In this video, I share 10 Forex (and generic) trading tips for beginners! These tips are what I wish I knew before I started trading. These trading tips for beginners include different topics such as; trading strategies, trading psychology, trading education etc.
10 Forex Trading Tips For Beginners
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10 Forex Trading Tips For Beginners- Script
Forex Trading Tips 1. Learn Importance of Risk Management
When I started to learn how to trade, I learnt the practice of risk management, but I didn’t quite learn just how important the topic was. Because managing risk effectively is crucial for trading.
First, protect capital. Then make money.
This concept of preserving your capital applies to all areas of trading which we will discover in tip 2…
Forex Trading Tips 2. Money Goes Down Quickly
Bulls take the stairs and bears jump out the window. The same applies to your account once you start losing money because the moment you start to lose money, it drops quickly.
Understanding this concept can help you to manage your account balance to prevent unnecessary losses. There are different ways that you can preserve your capital.
E.g. Before you enroll onto a course, firstly ask yourself whether it is necessary for your development as a trader, and whether there are any other more cost effective options.
Also it can be very useful to apply this concept to any resources that you are thinking about purchasing.
E.g. I purchased and use the TradingView charting software and I definitely recommend this software because it is valuable and good value for money. However other resources such as paid for subscriptions to receive trading news may not be a necessary expense based on your strategy.
The same can be said for your broker because brokers charge different fees, commissions and also the exchange fees can vary. All of these costs can help to make or break an account for a beginner trader.
Forex Trading Tips 3. Practice In A Demo
If you trade live too soon, you have a chance of risking and losing a lot of money. Therefore it is very important to practice trading for as long as necessary in risk free environment paper trading. Remember our first Forex trading tip – Risk management. This tip backs up the original tip!
In a demo you can practice your strategy, trade management, the mechanisms of your platform and everything you need technically, to feel confident taking a trade.
Forex Trading Tips 4. Know When Not To Trade
As a beginner trader, you can come across many different hurdles such as investing a lot of time to study and practice trading. As well as investing money into education, the right tools and resources for trading. Finally, you will also need to develop your emotional awareness.
An important factor that is not always taken into account are the unknown experiences that occur in life, such as moving house, or experiencing a negative event such as bereavement or being unwell. If these experiences occur, then it is important to know when to stop trading and take a break. Because this in itself is a form of risk management.
E.g. I have moved house 3 times in the 2 years that I have been trading and I found that I wasn’t focused or performing at my optimum for trading, this gave a negative impact on my account. However if I took time out and had a short break from trading, then I would have preserved my capital which would have been better risk management.
Forex Trading Tips 5. Try Different Trading Styles
I recommend exploring different styles of trading and practice them for a couple of months in a demo. This gives you an opportunity to find a style/ strategy of trading that you enjoy and which works best for you, before you transition to trading with real money.
When I first started trading, I want to trade like my teacher; Ross from Warrior Trading. I really wanted to trade small caps, however when I started practicing them, I found that the style didn’t match my personality. As I found it too quick and it didn’t really utilise technical analysis which is what I enjoy with trading Forex.
Different types of trading
- Small/ Mid/ Large Cap Stocks
- Foreign Exchange Market (Forex)
- Options
- Cryptocurrency
Different Time Frames of Trading
- Scalp trading
- Day trading
- Swing trading
Forex Trading Tips 6. Make It Accessible For You
E.g. As I am based in the UK, when I traded US stocks I found it quite a difficult time as it meant trading at 14:00. Whereas trading Forex, I can trade the London breakout at 7:00/ 8:00 (depending on the time of year).
Therefore I recommend researching your style of trading before you commit to learning it, to make sure that you can devote the correct time for that trading style.
Forex Trading Tips 7. Document Progress & Review Data
This includes recording all of the traded that you take, and review the data so that you can continually improve and develop. I use a really useful tool to help me record, track and analyse my trading data. Click here for more information on my Forex Trade Tracker Review!
E.g. if you find that by looking through your records for the month, that you discover that you are cutting your winners too short. Then it gives you a focus of what you can improve on with your trading.
Forex Trading Tips 8. Develop Emotional Intelligence (Trading Psychology)
Trading can be very difficult. In order to be a successful trader requires:
50% of 100% Technical Understanding (technical analysis, trade management, risk management etc.)
50% of 100% Emotional Awareness (trading psychology)
Trading psychology is huge and can often be underestimated. But being aware of and developing your EQ (emotional intelligence), can really help you to become a successful trader.
There are activities that you can consistently carry out to help develop your EQ such as:
- Meditation
- Yoga
- Exercise
- QiGong
Consistently carrying out these activities can develop your discipline, focus, motivation and, as a result, your EQ.
Forex Trading Tips 9. Trading Is A Marathon, Not A Sprint
Many beginner traders enter trading to make money quick. Although this would be great, it is not always the way with trading. Trading is more about the long term progression and that’s why this quote it perfect to follow.
Forex Trading Tips 10. Don’t Give Up!
Carry on trading, no matter how hard it gets, or how down you feel when you experience those losing days. You have to keep motivated and carry on because trading takes time to master but the long term rewards are definitely worth it!
Bonus Tip: Online Community
Trading can be a solitary journey and it can sometimes get confusing, Therefore it can be useful to find an online community. Specifically other traders like you who are learning and developing their skills, who you can connect with.
TRADING RESOURCES
💻 TRADING LAPTOP – https://amzn.to/2Xyp1If
💻 PORTABLE TRADING SCREENS – https://amzn.to/3e7LUI2
FOLDING STAND FOR SCREENS – https://amzn.to/2JQsJER
TRADING SOFTWARE
TradingView | The BEST trading CHARTING platform I use – http://bit.ly/2lYrmeI
TRADING BOOKS
MASTER Trading Psychology – https://amzn.to/3cpilks
Trading in the Zone by Mark Douglas – https://amzn.to/33FihJp
How to Day Trade – https://amzn.to/2UuzPUC
CANDLESTICK TRADING BIBLE – https://bit.ly/2JG1rAY
FURTHER READING
How to find the best stocks for day trading
Trading View Tutorial for beginners
Day Trading Setup for Beginners
I hope you found this article useful!
