Today I wanted to look at some forex trading basics that are good to go over not only if you’re a beginner, but also if you’ve been trading fx for a long time now. At the end of the day, these 4 things have been responsible for a huge amount of my profits, and have also prevented me from losing money many time during my trading career.
1) Don’t be scared!
One of the keys to being a successful forex trading is to learn to not be scared of losing money. If you’re scared to lose, then you will exit certain trades too early and completely pass over other profitable opportunities.
You need to be able to deal with losses and not panic when a trade goes the wrong way at the start. I see many beginner traders enter a trade and then take it off too early simply because they had lost a little bit at the start and became nervous. This is one of the most important forex trading basics that you need to learn early on.
2) Don’t force a trade
This might sound obvious, but it can be hard to follow when you’re trading. Many people want to have a trade on which makes them put on a trade that they wouldn’t otherwise make. This can be a quick way to lose a lot of money!
You should only be making trades that you have a strong reason for putting on. Sometimes having no trade is a position in itself – it says you are waiting on the sidelines for a profitable opportunity to arise.
I still get the urge to have a trade on, so this is one of the benefits I find of using a forex robot (a program that analyzes markets and gives profitable trade recommendations). I often will have a trade on because of a signal sent by one of the robots I use which helps to make me feel like I’m more involved.
Of these forex trading basics, this is the one that challenges me the most. I love the feeling of having a trade on, but I also need to recognize that it’s not worth putting something on unless I’m confident in it.
3) Stick with what works
If you find a way to make money, then keep doing it!
This sounds so obvious, but you have no idea how many traders I’ve seen find a “winning” system only to lose their profits by hunting for a new one.
I always try to learn something new and will experiment with different things, but when I have a system that works I will make sure the majority of my money is put towards it. I will still experiment with different systems using real money, but I won’t commit much of my bankroll until I’m confident that it works.
These forex trading basics are at the heart of what has made me a successful fx trader over the years. They are so important for anyone that wants to make money trading currencies.