Forex Trading Tips – Avoid Fatal Mistakes During Your Trading Career

There are iron rules in each business and ignoring these rules will make the players kicked out quickly from the game, this is also applied in forex trading. These following forex trading tips can help you to make profits, keep your fund save, and play by the rules:

1. Never Make An Entry Without Doing Analysis First

There area always times when you will stumble upon something that looks very promising, perhaps from news or trends. These ‘hunch’ may bring you profits once or twice, but it just coincidence, you will never survive in forex trading if all that you got is ‘hunch’ instead of proper analysis and logical decisions.

This has happened to the majority of the traders when they began; they manage to make a profit by guessing, thinking that they already grasp the secrets of forex trading, and start offering forex trading tips to their acquaintances. This attitude is the same to a gambler in a casino: throw the dice and pray. You will lose everything in no time with this behavior.

2. Learn One At A Time

Forex Trading has many aspects and elements; it is simply not possible to master it right away. If you are a novice, do not deposit USD10,000 in your new account and have various tests with it. Trading currency is similar to gambling; when someone lose, there are always a winner at the other side. These winners will finish your USD10,000 in no time and by reading this forex trading tips you have learned to avoid it.

The best approach is to take it slow. Start with a practice/dummy account while learning. You are able to test various strategies, currency pairs, robots, and trading signals there without worries. If you have discovered a system that works, you can move to a mini account for further test. However, if you believe in your system, go ahead and open a live account.

Please note that “system that works” means the system can give you steady profits at the end of the month without fails and without you have to keep staring the monitors to check your open positions. If you have confidence in it, learn to control your emotion and let it do the work.

3. Use a Credible Forex Trading Platform/Online Forex Broker

No matter how good your system is, trading in a bad quality platform will kill your opportunity to gain profits. Most of forex broker will provide you free trading platform, but you need to check some things there:

- Provide access to your favorite currency pairs. At the minimum it must support common currency pair like EUR/USD, GBP/USD, and USD/JPY.

- Allow you to put take profit and stop loss order; this is very important risk management method.

- Provide charting feature, news feed, advices, and research material; to make it short: all that you need to make proper analysis. If possible, a daily forex trading tips will be beneficial too.

- Customer support available. Whenever possible, find the one that have 24 hours support so you can have someone to help you anytime you are in trouble.

- Forex Trading is a global business, so it is good if your broker take deposit in various currencies.

- No complicated procedures, including withdrawal request and process.

4. Discover how to Use Stop Loss and Take Profit Order

Stop Loss and Take Profit is orders that you put to close your position at certain price. Example: you buy GBP at 1.678; then you place Stop Loss order at 1.648 to limit your loss by 30 pips. You also put Take Profit order at 1.708 which means you will close it when you get 30 pips profit.

This is important so that you can stop your emotion to get involved on the “close decision” and screw it up. If the market is move against you, you will not close the position because you really want the market to swing back to your side, thus turn potential loss into profits. In most cases, this will only bring you more losses. This is very important since it is the cause of many traders falls. If you don’t remember everything that I mentioned in this forex trading tips, remember this: emotion is only going to make your trader career short.

The other scenario: The market moves as you wish and you see potential profit, but you won’t close it since you want as much profit as you can get. Nobody know when the market will turn against you and when it does, it usually already too late. In both scenarios, greed is the one in movement. But when logic dictates, you can control greed.

Main point here: no need to rush everything when you learn or trade forex. Spend some time to learn the rules, experiment, practice, analyze, and read several forex trading tips for the day. However, I don’t recommend you to do it by yourself since it can be long and painful process.

See how to choose the right broker to put your money in forex broker with online service. If it looks too complicated, you might want to check managed forex trading for another alternative