5 Things You Need to Check Before Trading Forex

Forex has been around us for a long period. Long ago, people traded currencies for food, to buy animals, and some bought mineral resources. With the creation of the modern currency (coins and paper money), different countries traded a currency for the other. Initially, currencies were widely traded by major financial organizations (Banks and wealthy organizations and individuals) over the world. The birth of the retail market in the mid-1970s enable non-commercial players in Forex trading. However, the most significant transformation in the industry came in 1996 when FX trading went online.
Now, the Forex child grew and became a real giant. More than $ 4.5 trillion is invested daily in the Foreign Exchange market, where close to $ 1 trillion belongs to the activity of traders which are you and me. These numbers reinforce the reputation of Forex, and it clearly shows the possibility of people making a fortune while trading in Forex. However, with the benefits also come the dangers. It’s not all the hypes and make-beliefs that you come across are real.
In this article, I’ll walk you through the basics – five steps to get you thinking in the right direction. It would also help you to reduce your losses and start winning

1. Don’t Be Fooled

A trade made a million with just some cents! Ha! Watch out for this misleading testimonies you read online. After all, that’s what most brokers want you to believe. Whenever your mind wants to hang on to such misleading facts, relax and say “it’s a true lie!” Remember that Foreign Exchange trading is not gambling. As a matter of fact, it’s a business you must treat with utmost respect and carefulness.
The truth is that FX trading can win you a lot of profit if you invest wisely. But don’t believe it would all come quickly and easily. Success in currency exchange comes only to those that work and strive for it.

2. Left Hungry

I do not mean that you should trade Forex after every delicious meal. No. Before you invest any penny in Forex, ask yourself “I’m I ready to lose this money?” Do not leave yourself, or worst still, your family hungry with your carelessness. Do ensure you always trade with spare money. I’ve to tell you the truth without mincing words, over 80% of new Forex traders “lose it all” within a year. Even if you end up in the 80%, make sure the money you’re losing is from your reserved income that won’t affect you and your family’s wellbeing.

3. Read, Listen & Learn

Forex is no way near gambling. It’s not a lottery where you’ll commit a lot of fund with the expectation of winning big. You do not jump into a volatile and risky business as the Forex market without knowing “who,” “how,” “what” and “why.” Your comprehensive research on the investment should include all aspects of the market: Forex tips, news, strategies, where it goes, etc. You need to study a lot of histories, happenings around the country of the currency you chose. Also, read and learn from experts, follow trusted FX forums, listen and watch videos of how some gurus have been trading forex. You also need to learn how to read charts, understand Foreign Exchange news, and (most importantly) learn how to forge your effective strategy.

4. Use Many Baskets For Your Forex Eggs

The road to success in Forex is not a smooth one. Do not put all your hopes and expectations on a single trade – Use a certain percentage of your capital for different investment. Although these figures are subject to debate, but that’s the best advice I can give you, whether you’re a beginner or you’re well established in the trade. Just try to picture you hitting a loss, and see where your account stands after the trade. A loss is a loss. Don’t try chasing after a loss with a poor strategy. Rather, sit back, relax, get some break, and come back to see where you’ve missed it.

5. Do not let YOUR SUCCESS get into your head

If you hit a series of profit, don’t let it get into your head; don’t get carried away with it. I didn’t say you shouldn’t celebrate your win (don’t get me wrong) but try to control your emotion and ego here. Another common occurrence for winning traders is that they often want to dump their strategy for experiments. They say, “yes, I’m now savvy at this; I need no guide.” No, don’t do this. Rather, let your success propel you to more training and learning.

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