Top 5 exclusive Forex Trading Tips for Forex Traders
Many people who are new to trading approach the markets with a singular vision of making a fast fortune. The truth? Traders who begin their careers with grand aspirations of becoming the next George Soros often won’t make it past a week. Actually, becoming a successful Forex trader takes perseverance, practice and, above all else, determination. The worst thing an aspiring trader can do is to throw in the towel as soon as they experience their first losses. Rome wasn’t built in a day, after all.
People who start trading with the right attitude are much more likely to succeed. And, if you ever feel a little lost, it’s always a good idea to revisit the basics and remember where you came from. In this article, we’re taking a look at the top 5 forex trading tips to start earning more as a trader!
#1 Stay Rational
In trading, there’s a thin line between success and failure. Knowing how to control your emotions can often be the factor that tips a trader to either side of that line. Indeed, your mental state has a significant impact on the decisions you make, and not just for people who are new to trading! Keeping a calm approach is crucial in order to trade consistently.
The Forex Market can be highly volatile at times. If you let market news impact or sway your approach, it's easy to get stressed out. Even worse, you may let your emotions affect your trading decisions and potentially make choices that inhibit you from meeting your objectives.
#2 Find the best time to trade
One of the many advantages of the Forex market is that it is open for trading 24 hours a day, 5 days a week. Unlike the stock market, the Forex market operates according to the normal business hours spread across different time zones. This gives traders the freedom to trade at any time they choose! The trading week officially begins in Sydney, Australia. This is followed by Tokyo’s opening, then by the London or European Session and finally by the North-American trading session!
Market volumes and prices can go wild first thing in the morning, due to all the news releases that occurred since the last closing bell. The first 15 minutes of trading are considered to be prime time, when some of the biggest trades of the day usually take place. For a skilled trader, it may be easy to recognise these patterns. However, a less skilled trader could suffer serious losses.
#3 Master your craft and continue learning
Even once you think you have learned enough, to continue learning and seeking out those who know more than you is important in the world of trade. As a trader, it is critical to learn both through real-life experience as well as through practice. By repeating strategies and studying the charts, traders can develop self-belief and confidence in their trading abilities. Also, having personal goals and recording your activity in a trade journal each day will contribute to building your trading confidence.
#4 Never invest what you can't afford to lose
A good way to minimise your losses when trading is by practising risk management. Having a good plan in place will not only offer protection, but also confidence in your trading. This can include reducing your trade lot size, employing techniques such as hedging, reserving your trading for certain hours or days, and recognizing when to take losses. It’s also recommended to set up a budget and determine how much money you can afford to invest.
#5 Determine your own strategy
There are various tried-and-tested forex strategies available that traders can use including technical analysis or fundamental analysis. A good Forex trading strategy includes opportunities for traders to analyse the markets, while also confidently executing trades with effective risk management techniques in place.
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