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In the following discussion we will provide some forex currency trading tips to help you become a more successful trader. These tips are not only meant for newbie traders – experienced traders should also benefit from them. It’s after all never possible to know everything about the forex trading market.
The first and most important tip is that you should learn to control your emotions. A trade should never be entered into because you have a ‘gut feel’ it’s going to work. It should also never be exited or clung to because of fear or greed. This is why you should have a written trading plan and stick to the rules of that plan whatever you feel is going to happen.
Secondly, remember that knowledge is power. You can never have enough knowledge about the forex market and the factors influencing it. Keep on reading, talk to other traders, join discussion forums and study the blogs of successful traders.
A stop loss that is too tight is probably one of the biggest reasons novice traders lose money. If you don’t allow the market time to ‘breathe’, to go about its normal ups and downs before going into a certain direction, you will keep on making small losses. A stop loss is important, but be realistic and set it wide enough.
More forex currency trading tips: A mistake many traders, even experienced ones, often make is to overtrade. If you have too many trades open at the same time, you can’t concentrate properly on all of them. Making too many trades in a single day will most of the time result in numerous small losses or even smaller profits, and you will miss all the big action.
Margin trading enables the forex trader to trade in much larger amounts than what he actually has in his trading account. This is a double-edged sword, however. A 1% movement in the right direction could double your trading funds. A 1% movement against you could wipe out your account. This is why a novice trader should gradually increase his leverage over time, don’t start off with high margin trading.
A final word of warning: rather don’t trade when the forex market is quiet. This is not when things are happening. As a non-institutional trader, you will much more likely make money when the market really gets going after about 10h00 CET. Watch out for price breakouts – this way you can catch the big moves with which you will make serious money. We can provide thousands of other forex currency trading tips, but these ones highlight some of the most common pitfalls and opportunities the market presents.
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