Today I will share my 15 best forex trading tips with you. Forex trading can be a lucrative endeavor if you know what to do and are ready for the challenges. But there is no need to get discouraged because of all the losses experienced by inexperienced traders in forex over time, you should not become one of them either!
You have probably heard that 90% lose money in forex, and only 10% make money consistently. After reading this article’s 15 forex trading tips on how to avoid disasters while maximizing your potential as an investor or trader, I’m sure you can have the potential to become a top 10% trader.
- Introduction to the foreign exchange market
- #1 Take forex education seriously
- #2 Keep up with the latest forex news
- #3 Find a good forex mentor
- #4 Surround yourself with like-minded traders
- #5 Consistency is the key in forex
- #6 Don’t use overbought and oversold indicators
- #7 Practice on a demo account
- #8 Trade with the trend
- #9 Trade on the longer time frames
- #10 Use one-to-one risk to reward ratio
- #11 Become a Patient forex trader
- #12 Develop your own trading strategy
- #13 Focus on the potential for growth
- #14 Make a trading plan
- #15 Winning is not everything in Forex
- FAQ Trading Tips
So you’ve decided to start trading forex? Here are a few tips for beginners.
If you’re new to the world of investing and want some helpful hints before exchanging currency pairs on an international exchange platform, eh? Well, we have just what it takes!
- Top 5 Smart ideas to apply on all platforms
- How to make money at Forex with patience
- Making money with forex trading.
- Beginner’s guide to successful forex trading.
- Stop losing money – make it easy with these forex trading tips
- Get a free forex trading course and start making profits today
- Learn which currency pairs to trade – understand the currency market from beginner to expert level
- The #1 tool trusted by 20,000 sites
- Learn forex trading from experts.
Introduction to the foreign exchange market
You’re really going to want to read very carefully because I’m about to share with you some tips that will change your life. They’ll make Forex trading easy-peasy and help you start making the money of your dreams in no time!
We all know how tough it can be to not having enough money for everyday life, especially when it seems like there’s nothing left but an endless sea of debt and misery. For those who have been struggling day after day just trying not to go under from a financial standpoint – don’t despair, there is hope! This is why today I am excited to talk about the key strategies anyone interested in Forex Trading should take note offs…
The largest financial market
The foreign exchange market is the largest financial market in the world and occurs 24 hours a day, closing only on weekends. It’s comprised of global network that exchanges currencies globally around-the-clock which determines how much one unit of currency costs compared to another. The biggest currency pair is euro dollar (EURUSD).
The foreign exchange market is an over-the-counter (OTC) marketplace that determines the exchange rate for global currencies. It is, by far, the largest financial market in the world and is comprised of a global network of financial centers that transact 24 hours a day, closing only on the weekends.Investopedia: What Is the Foreign Exchange Market?
#1 Take forex education seriously
Forex trading tips #1 is education. Knowledge is for sure the power in forex and every forex trader needs to study and practice. One of the keys to success as a trader is constantly improving one’s skills. As you become more experienced, it becomes essential that you are able to execute even better trades and learn about new strategies for making profits.
Luckily, there is an endless amount of resources available online which make it easy for both beginners and experts alike to find all they need in order “to stay on top.” Whether your goal is news updates or technical analysis–you’ll want any sites used by yourself or others to be trustworthy sources with reliable information.
Some of the best places for free forex education is:
- Currency trading course from Admiral Markets
- Trading Education including price action fundamentals
- Free forex courses, forex tips, and tutorials on Udemy
#2 Keep up with the latest forex news
The forex markets are always changing, so staying on top of the latest market news is all important. Some resources go above and beyond reporting breaking news by providing in-depth insight and commentary that may enhance your ability to predict future price movement.
Trading the news? YES! The volatility is high when there are big market events. High risk, but also HIGH returns for those looking to grab some fast profits. That’s why taking a close look at how volatile markets work can help you stay on top of your game in forex trading and investing. Check out this week’s volatile forex pairs!
Where to find the most updated forex news?
These sites I have found cover everything from economics to world politics, which might be something you want to take a look at when it comes time for trading again!
- Trade the News | Their teams of analysts have been ranked by industry professionals to be among the world’s most efficient sources of actionable information in any given field, and they’re always ready with an insightful analysis that will help you make critical decisions about your business operations and long-term growth strategy.
- Benzinga Pro | Thanks to the latest and most advanced alerts, you will always stay on top of what’s important in your portfolio.
- Newsquawk | The company’s in-house analysts scour hundreds of news sources to cut through the noise and deliver only market-moving information.
You know, for me it’s an exciting morning when I wake up and check the economic calendar in forex to see what is happening. If there are a lot of currency moves that day, you’ll often find me closing my positions just so nothing unexpected happens!
If you are updated on the most recent events in the financial market, then obviously there will be so many amazing trading opportunities for a good trade.
#3 Find a good forex mentor
A Forex trading mentor should motivate and inspire you to become a better version of yourself. Besides being a professional trader, they can help beginners find the right trade setups on longer timeframes by introducing them to more advanced concepts such as support levels or Fibonacci retracement tools that tell traders where it’s best for their entry point. They also have the knowledge of risk management so you don’t end up with an open position in your account when there is too much volatility in certain markets all around the world. They may also show you their favorite trading platform, and share with you which forex broker they recommend.
I hope you’re excited because I have 7 of the most successful traders ever on this article! They are all millionaires and one is worth $100 million dollars. Now that’s success right there.
Besides being a professional trader, the best mentors are people who have walked that path before us; they know it’s an art as much as it is skill and can help find our way through any challenges we might face along the way.
The majority of them are only looking to take your money without providing valuable information in return, so it might be quite hard to find an honest educator who will teach you what it takes to become successful in trading.
It may be hard to find a good Forex mentor.
#4 Surround yourself with like-minded traders
Don’t make the mistake of trading solo! It’s up to you, but I advise getting friends that have the same interests for trading. Share your experiences and learn from those who are more experienced than you – get close with some veteran traders by keeping an eye on their every trade in real-time.
The journey to becoming a professional trader can be long and lonely; it may seem like there is no one else out there just like us (otherwise we wouldn’t need this guide).
But now, thanks to social media our community has grown larger than ever before – giving everyone access not only to new ideas and methods…but also feedback about what really works best when it comes time for action.
Join our telegram group and chat with other traders. You’ll be surprised how many trades you can learn from by just chatting!
#5 Consistency is the key in forex
Habits and results affect your consistency in forex.
What do you think? The more consistent you are with a strategy, the better off it is for long-term success! You have to stay committed by not over-trading or straying from strategies like excessive trading which builds bad habits that can lead to account destruction. Maintaining composure after every trade no matter if they’re winners or losers will help ensure good money comes rolling into your trading account instead of always going out because of inconsistent routines.
To keep your trading consistent, you need to set yourself goals and targets that are achievable. They need to be goals that are based on your real trading potential and you know you can definitely accomplish.
Consistent Trading is the key to Forex success
If you want to be successful in the forex market, then it is important that you know what’s going on and how to do it. I have created a guide for new traders here with all of my best insights and tips!
#6 Don’t use overbought and oversold indicators
The RSI can be a powerful tool to help identify when the forex pairs are in an overbought or oversold condition.
One way that traders use the Relative Strength Index (RSI) is by waiting for it to cross above 70, which signals that shares may have become too expensive and might soon decline.
An overbought and oversold indicator is a tool used by traders to monitor market momentum. A common strategy for trading forex, depending on the trader’s objective, could be buying an asset when it becomes more likely that its price will increase in value due to excessive demand from buyers (overbought) then selling if prices decrease too much as they become less attractive for investors who are concerned with risk management (oversold).
You may have heard that these overbought and oversold indicators will help you to find the right time to place a position, but it actually seldom works.
The fact is that the forex market doesn’t care about overbought and oversold indicators because the banks are in charge.
And on top of that, there’s “smart money” or the banks and the market makers who understand that everyone is looking at these overbought and overtired indicators. That’s why so often you see those don’t really do anything to tell us what future price will be like either way down here in this chart for example, but we can see from my point up here it seems pretty likely they’re going to go higher than lower anytime soon if not forever which means investing now as opposed later probably would make sense too!
The overbought and oversold indicators tell us what’s happened in the past, so you should stop using them if they’re hindering your success. Instead of looking at these lagging signals, use some other more valuable data points that are indicative of future price behavior to make trading decisions instead!
#7 Practice on a demo account
Forex trading is a thrilling and profitable way to make money. With so many opportunities out there, it’s important that you have the right weapons in your arsenal before hitting the battlefield with real money on the line.
I have covered demo accounts in detail, so you can explore them thoroughly.
In order for traders of all stripes– beginner or expert alike–to successfully navigate this complex market space, they need practice! And what better place to do just that than one designed specifically for practicing? I would advise you to test out your new trading strategies on a demo account first. Doing so will help identify whether or not it’s worth moving the strategy over to real money, which can be significantly riskier for investors who are just beginning.
Traders must be aware that execution, capital, and emotions can be different when trading real money (as opposed to fake money in a simulation)
Source: Are Demo Accounts An Indicator of Investing Skills? Investopedia
And let us not forget about our top-day trading success secret: running prospective forex trading strategies through a simulator account first. Funded with virtual money, you can identify flaws and improve your technique until it generates consistent profits.
Then once perfected…you can apply it to a live account! Almost all forex brokers offer a demo account, but please note that the leverage ratio and spread range can vary between the brokers and the different packages they offer to their clients, so pick one wisely.
#8 Trade with the trend
Forex traders, I’ve got something to help you succeed. Studies show that the vast majority of Forex traders don’t trade in accordance with a trend! The only time they tend to do this is when it’s too late and they need some stop-gaps measures because their positions are worth nothing anymore. Here’s an easy way for you to start making more money: just get on board the train while its still moving–the one called “trend.”
Working with timeframes is not difficult, but it can be overwhelming. I use a little tool called SRS Trend Pro indicator. Here I get the perfect overview of the trends on all the different timeframes. The color of the bars on this chart makes everything simple – blue means up and red equals down! If you’re trading H1 then make sure that M15 at least goes in the same direction or else your trade won’t work out as intended.
You might have heard it said that “the trend is your friend.” Well, I’m here to tell you the truth. Trends are my friends, and they’re yours too! There’s a high probability of a long-term trend when the SRS indicator is showing the same trend factor on most of the time frames.
Do you know what this means? It means that shooting yourself in the foot just became less likely than before by following trades with the SRS! The more we trade within trends as opposed to against them, then our chances go way up of making money over time rather than losing out – which would be bad news no one wants right?!
#9 Trade on the longer time frames
The scalpers may like to trade on the lower timeframes, like 1 minute, 5 minute or the 15 minute. But the reality is if you’re trading these timeframes, it’s not only stressful. Your emotions get easily involved too much in these lower timeframes. The zones are not really solid, it’s harder to find the real trends.
If you want to have a better overview of the trades, stick to the longer time frames, from 1 hour and above. This is what the “smart money” does!
I have a friend of mine that was a professional Forex bank trader for many years. He says that the banks, they really only look at the 4 hour time frames and the daily timeframe. This is where the smart money looks.
If you want to be like the smart money and unlike 95% of traders who lose their cash all the time, then only trade on higher-timeframe charts.
#10 Use one-to-one risk to reward ratio
You are likely asking yourself, “How much of my portfolio am I willing to risk on a single trade?”
As Forex traders, we are so preoccupied with finding the perfect strategy to make us money that it’s easy to forget about all of the other factors related to trading.
It is not uncommon for many traders (including myself) to have more emphasis on increasing our win rate than decreasing risk when setting up trades. But this mindset can be problematic because these high-risk setups often do not provide much in terms of asymmetric returns and profit potentials when done right!
Trades with a reward higher than risk (ratio <1:1), but less than twice (ratio >1:2) are considered too risky. It’s better to avoid a trade with the risk higher than reward (ratio >=1:1).
Money management is the cornerstone of professional trading. Source: Capital.com
The risk/reward ratio is the difference between a trade entry point to a stop loss and take profit order. If an investor has some profitable trades, but their win rate is below 50%, they will eventually lose money over time because of those unprofitable investments. This measurement helps investors understand when risking more would be worth it or not.
Your risk is calculated based on your distance from the entry to either a stop loss or take profit order.
By using a good risk reward ratio, investing with an RRR greater than 1:1 can mean the difference between going home with or without money. Remember, if your win rate is 50%, you just need to have more wins and less losses in order to trade profitably.
#11 Become a Patient forex trader
The keystone towards achieving more profitable results? Patience! Forex patience is a virtue, and it’s about time you started living up to your potential. The first step towards greater success in Forex trading starts with controlling fear when committing to trades. Once committed, don’t second guess yourself if the fx market fluctuates because very little should change your mind at that point! Always know how much money you’re willing to lose before entering into any trade; knowing this number will give you peace of mind on top of increased foresight. Next- learn every tool there is for successful Forex traders: technical analysis, fundamental analysis–everything!
You might have a lot of patience for your trades and not want to stop taking the profits as you go. While it does make sense, there is also something really good about trying to let things play out until they’ve hit their potential. If you can manage that mindset while still having all sorts of profitability in mind, then I think we’re going to be talking about some big-time money!
I know that when my trade has been doing well and looks like its reaching an end point i usually try getting ready on closing down what’s left but sometimes ive seen people do this instead: They set up 2 take profit points; one at where the trendline would normally finish off (in case it doesn’t) And another just below the trendline. They let these trades just go!
Forex trading concepts and techniques are simple and easy to learn. What’s hard is being patient, disciplined, doing the right things–making good decisions. Truthfully it will be one of the most difficult endeavors you’ll ever take on. Sitting on sidelines as markets move while waiting for your best setups means missing out profits as well.
#12 Develop your own trading strategy
Create your own forex strategy with the help of experience and find a trading style that fits you.
So you’re just starting out in the world of forex trading and want to build a strategy that suits your own personal style but also takes into account how experienced or inexperienced you are?
In forex, a trading strategy is like an algorithm that’s designed to achieve the best return by going long and short in markets. For every single trade, you need to define what assets will be traded, where entry points are (e.g., when they’re bought or sold) and how money should be managed on those trades so as not to lose everything if it doesn’t work out a plan with good rules can make one potentially profitable strategy unprofitable.
6 Rules to create a strategy and actually make money
It’s time to trade!
In order for you to maximize your potential, there are a few trading strategies that work.
- First and foremost is the stop-loss strategy which often goes unnoticed but has saved many investors from financial ruin by helping them cut losses quickly when they have lost more than 20% of their portfolio value in 30 days or less (which can happen during tumultuous market swings).
- Second on our list would be pivot points – these help traders figure out low risk targets with high reward gains so it becomes easier to make money even if one doesn’t always know where prices will go next.
- Third we recommend using various indicators like MACD & RSI signals as well as support resistance levels because these let us identify momentum shifts.
Most popular trading strategies
I would like to talk about some different types of analysis used in the currency market and how they differ. Here are some of the most popular trading strategies:
- News trading strategy: News traders need to keep up-to-date with the news that moves the forex market. Fortunately, all upcoming economic data and events can be found in our Forex Economic Calendar! They are especially busy during crucial moments like FOMC meetings or any other big announcements such as Non – Farm Payrolls (NFP).
- Fundamental analysis: Focuses more heavily on economic events such as changes in interest rates or shifts in inflation due to their impact over time – rather than looking at current conditions only. Fundamental traders use a variety of research tools including news reports, company earnings statements, etc., because these are important factors for determining long term investment strategies
- Technical analysis strategy: Forex traders can develop strategies based on various technical analysis tools including market trend, volume, range, support, and resistance levels. This strategy studies past performance as well as charts and graphs that predict future trends. They conduct a multiple timeframe analysis using different time-frame charts to find the best trading opportunities.
- Swing trading strategy: Swing trading gives you the opportunity to make a lot of money in short bursts and there’s never any time commitment. If an investor is looking for quick trades, swing trading might be their best bet! Swing traders try to identify when swings are happening within a medium-term trend and enter only when they have high chances of identifying successful trade bets.
- Day trading strategy: Day trading is another short-term style of day trading, but unlike scalping you are typically only taking one trade a day and closing it out when the session closes.
- Trend trading strategy: When you see a strong trend in the markets, trade it. Trend trading is easy with this simple forex strategy that can be used by traders of all levels of experience, and yields positive returns through directional momentum!
- Scalping trading strategy: Forex scalping is a trading strategy that focuses on achieving small winnings from currency fluctuations. This type of trade usually takes place for 1 to 15 minutes, and FX scalping typically doesn’t aim for massive payouts – most trades close positions after gaining 5-20 pips.
- Break-out: You know what’s great about breakouts? You can make a ton of money when the price makes it through! It doesn’t matter if you’re buying or selling, just send your orders in and always go for that breakout. A good strategy is to identify an area where there has been strong momentum in either direction over a period of time (such as at high prices), then wait until the market reaches this level before initiating trades.
The most exciting forex strategies are the ones you can learn right now.
What kind of trader are you?
I must be honest with you here: Building an effective strategy is hard work. For starters, it requires thinking about what type of trader you think of yourself as which can include aggressive traders who like riskier trades such as scalping high-speed movements for short periods of time on highly volatile currency pairs.
Take my quiz here to find out what kind of trader you are!
More conservative investors who would rather take their chances by waiting around patiently until they find investments where there’s less volatility so that they have better odds at making successful long term profits; or trend following traders…
Creating a forex strategy is seldom easy, but it can be worth your time. You’ll just need some experience and experimentation with different approaches in order for everything to work out.
If you want to copy other traders, it’s important that they suit your own personality. You’re not going to be successful copying a trader who can’t satisfy the desires of their followers! Take my quiz to find a copy trader that works for you!
Get a forex system to work with your very own tweaks!
Forex traders need to develop their own trading system that works for them. These systems or expert advisors are based on algorithms and market signals, so they’re easy enough to use – you just tweak it until the results work best! Here are 2 EAs I’m using myself:
Best forex trading system?
I am excited to share this with you! The SE Trading System is the first ever “High Profit” system that’s been created by SE. It analyzes market situations and notifies traders when a BUY or SELL zone has emerged.
With these powerful tools, it displays entry points as well as exit points which enables them to enter safely into their positions for maximum profit output!
SE Trades on all currency pairs, indices, CFDs through MT4 platform. Check out SE Trading X.
I am so glad I made the right decision. The elite signals literally changed my life on the first week with their amazing performance.One of the customer reviews on SE Trading X.
#13 Focus on the potential for growth
My personal forex trading strategy is to focus on the potential for growth and not so much on trying to catch tops and bottoms.
Don’t be a blind trader and take the top or bottom of a graph for granted. Forex is not like other markets with cycles that have repeating patterns, it’s more dynamic so you’ll need to readjust your strategy as quickly as possible when things go wrong. If you’re following the risk-to-reward ratio that I mentioned above, then there should be no fear of reaching either the bottom or top because we’ve already calculated how much damage can happen before taking action in case these events do occur!
Ask yourself what are the only top 3 things you need to do daily to move closer to your goals, and then do them consistently. Only if you take a full-responsibility and focus on your forex trading success you can achieve it.
#14 Make a trading plan
I’ve seen too many traders just focus on quantity, not quality. They forget to sit down and look at why they are going wrong in their trades. That is why one of the most important things you can do when trading forex is to keep a trading journal. But don’t think it needs to be manual and slow like it used to be.
The forex markets are always changing. You need to be able to adjust your trades as it goes on or you will lose money and never learn from mistakes. The best way for this is with an online trading plan app that keeps a detailed record of the previous trade, including entry & exit points, data of the trade, time open/close position size, and profit/loss!
TradeBench is a free online trading journal that will help you plan your trades, journal the results of each trade and learn from them. As an added benefit, Tradebench can be used to share your experiences with other traders so they can offer feedback based on their own experience in order to mitigate risk and earn more money as well! Check out TradeBench’s trading plan solution here.
#15 Winning is not everything in Forex
The last forex trading tips I will share with you today is to focusing only on winning in forex. Forex trading is a game of highs and lows. You can’t walk away from losses, but you have to take them in stride if you want any hope of turning this into something profitable. Accept your failures as part of the process so that they don’t hold you back!
Forex “winning” isn’t everything – it’s all about learning how to accept failure with humility and work towards building skills through patience rather than obsessing over an unrealistic goal like having a high winning percentage or not losing money on trades altogether.
Forex trading tips summarized
I know that the forex market can seem like an intimidating place for any new forex trader. I’ve been there too, and it’s a struggle to figure out how best to use your money in order to be profitable trading Forex! In this article you will find my 15 secrets on what helped me make consistent winners when trading forex online.
Remember, there’s always a risk of losing money in fx trading, and you should always read our disclaimers.
Most retail investor accounts lose money
The vast majority of retail investor accounts lose money when trading CFDs. You should consider
A) Don’t trade on margin, B) only use a small amount of your funds for these trades, or C) never do this with retirement savings?
C). Never invest in anything that you can’t afford to fully lose!
I have provided you with my 15 best tips that if you apply them in your own trades; it will help get closer towards being one of those 10%ers who win consistently during their time playing the game we call forex trading!
FAQ Trading Tips
Can you get rich by trading forex?
Trading forex can be a very lucrative way to make money. While the majority of people will never become millionaires trading, you still have an opportunity if your strategy is up for it. Even though some traders lose funds occasionally, they are able to recover in time and eventually turn their fortune around with hard work and dedication!
How can I get better at forex trading?
I hope this article have given you 15 very helpful forex tips that can improve your forex trading. Before you start trading, it’s important to have a clear idea of your destination and how you’ll get there. Consequently, we need to ask ourselves what our goals are first before determining the best way for us trade them profitably. Each style has its own risk profile which requires different risk management strategies in place – but if we know where we’re going then that won’t be an issue!
Can I trade forex with $100?
Yes, you can create a cent account, and 100 dollars will count as 10000 cents. That will give you more space – even without having a big start capital. Check if your broker offers a cent account. I recommend to begin trading on a demo account before you trade with real money.
Is forex good for beginners?
Forex trading can be a really exciting way to make money. You could have some great opportunities, and it’s easy for beginners because there are so many teaching programs out there that teach you how to do everything! But even if things go well at first, don’t get too excited about the ‘easy’ part or lose sight of the big picture: There will always be ups and downs ahead. It is very important not only for your financial education but also emotional control as all traders need in order to succeed long term.
How do I succeed in forex trading?
Hopefully this article helps you to succeed in forex. I have put together 15 tips that I would have needed myself when i started to trade. I would recommend you to surround yourself with likeminded people. Get inspiration from other traders. Find a mentor that can give you all the education and motivation that you will need.
Can I teach myself to trade forex?
Yes, but you will learn faster if you surround yourself by traders with experience to share. As you may learn over time, nothing beats experience and if you want to start forex trading the best thing for beginners is a demo account. First opening a dry-run trade that will help get your feet wet before getting into real trades. Forex education can be done by reading about it or from an experienced trader who has opened up their own practice trying out different strategies in order to find which one works well on what market conditions.
What trading platforms do forex traders use?
You can choose among the following trading platforms for fx trading:
Metatrader 4 (MT4) is fast becoming the standard for trading platforms among traders. Automated trading through these platforms can remove the emotional and psychological factors from a trader’s strategy.
MetaTrader 5 offers you a ton of opportunities! From trading Forex, stocks and futures to using algorithmic applications (trading robots) or copy-trading. You’ll be in control every step of the way with its superior tools for price analysis that keep it all clear as day.
cTrader has been one of my favorite trading platforms for years, and it’s great to see that they’ve taken care of all the fuss people have over newer devices. I know other brokers are catching up so cTrader is at risk but I just can’t bring myself to switch!
So you’re looking for a trading platform that will let you trade across multiple devices, operating systems and brokers? Well then have I got the perfect solution! cTrader is tailor-made to meet your needs. It’s available with FxPro or IC Markets as well so pick whichever one suits all of your requirements best.