In this article, you’ll discover the top forex trading tips that all traders should know. Whether you trade exclusively with a broker like EagleFX or choose to spread your trading activities among several brokerages, each of these tips remains applicable. When one is able to improve their trading performance, an increase in profits will naturally follow. If you’re new to the world of forex trading, now is the perfect time to learn. If you’ve already made some mistakes, pick yourself up, brush yourself off, read the forex trading tips below, and start all over again.
1Choose the Best Broker
Choosing the best forex broker is a vitally important step. Top-tier brokers such as EagleFX will have a number of positive reviews and recommendations to be found online. You’ll want a broker that is both trustworthy and reliable. Remember to also consider other factors, such as trading conditions, as it will be these that factor into just how much you earn from trading.
2Create Your Own Action Plan
No list of FX trading tips would be complete without some mention of planning. Many first-time traders never even think of creating an action plan. Each plan will be different, of course, but should include what your profit goals are and how you plan to reach those goals.
3Start with the Basics
Don’t be tempted to jump ahead of yourself when learning how to trade. Start with the absolute basics and progress from that point. It may be frustrating to take this approach, as you know there are profits just waiting to be earned, but in the end, a more structured approach will yield the best results.
4Control Your Emotions
This is a tough task for even the most seasoned of traders. Naturally, elation comes with a streak of profitable trades, while a losing streak lends to frustration and even depression. Strong emotions can lead to terrible decisions being made. Trading too much, trading too little, investing large amounts, or missing out on prime opportunities out of fear are just a few of the possibilities. If you realize that emotion is overcoming you, take a step back and reevaluate the situation.
5Beware of Too Many Fees
It’s not unusual for a broker to fees. After all, they are running a business with the expectation of earning a profit. However, some brokers do charge more fees than others. If possible, trade with a broker such as EagleFX, as they charge only commission fees and not fees on deposits or withdrawals. They also do not charge account inactivity fees, a fee that is becoming more common in the industry.
6Use a Demo Account to Practice
Of all the forex trading tips for beginners, this one may be the most important. Knowing that practice makes perfect, consider starting out with a demo account and practicing trading with mock funds before diving into the live platform and trading with actual money. Brokers like the EagleFX offer free, unlimited demo accounts. Take advantage of this type of offer and practice, practice, practice!
7Never Skip Technical & Fundamental Analysis
The process of analysis is what separates trading from gambling. Could you profit on a mere guess? Yes, you could. Can you expect to generate consistent profits over the long term by guessing? Only if you are the luckiest person on the planet. Never ever skip out on analysis. If you do not have time to study the market, then you are better off not trading at all until you have time to carry out detailed analysis.
8Remember: No Risk, No Reward
It is important to remember that some level of risk will always be involved in FX trading, but without risk, there is no reward. When the decision was made to become a trader, you hopefully accepted the potential of losing money. If you didn’t, it’s time that you think this through. There is no way to be successful 100% of the time. The good news is that you do not need a 100% success rate in order to be profitable.
Lasting success never has and never will be instantaneous. Success is the result of a strong work ethic and proper planning. Far too many traders look for shortcuts and easy paths to profit. Shortcuts do not exist, so please, do not waste any time searching for them and do not believe anyone who tells you otherwise.
10Never Stop Learning
There is something new to be learned with every trade. As with everything in life, the process of learning in an ongoing one and it should never truly end. As you continue to trade over time, you’ll learn more and more and continually become a better trader. If you stop trying to expand your horizons after mastering the basics, you’ll never realize your full potential. Yes, studying does require time and effort, but there are plenty of free resources available online which will make the process easier.
11Don’t Be Afraid to Take Breaks
Never be afraid to stop trading for a while and take a break. This is especially true during hectic trading sessions that are stressful. Taking a short break could be exactly what is needed in order to regroup. Read, watch some television, take a walk, or do whatever is needed to clear your head. You’ll be surprised at just how much better you feel when you return to trading after a break.
12Trade with the Trend
You’ve likely heard the saying, “the trend is your friend” at some point and what they say is true. You will need to learn how to spot and trade along with price trends if you’re going to be successful. Obviously, not every trend is going to provide you with profit, but you will want to be ready to enter the market whenever a clear upward or downward trend is taking place.
13Seek Out Excellent Trading Conditions
The platform itself is not quite as important as the trading conditions within it. Ideally, you’ll be trading with a broker that offers great spreads, flexible leverage, no re-quotes, and fast processing. If you’re considering opening an account with EagleFX, you will be provided with spreads as low as 0.1 pips and leverage as high as 1:500. They also act as a STP broker, which means they will not be trading against you.
14Have a Strategy
Carefully calculated moves are the sign of a skilled trader. You can start to create a strategy by asking yourself key questions and planning for the unexpected. Have a backup plan in place and do not be afraid to use it if things go awry. Once you have a general strategy in place, you can focus on more fine-tuned trading strategies and methods.
15Learn How to Read Charts
Take the time required to learn how to read price charts. You will be trading on a variety of assets and will need to understand the information shown within these charts. The platform will contain these charts, and some are easier to read than others. MetaTrader 4, which is the platform used by EagleFX, is the most widely used and popular of all platforms. There are plenty of MT4 educational resources available.
16Don’t Overspend on Any One Trade
Money management is vitally important. Spreading your trading funds out amongst a larger number of trades will also be a better plan than committing substantial amounts of money to only a handful of trades. Remember that no matter how much analysis you’ve done, the market can always move against you. Protect your funds by having a reasonable money management plan in place.
17Don’t Be Overcome by Greed
Greediness is natural but can lead to unnecessary risks. To avoid problems, consider setting loss and profit targets as part of your trading plan. When either of these levels are arrived at, stop trading. Again, fund management is extremely important and continues to be an area within which traders typically struggle.
18Put Stop-Losses to Use
The ability to set a stop-loss is one which should not be ignored. By choosing not to set a stop-loss, you’re essentially just giving yourself permission to keep a bad trade open while hoping that the market will turn and move in your favor. Bad situations rarely change though, so use a stop loss to avoid the possibility of losing all of your capital on a single trade. If you need a second reason for using a stop-loss, they close trades manually, with no effort required on your part!
19Keep a Trade Journal
If time allows, consider keeping a trade journal to track your progress. Add in notes regarding which strategies worked well for you and which did not. Broker’s such as EagleFX provide a back-office account area within which trade history can be viewed. Feel free to print these reports and search for patterns. Even if you devote only an hour a week to reviewing past trades, you’ll reap rewards for the time spent.
If you want to be successful in the world of forex, you’ll need to be flexible. Ask any of the top traders and you’ll quickly see that those individuals are always testing and evolving. Rarely do they use only one strategy, and rarely do they trade with only one asset. Being flexible will allow you to grow as a trader, and as a result, grow your profits.
This may seem like a lot of information to process, but once you start trading, you should find it relatively easy to put these forex trading tips into action. Be persistent and disciplined in order to realize the best result. Of course, even the best forex trading tips are not going to turn you into a millionaire overnight, but they will help you to prepare for the journey. Now, take what you’ve learned and trade wisely!