8 Tips To Become A Successful Forex Trader In 2019
One of the most responsible things people can do to welcome the new year is to start increasing
their financial literacy. Whether you are looking to make extra income or are interested in
learning how the global market works, starting a full-time or part-time career in the foreign
exchange (Forex) market is a great idea. It is the world’s largest and most liquid market where
there is no shortage of opportunities that a person can easily take advantage of.
Of course, it isn’t safe to assume that a person can immediately become a millionaire the minute
they open a Forex trading account. With great opportunities come great risks, and people who are
looking to getting rich quick will surely be disappointed to know that hard work and knowledge
are important tools every trader needs to have. Even if you consider trading digital coins, your
priority – aside from increasing your knowledge – is keeping cryptocurrency safe so it doesn’t
fall into the wrong hands.
8 Tips To Be A Successful Forex Trader:
1. Study The Market
If you’re interested in trading Forex, you need to first understand what the market is about
and how people usually trade global currencies. With a large market such as this, there
are various trading styles that you be acquainted of, including currency futures, currency
options, currency ETFs, and spot Forex.
2. Pick The Right Software
Investing in a Forex trading platform requires due diligence in reading reviews and other
objective information. Remember that when you’re trading currencies, you need to use a
platform that is reliable and safe. When selecting a platform, make sure it runs on a
separate server for fast speed, provides accurate Forex quotes, contains analysis tools, and
has a reliable security system that keeps your sensitive data safe.
3. Pick The Right Broker
Similar to selecting a trading platform, picking the right broker for your type of trade is
just as important. After all, they will be responsible for placing your orders whenever you
need it. To be safe, hire a regulated broker since they are bound by the duty to not
compromise their client’s business endeavors.
4. Create Your Own Strategy
The market is unpredictable – even the slightest of change can alter the value of a
currency without a moment’s notice. Hence, don’t start trading without a strategy. In a
market as big as forex, you need to formulate a plan that manages your risks while
determining the best time to enter or exit a trade.
5. Practice On A Demo Account
Before trying out your new strategy for the day, practice it on a demo account.
Fortunately, there are various platforms that offer demo accounts – these serve as a
simulation tool for beginners to understand the market and also work as a tryout avenue
6. Analyze Your Trades
Many trading platforms offer analysis tools that help identify trends and organize
information in ready-to-read charts. Before making a trade, use these tools as a guide in
placing your next bid. Remember to monitor your patterns every so often so you can
identify the best time to make your next move.
7. Keep Cool
Tensions can run high especially when you’re trading in a volatile market. The best way
to trade is to keep a cool head in order to come up with the best move. The reason for this
is being emotional can affect your decision making and may even cause you to lose more
than you can afford.
8. Use Stop-Losses
A stop-loss is basically an order you place with your broker in order to sell a security
when it reaches a specific price. This order is often utilized when you wish to reduce
risks on a trader’s loss on a position especially when you aren’t available to watch the
position in real time.
Starting the new year with a goal to achieve financial independence is a responsible idea, and
Forex trading is a good start. Although there are various risks that come with trading Forex,
studying Forex, how it works, and how a currency’s value is affected by various factors can
mitigate these risks. In the process, you understand the importance of fiscal responsibility while achieving financial literacy. Remember to continuously study the market to keep yourself on
your toes. Good luck!