Every attempt to trade on the Foreign Exchange market without analysis and study is similar to a game. The game is fun; you can quickly bring in a fortune however, you can also lose money.
Tip 1. Never trade on the Foreign Exchange market with real money until you have practiced on a Forex Demo!
Take 2 months to practice on a demo account. 90% of new traders lose money because they do not have enough money, practice and discipline. The 10% who have practiced will do much better by the experience they have gained in the Demo.
Tip 2. Go with the trend!
Go with the trend to increase your success rate. Trading against the trend is also an option, but then you must have nerves of steel, and constantly watch out that this method of trading does not work against you, because it can lead to great losses. By trading with the trend, you will reduce your risk and increase the likelihood that you will receive a good return on your investment.
Tip 3. Always look at the weekly and monthly rate statistics.
It gives you a good insight of the whole picture of price changes and you can easily see the trend that has the value of a specific rate. If you are trading and only look at the statistics of the last hour, you are taking large risks because there can be huge fluctuations in one day or week. If you are having trouble discovering a trend in the charts, then choose a week chart or a month chart. In this way, there are always trends to be uncovered in a rate.
Make sure that you know the trend well. Unless you are a Forex scalper, who does not look at trends for one day or one week, or that looks at the trend during the last 5 or 10 minutes. There are obviously great risks involved here, but also huge profits.
Tip 4. Never deposit a large percentage of your account balance.
The big difference between success and loss is that you must be able to survive in poor circumstances. It may be tempting to deposit your entire balance; however, that will mean that if you lose you are out of the game. Therefore, do not deposit too much and ensure that you always have money in your account.
Tip 5. Put your emotions to one side and stay calm.
After a loss, do not try to make it better by gambling with large amounts. If you do not stay calm in these moments then you are taking large risks, which will result in larger losses.
Tip 6. Choose the correct time frame.
Choose a time frame that you feel comfortable with and that will give you enough time to analyze the Foreign Exchange markets. Some people like more action and do not want to wait to see what the market does. They opt for a short time frame, which makes it difficult to predict what the rate is going to do.
Tip 7 Do not trade if you have doubts.
If you are not sure about a purchase then do not do it. If it is not clear what the market is going to do, do not do anything. That is a lot better than to gamble with the risk of losing your money.
Tip 8. Use the stop loss.
If you have a trade which is making loses, and you hope that it will improve, there are people that adjust the stop loss. Try to learn this. The chances are that your losses will get higher than they already are. Accept your loss. In addition, do not put any more money into a losing trade. Even if you maintain the trade, your money is stuck and you cannot count on it going further. Set stop loss and do not alter it.
Tip 9. Keep it simple.
An excessive amount of information such as charts, news, trends and other information gives a distorted and difficult picture of what a trade is going to do. To avoid too much confusion, develop your own simple, working method for trading on the Forex.
Bonus tip Tip 10. Choose the right day.
Despite the fact that you can trade on the forex market whenever you want, it is still wise to choose the right day. Trading on a Monday is not advised as the market has just started and it is still busy forming a new trend, rates can fluctuate unexpectedly. Friday afternoon is also higher risk due to the amount of trade closures. The best days to trade on the forex are Tuesday, Wednesday and Thursday.