10 Essential Tips For Novice Traders
- If you are new to forex trading you know that 90% of traders lose their money quickly, so you need some tips on how to join the 10% that make big consistent profits.
- Here are 10 essential tips to increase your chances of making big profits from forex trading.
- You need to rely on yourself
- Many novice traders think they can buy success.
- If you think you can buy success from someone else for $100 or so, you are mistaken.
- Think about it - If you could a lot more traders would win than do!
- Rely on yourself, do your own research and homework and come up with a system that you are confident you can make money with.
- Avoid day trading
- Day trading is popular, but the fact is it doesn't make money, as it's based upon flawed logic.
- You cannot predict volatility in short time periods so don't try.
- Do it and you will lose.
- If you don't believe me then ask any day trader for a track record of real profits and you won't get one.
- Get a method your confident in
- This means a simple method and for novice traders one which is based upon technical analysis.
- A simple method will be easy to understand and more importantly, it's a fact that simple methods work better than more complicated methods.
- Why?
- Quite simply, their less likely to break in the face of brutal market conditions.
- Just a few indicators you understand and are confident in. are all you need
- If you want a methodology to base your method on:
- Base it on "breakouts", most of the world's top systems are based upon this methodology and you should consider it.
- Discipline
- If you have a method you must execute the signals with discipline.
- As you will have devised the method yourself and it will be simple to understand, you will be able to acquire discipline.
- Keep in mind, if you can't execute a method with discipline you don't have a method at all!
- If you are using a technical method don't be tempted to listen to the news.
- Why?
- Because you will hear lots of convincing stories that are probably wrong.
- Remember, that experts in the media tell good stories but their more often than not wrong.
- It's a fact that:
- Important market tops form on very bullish news and market bottoms form on bearish news - SO ignore it!
- Money management
- This is a major problem for most novice traders.
- You need to protect what you have and run longer term trends.
- You must take a risk!
- Don't be tempted to place your stops to close and MOVE them to quickly - you will be stopped out continually.
- Most novice traders try to restrict risk, but actually end up creating it by ensuring they will be stopped out.
- Have realistic aims
- Most traders think trading is easy but of course it isn't.
- If you consider that the top traders in the world make 50 - 100% per annum then you will see that getting rich over night is not an option.
- You need to set realistic objectives and be patient.
- Work smart not hard
- You don't need to work all hours of the day, or acquire vast amounts of knowledge.
- Once you have a method you are happy with, your trading should take less than an hour a day.
- There is no reward for how much effort you put in.
- You only get rewarded for getting market direction right.
- Forex trading looks easy
- But, if it was easy, 90% of people would not lose there money quickly.
- Be humble and accept that the market is all powerful and you need to work smart to make money.
- Patience
- Many novice traders think that they need to trade all the time in case they miss a move, but this is a recipe for loses.
- You need to be patient and wait for the right opportunities to come along.
- Perseverance
- If you are in a losing run (and don't worry this will happen) you need to persevere and maintain your discipline.
- Wait for the losing run to end and keep your emotions in check.
- TO be successful at forex trading you need to work smart and acquire the right knowledge and then apply it with discipline.
- If you can do the above forex trading can build you serious wealth over the longer term
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