6 Forex Trading Tips for Beginners

As a beginning forex trader, you can easily get lost, confused or overwhelmed with all the information you are bombarded with on the internet about trading. The best thing to do is to just take it slow, learn how to trade properly with Xchnge Investment Training and don’t rush it.

The following 6 forex trading tips are things that we inform our clients when they first began trading. So, with that in mind, we are giving you six of the most important trading tips for a beginning (or any) trader to absorb before getting started in the market.

1. Learn the basics first

Many beginning traders try jumping right into the market with no real background knowledge on the markets they are trading. To build a solid trading foundation, you need to take the time to learn about how the Forex market works (or any market you’re trading) and really get a solid understanding of all the jargon, etc. before you actually dive in and start learning a trading strategy. You can gain this knowledge by taking our forex trading introduction course.

2. Learn one trading strategy, stick with it.

One of the biggest mistakes with beginning traders make again and again, is changing trading methods too often. If you are using a logical, common sense trading method you need to really learn it and master it before you do anything else. If you jump from method to method because you think you’ll find some “Holy Grail” trading strategy, you are simply operating on false hope and being illogical, and you will lose money.

Also, don’t switch methods just because you had a few losing trades. Any method will have a certain amount of losers over a sample size of trades, this is normal and part of trading. You cannot let losing trades affect you too much; you really do need ice cold discipline to excel at trading.

3. Don’t get overwhelmed

It’s easy to feel overwhelmed with information and trading strategies as a beginning trader, it happens to all of us in the beginning. The best way to limit this or avoid it altogether, is to find a mentor, like Xchnge Investment Training to learn from, and piggy back off their success. We offer lots of trading strategies for you to learn with our course that we run throughout South Africa, the best thing you can do is block everything else out, forget everything you’ve learned, and start over with our training courses from a clean slate and focus only on that until you really know what you’re doing.

4. Don’t freak out when a trade moves against you

This one is big, because most traders, especially beginners, freak out or over-react at the first sign of a trade moving against them. This is much more of a problem in live trading than demo trading, due to the differences in emotion between them, but it is a problem and it needs to be addressed.

A trade moving against you is normal. You can have trades move to within 5 pips of your stop loss and go on to be huge winners after that. If you had freaked out and closed them out before they hit the stop loss, you would have not only lost money, but would have lost a lot of profit too. This is the main reason why you need to let your trades play out and not close them out early only because they’ve moved against you.

5. Don’t put stop losses too close

This one is big, and it takes most traders a while and a lot of lost money to figure it out; you have to place your stop losses at a ‘safe’ distance away from your entry price. If you place them too close you will get stopped out for a loss before the market really had a chance to move in your favour. In other words, your trade idea may have been right, but because you placed your stop loss too close, you got stopped out before the move you were anticipating occurred.

6. Don’t just jump in with no education

It’s always amazing how many people want to risk their money in the market without having obtained any training or trading education. Then later, after they’ve lost a bunch of money, they decide to get some education. This is backwards, it’s like trying to fly an airplane without going to flight school, then you crash the plane and almost die, then after all that you decide to go to flight school many traders do this exact same thing with their trading accounts, don’t be one of them!