Investing in Forex can be a very profitable investment move. There are plenty of people who made fortunes in Forex. It's truly a legitimate way of investing your money.
On the downside, there are also a lot of people who lost money on Foreign Exchange. So, what's the biggest difference between the winners and losers?
Simple, it's all about education and experience. Hence, if you want to start earning in Forex, you must first educate yourself and gain wisdom through experience. To help you with that, here are 10 top Forex trading tips to get you started.Know Yourself
Most people think that in order to win at Forex, you must know the next big secret. However, there is a bigger issue that needs to be addressed and it's not on the Forex charts or fundamentals.
What this article is talking about is yourself. You must know yourself and your lifestyle and see how you can fix it to forex.
For example, you must know your risk tolerance. Maybe you are not comfortable with methods that involve high-risk, high reward. So choose a method that is more in line with your personality. Otherwise, your Forex journey will be painful.Goals
You need to know your goals with Forex before you even make your first live trade. Are you planning to earn extra income via Forex? Or, are you planning to gain financial freedom via Forex?
These goals are not the same, and thus they need different sets of plans. Hence, you need to know your goals and plan accordingly.Choose A Broker Wisely
It is very important to choose the right broker, personally I use cmc markets. Not all brokers are the same, and some even have dishonest motives. You would want to do the proper research to ensure the safety of your hard-earned investment money.
Also, broker commission rates play a big impact on your strategy. You may have a strategy that is profitable on paper, but when you apply broker rates, things are not that profitable.Leverage
A lot of people are attracted to Forex because of leverage. However, leverage is a double-edged sword. Yes, you can win big, but you can also lose big.
Determine the right leverage ratio in relation to your goals, education and experience. If you are a beginner, then you are going to make mistakes. Hence, its always better to have a lower leverage ratio in the beginning as this reduces losing too much money when you make mistakes.Start Small
When it comes to Forex investment money, it's always best to start small. Let that account grow by winning trades, and not by more deposits.
If you are burning money because you are losing with your trades, then putting more money will only put more money in the furnace. Always test and adjust until you can consistently produce winning trades. Only then you can start thinking of depositing more money as a means of growing your investment account.Focus
When you are starting, focus on just one currency pair. Some successful Forex traders only follow and trade a single pair. So you can be successful with only one currency pair.
Currency pairs have their own behavior. The more you focus on one pair, the more "insightful" you become with that pair. When you already have the experience, you can then expand to other pairs if you wish.Protect The Downside
Before you even enter a trade, make sure that you know when to get out. This means that you should know when you should take profits and when to cut losses. Also, never ever put more money in a losing position.Keep Your Emotion In Check
We are all human beings, and thus we are subject to emotions. However, emotions have little place in successful trading. Greed and fear are emotions that you should really look out for as they can cause you to lose money.
To minimize the impact of emotions, start with small investment amounts and plan your entry and exit beforehand. Most importantly, don't hold or sell a position based on emotions.Take Notes
One of the ways to fast track your education is to take notes. Keep a record of your successful and losing trades. Study them, and try to find a weakness in your trading method that you can refine.
Forex is just like any other legitimate investment vehicle. It's not a get-rich-quick scheme. To be successful in Forex, one of the things you will need is education. Thus, keep in mind the tips above to help your Forex journey moving forward.