Sharing experiences and knowledge is very important in any field. However, when it comes to trading, sharing has particular significance, because if a trader has a shaky plan, this plan may result in heavy financial losses. To avoid this, traders with brief trading experience are recommended to pay attention to tips that come from professionals of financial markets.
- Try to understand that no one, even the most experienced trader, is immune from financial losses when they trade on the Forex market. So, you have to accept this as a fact of life. The core principle of trading is that the profit you get must be higher than the above-mentioned losses.
- Elaborate a plan and stick to it when you trade. When drafting the plan, think about the amount of money you can afford to risk and the profit you’d like to get. Professional traders do not start trading until they realize their ultimate goal.
- Don’t be afraid of the Forex market. Traders with brief trading experience are in fear of uncertainties, which are an integral part of the currency market. However, these risks are a major piece of any trader’s work.
- Be responsible for trading decisions you make. You can accept help from more experienced traders if you want, but in the end, you are the only person making decisions that will affect your trading results.
- Greed may really do a lot of harm. When trading is successful, traders often forget about the plans they elaborated earlier and start wishing for more money. However, market trends may reverse at any moment, hence resulting in more significant losses than planned.
- Remember that news may have significant influence on financial markets. When significant news and important statistics are published, the market volatility may be higher or lower and prices of trading instruments may change faster than usual. That’s why if you plan to trade on news, take into account instability in price movements and nuances of execution of different order types during such periods.
- "Disable" your emotions. Unnecessary emotions won’t do any good to a trader, because they are often one of the major causes of financial losses. Follow the plan you drafted and don’t forget to place Stop orders.
Before you start trading
- You should take your time: traders with brief trading experience often open several orders simultaneously and then realize that they are not able to keep an eye on all of them. Decide on optimum number of trades you are able to properly manage and try not to exceed this limit.
- Don’t forget about Stop orders. The way prices move on the market is hardly predictable, that’s why you should place Stop orders to decrease your potential losses.
- Choose your own trading timeframe. Some traders prefer intraday trading, while others are more interested in long-term periods.
- Don’t be hot-headed – plan your trading operations in advance. Try to stick to the plan, keep your temper in check, and avoid making snap decisions.
- Monitor the market – prices may easily move away from the direction you planned, so you will have to reverse your decisions.
Remember that a recipe for success on financial markets means an elaborated plan of actions and no wild decisions. A wise choice of a proper trading account type is very important as well. Our Table of trading account types will help you to decide on the one better for you.