10 Tips For Successful Forex Trading

By Author: Sam Sander
Total Articles: 60
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Forex trading is simply the buying and selling of different currencies for the purposes of making a profit. It sounds easy enough - buy low and sell high, and make a tidy profit along the way.

So why then do 90% of traders lose money? Because they don't have the right understanding of the market, that's why.

Here are ten tips for you to think about, so you don't become a statistic in the line of failed forex traders.

1. Be Realistic

The Forex market naturally goes up and down, so you're bound to make a loss here and there, as do all traders. So don't be afraid to take a loss or make a mistake. And don't expect to be able to catch the peak of the trade either. No one knows exactly when a currency exchange rate has peaked, so realize that the main thing is just to take a good profit.

2. Accept Responsibility for Trades

You need to accept responsibility for your trading actions, your losses and of course your gains. You are ultimately the one in charge of your trading, even if you use a robot, so make sure you actually take charge of your trading. Learn from your mistakes and acquire ...
... a thirst for knowledge on all things forex. The more informed you are, the less likely you'll make silly mistakes.

3. Be Strict with Money Management

You will get losses, and hopefully some gains, but the key is to minimize your losses. Always put a stop before you start your trade. As the term suggests, a stop will stop you trading on a running loss, and while you may lose a little, you won't lose a lot. Remember, running losses rarely turn around, so don't chase them in the hopes that they will.

4. Make Your Trading Plan Simple

Simple trading plans work the best as there are fewer components to monitor and get right. Complex strategies simply have too many things that can go wrong. So keep it simple.

5. Get Educated

Like all new skills, you can't just expect to make a few trades and make a huge profit without a bit of training first. There are many free forex training sites on the internet, as well as forums and forex communities. Make the most of them and learn, learn, learn. And if you get the right information the first time, it won't really take you too long to get up to speed.

6. Analyse Technical Data

Any decent forex training will teach you how to interpret charts, as this the most effective way to trade. All you need to do is learn how to identify the right chart formations and profitable chart set ups. And don't let those charts scare you - once you find out how, you'll be amazed how easy it really is.

7. Don't Get Greedy with Leverage

Leverage or Margin is the ratio of the value of a transaction to the required deposit. For example, if you have a leverage of 100:1, you can trade currency worth 100 times the amount of your deposit. You can get up to 200:1 deposit. This can give you great gains, but can also give you huge losses. So use no more than 10- 20:1 when you're starting so you don't ruin your account.

8. Be Patient

Don't feel that you have trade too often to make money. One or two good trades a month is all you need to make good gains. This is by far the best way to trade, since you end up focusing on the high odds trades which offer the biggest profits.

9. Be Disciplined

You need to be disciplined when it comes to trading. Don't panic if you lose a trade, and don't become over-excited and risk more than you can afford based on a few good trades. The key is finding a system that works, and running with it - losses and all. Obviously, if your system is losing more than it is gaining, then you need to review your strategy.

10. Don't rely on Forex Robots or Expert Advisors

If you think you are going to get rich by sitting back and let your computer do all the work, well think again. Robots and expert advisors are an excellent tool to help you implement your trading strategy and give you some tips for trading, but at the end of the day you are in control of your trading.

Remember, there is real potential to make money with forex trading, but you need to be informed and prepared to put in the effort to do your homework and develop your trading skills.
You can learn more about trading with forex robots by checking out this Forex Robot Comparison, comparing the top 3 Forex robots on the market. You'll also find lots of free advice and templates on a range of personal finance topics from saving money to investing for retirement.