3 Essential Tips for New Forex Traders

Last Updated on June 3, 2022 by admin

If you’re new to forex trading, you have landed in the right place. In this article, we will explore some of the essential things you should be doing as a new trader to ensure your long-term success!

Learn Your Strategy

It seems obvious, but too many people skip the studying stage and try and jump straight into trading. Whilst this is tempting after watching a couple of YouTube videos about forex, it’s not sensible at all.

Many people take years to master the Forex trading skill, and you should think of it like university education; you wouldn’t hop straight in and perform surgery on a patient without first training as a surgeon, so why would you do the same with Forex?

It is said that 90% of Forex traders fail. However, this statistic is skewed, because it includes the people who jumped in too soon, lost a lot of money and gave up. If you take the time to learn a strategy and practice it, honing your skills, you will be much better off in the long run!

There are many courses out there, both paid and free, but if you’re a total newbie, , Baby Pips have some great beginner courses to get you started on the basics before you move onto advanced strategies.

Demo & Journal

Once you have your trading system down, it’s important to demo. This is a good transition from learning to practicing before finally going live. You can get an MT4 download and a demo account free of charge to start and practice trades and see how they play out.

You do need to be mindful that while demo trading is a useful tool, and should always be done before risking real money, it’s not exactly like live trading, as live market conditions have more volatility when it comes to spreads etc.

You should also journal all your trades. This is a case of writing down things like entry and exit prices and reasons for taking the trade, what happened, what you could have done better and even your emotions. Journaling is a big part of a professional trader’s journey and will allow you to learn from your mistakes.

Work on Your Mindset

Mindset plays a big part in trading; it’s common for new traders to become too emotional and revenge trade or change their lot size to compensate for a loss (which can lead to a bigger loss.)

To combat this, you need to stick to set rules so that your trading becomes robotic, for example, only ever risking 1% of your capital per trade.

You should map out your rules in advance, and these should include rules for entry, risk management (use a lot size calculator to help you determine lot size), and rules for exit. Having these things laid out prior to trading will make becoming emotional a lot less probable.

There is also a very good resource you can listen to for free on YouTube called Trading in The Zone. This is a book by Mark Douglas on this very topic and it’s a must-have for new Forex traders.

Hopefully these tips have given you the confidence you need to start trading!

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