Tips for Successful Forex Trading

Posted by forex on August 21st, 2010

As we all know, Forex trading is quite complicated and risky. The following tips will help you in successful Forex trading.


  1. Study and analysis: Forex trading is not like gambling. It involves lots of study and analysis. If you don?t have your basics right, get them straight before attempting trading with real money.
  2. Practice with demo account: If you are new to Forex trading, please, please, please practice with demo account, before going live. Get acquainted with demo account for at least a month, before engaging in live trading.
  3. Start small: A newbie should always start small. At least 90% of the traders fail to make any substantial income from Forex trading. So, start with a small bank and let that account grow with time.
  4. Respect trend: An old adage in Forex market is ?Trend is friend?. So, if you are new, then it is advisable to move with the trend
  5. Hone your skills: Always keep yourself posted with the latest Forex news. It will help you in decision making.
  6.  Consider larger time frames for deciding trends: Take a broad view of the market to pick your trade. If you are working on say 15 minute time frame, then look at one hour time frame to get the idea of where the market is heading.
  7. Limit your risk: No matter how experienced you are, you cannot eliminate the risk element completely. So, if you are new, then limit your risk exposure. Your risk should not be larger than 5% of your account balance.
  8. Stay free of emotions: Emotions are not good for your trading. They will kill your trades. Fear and greed are the worst emotions of traders. Trade using your brain, and not your heart.
  9. Choosing the right time frame: Depending on your lifestyle and time availability, choose an appropriate time frame. If you can?t devote days and weeks at a stretch, choose smaller time frames.
  10. Trade only at the right times: Too much trading doesn?t lead to great profits. In fact, the contrary is true. There would be days when the market makes sudden moves. If you are not able to clearly identify the trend, then it would be prudent to stay away from the market.
  11. Simplicity: Keep your strategies, charts, analysis simple. Don?t get drowned with too much of complex information.
  12. Keep low risk/reward ratio: The risk to reward ratio should be low, if you want to make consistent profits in Forex trading. Stay away from a trade that gives returns at a higher risk.
  13. Curtail losses: If you are making a loss on a trade, don?t wait too long on a loss making trade.

Last but not the least, most Forex traders feel stressed out and anxiety. If you want to experience happy and easy trading, never trade beyond your means.

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Joined: August 18th, 2010
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