing money. At this point, there is a very insidious psychological trap that can destroy you as a trader. It resides in the “star” disease. The traders begin to think that they have conquered the market and can earn millions. As a result, the risks increase, and you make a profit just to recoup the loss, etc.
Accordingly, it is essential not to lose your mind, but, unfortunately, this skill only comes with experience. Lucky beginners will fall into this trap 90% of the time.
4. Keep a log of transactions and errors
The best way to track your own progress is to use a journal. What should you include in it?
First and foremost, the mistakes you made – with their help, you will be able not to get up several times on the same rake. Screenshot the trades and include the trading chart – so you’ll understand when you’re lucky and when the position was opened correctly.
Besides, it is helpful to use trade trackers to keep an eye on your trading statistics. An efficient function is to display the losses per hour. With its help, you can identify the worst time to trade based on your strategy and optimize it.
5. Don’t quit your job for trading if you have no other source of income
Quitting your unloved job is what most newbies dream about. Sadly, this is one of the fatal mistakes anyone can make. What is happening? A person leaves work and begins to rely on the market – the appearance of hope is the first psychological trap.
The trader expects to receive a salary from transactions each month, but suddenly a series of losses occur, and the next 30 days are closed at zero at best. The second trap, even if you have a money reserve outside the market, it starts to run out quickly – anxiety grows. With a year close to minus or zero on your account, you are doomed to despair.