Forex trading tips for beginners
Even beginners want to earn from forex trading, Forex trading tips for beginners who want to earn the following will be very useful for beginners.
The potential to gain from forex trading is very open to anyone who has an interest in this industry. Especially since there is a pandemic where many countries advise people to stay at home.
Forex trading is a business that can be done from home. In another hand, you can work from home.
This is interesting because only by using a computer or gadget can a person gain from trading this foreign currency.
But on the other side, it is indeed not easy. Many beginners fail and must be forced to lose their money at the beginning of trading. And that is a bitter pill that they must swallow.
Here we have summarized tips that are useful for you beginners who want to earn from forex trading.
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Learn forex basics
Beginners usually still need basic learning to understand the structure of the forex market, this at least gives you insight into how forex works.
Also in this basic lesson, forex trading for beginners also learns about chart types, line charts, bar charts, candlestick charts and so on.
Understanding the concept of how to read prices and their behaviour will help beginners analyze the market in a technical way.
This is the first step for beginners to start joining the forex industry.
Many sources of information that you can learn that you find through search engines, or our recommendations, you can learn forex academy here.
Do not ever think you will get rich quick from forex
It is true that the potential of the forex industry provides unlimited potential gain, this is provided that you really have mastered how to trade correctly and profitably.
Often the beginner’s mistake when joining forex is to think it’s easy, only buy when prices go up and sell when prices go down.
But the fact is that many beginners fail early in their careers and just give up so don’t instill the mindset that you will get rich quick from forex trading.
Price movements are very dynamic, easy to change and this might drain your mind and your emotions when you trade.
When you are reckless and undisciplined, it is very likely that one trade will wipe out all your money. Better learns a forex trading tutorial to start.
Take advantage of demo accounts to learn
You might not care much about using a demo account, because you only think this only uses virtual money, not real money. But demo accounts are very important for beginners to learn trading without risk.
Price movements in the demo and real account accounts are the same if there is a difference that may be only a few tick prices.
You should practice your skills on a demo account, how to apply risk management, how to implement a trading system, and all that.
One important thing is that through a demo account you must find your own trading system. And make sure while using the trading system, the results you get have a good portfolio growth chart.
It doesn’t matter, you spend a year or two just to practice skills through a demo account.
The good news is that if you feel you are eligible to take part in a demo account competition you can try it if you win it will get a fairly large prize.
Build your own trading system
Maybe when you start learning how to do market analysis, you will find a variety of ways traders do that.
One trader uses Bollinger band and he says success, another uses stochastic and he says success, another uses Ichimoku Kinko Hyo and he says success.
If you apply it all in your trade, guaranteed to be confused because you are not yourself.
Focus on yourself, you can learn all trading systems, but you have to build your own trading system. First select simple forex trading strategies to learn.
How, is to look for and find a system that makes you comfortable during your trade, and does not make your emotions often come. For this purpose, you may use a demo account to train and find the system.
Record the number of times you open a position and also record the number of times the results of loss and profit from all of these positions.
Make sure that the trading system you are building has a higher probability of victory than loss and low drawdown.
Choose a Reliable Forex Broker
If you already finding the best forex strategy for consistent profits. Choosing a broker is a very important part for traders because in the forex industry this is a very large market share, so some elements try to use forex for fraud.
Of course, you will be very sorry when in trading you managed to increase your money, and when it was time to withdraw money, it turns out your broker does not pay.
Or your broker makes an excuse that aims to refuse your withdrawal, whether your account is blocked, whether your broker is cheating, and so on.
One way to avoid fraudulent brokers is to look for traders’ reviews or visit forums such as Forexpeacearmy where there are several lists of fraudulent brokers, you can draw conclusions with the broker you choose.
If you don’t find the broker list you’re looking for, you should stay away from that broker because you don’t have a reputation.
Adjust your account type and total capital
Maybe you will start trading forex with low funds, and this is a good step, starting with low capital and increasing the gain to be large.
In this case, you have to adjust your account type, where low capital will be more suitable to use a mini account. Because if you choose a standard account then it requires a larger margin when you will open a position.
And that is very important for high-risk investments such as forex just spent money that is afforded to lose.
In addition, you should also consider choosing leverage, maybe high leverage gives big profits, but the risk is also very high, so choose low leverage to avoid overtrading and greed.
Focus on one pair
Prioritize focusing on one pair in trading, this will make it easier for you to manage risk in your trading plan.
Because you are still a beginner, you may not yet understand much about the correlation between pairs, so by focusing on one trade pair, with the time, you will be able to learn about other pairs.
By only trading one pair, it will be easier to evaluate, so that in the future it will make you more careful in deciding on one order, to minimize mistake in the entry point.
Keep using stop losses
One thing you need to understand is that market price movements are difficult to predict, your trading system will not always work in all market conditions.
When a mistake is beyond your expectations, stop loss will stop your loss for a while.
Stop loss is managing the amount of risk in one trade, if you take a 5% risk it will have a chance greater than 10%.
By using stop loss, it will train you to fight and learn to determine the best entry, so that by taking a minimum risk but having high profitability.
Even though you may have a trading system with 80% accuracy, without a stop loss at a time when it is definitely bad, one trade will eliminate all the gains you have previously obtained.
Do what you know
One time maybe you feel there are doubts about the analysis or trading signals that you find.
If you don’t really understand these conditions, it would be better not to force them to trade.
To minimize losses, just do what you know.
For example, you use a trading system in which two indicators are used, say moving averages with stochastic.
If the moving average is alert to buy because the trend is up, but the stochastic has shown an overbought area, then this condition doubts you, whether to follow the moving average or stochastic alert.
If both do not give the same signal, it is better to refrain from opening a position, even though you may be right after this, this is a doubtful condition.
Don’t over trading, add to loss positions
Maybe beginners will experience where one trading position is in a floating loss condition, and there is a desire to open a new position because you see a new signal.
That will only lure you into over trading, remember one problem for traders is the spread cost, after opening a position you will see a floating loss because the cost of the spread is profit for the broker.
Traders will never know for certain where prices will move afterward, complete one trading plan before opening another plan.
Control your emotions
It is true that emotions are an innate human trait, but you have to control them, adjust them to your conditions and emotions, don’t get carried away in high emotions that cause your decisions to be bad decisions.
Remember that profits and losses are a part of trading, when profits don’t get carried away in euphoria, and when losses don’t carry too much fear or anger.
Control your emotions and keep going according to the rules of the trading system and trading plan, this is one way to make trading more quality.
Be consistent and discipline with trading strategies
This is closely related to your emotional control, maybe you have found a flaw in your trading system.
But do not suddenly to replace with another trading system, learn the discipline of applying it.
If you have recorded good results on your trading system in a demo account.
You will be able to conduct an evaluation easier than if you immediately change the trading system.
Don’t rely on robots or other software
The forex industry is a large industry, in which there are many smart people utilizing the stupidity of others.
Maybe you’ve found a robot ad that can get amazing gain, don’t just believe it, and buy it if you don’t want to be disappointed.
If you are forced to choose to use a robot, cross-check deeper about the robot’s performance, if possible you ask for an investor password to directly monitor the robot performance.
But that is not for traders, but investors, if you really want to become a trader, rely on your own abilities.
Make a simple and easy way to trade
Forex trading is not rocket science, which has to do something complicated in its execution.
But forex is also not an exact science, where traders can indeed make a fixed target plan, but the results will not always be achieved.
A complicated trading system, for beginners it will be very confusing because the chart display is chaotic.
Simplify the way you do market analysis, don’t use lots of indicators that only bother you.
Forex trading is about probability
When you start learning how to use indicators, say stochastic then you can easily mark oversold and overbought zones by looking at the stochastic line at the level of 20 or 80.
Remember the signal from the stochastic indicator is about probability if the indicator line shows that level, it is only a signal with a good probability, but prices do not always move as expected.
So even if you get the price at a high probability, still be disciplined with a stop loss.
Have high patience
Remember that forex is not an easy way to get rich quick, learn your mistakes, and improve how you trade to become better.
This clearly requires a lot of patience, without it the trader will immediately give up and leave forex due to a failure.
You can learn from the inventor of the electric bulb, where he repeatedly fails before finally finding the electric bulb that is useful for many people.
So don’t give up if you will.
Applying money management
Money management is about minimizing risk and increasing profits, you must learn to apply money management in trading.
When you have made a profit at the beginning of a trade, then protect that profit, start by re-applying the trading system in a disciplined manner, by finding a high market probability.
You must remember that every tick of price moves there is a risk already there, so do not rush to open another position after one position makes a profit.
Learn the market, anything that can cause prices to move
In advanced learning, you have to know what factors affect the value of the country’s currency, fundamentals, and technicalities that can lead to price action.
Forex knowledge is not only about when to buy and when to sell in a pair.
But more than that a trader can expand his horizons about the fundamental conditions of the country, and learn how they affect the value of currencies.
We may have heard that high inflation can decrease the value of a currency, this is only a small part of the fundamental news and its effect on the currency,
Furthermore, there is much other news that can affect the value of a country’s currency.
Never give up
Forex provides unlimited opportunities to gain gains, but if a failure makes you give up, that opportunity will disappear along with your despair.
A child who learns to walk, he will fall several times, but he continues to learn until finally able to run, if you surrender, you have been defeated by the child.
Are you ready to trade?