Any trader wants to find a universal key of success in trading on the Forex market. But this secret is quite simple. Forex is not a game for luck. Trading on the currency market requires from the trader a serious approach and maximum reliance. Success depends on several components
So, it`s not only about novice traders trying to absorb as many tips as possible. Even experienced traders are often in search of the cherished Grail, which will tell them about all the secrets of trading in Forex, will allow to earn fabulous money in the shortest possible time and guarantee constant profits.
In fact, there are a lot of very important moments, when you learn about them, you can really lead your trading to a break-even process with the least risks. Some of this knowledge refers to managing your capital, and the other part refers to practice or behavior on the foreign exchange market. Let's talk about these secrets to Forex trading.
Many Traders Fail to Achieve Profit
While some traders are happy to reap their profits, sadly most people lose their money.
There are also people who think that it is easy to make money in the foreign exchange market, which unfortunately is not the case. To become successful in foreign exchange trading, you need to spend time studying the market, trading systems and trading strategies. Without proper knowledge, your risk of losing money increases drastically, as well as your self-confidence and desire to take up something absolutely different from your daily routine.
The reason for losing money in Forex can be simple ignorance of the basic fundamentals of trading. But the profession of a trader requires quite specific knowledge and skills. It is mandatory for a Forex trader to know the basics of technical and fundamental analysis, as well as the basics of money management. Equally important is the trading experience, which can be gained by trading on a virtual demo account.
Commitment to small accounts is one of the main reasons why novice traders lose money. Even if your intellectual abilities allow you to predict and analyze market movements, a trading account that is too small will not allow you to apply this knowledge into real trading. You have probably heard of traders who have turned $250 into $1,250,000 in 12 months. Perhaps, you feel that you are capable of the same feat. This can lead to excessive pressure on your small account, as a result of which you will lose all your money in a few days. The result is not determined by the market, but by our behavior and our actions. It is therefore advisable to start working in a small trading account, but to trade in small positions.
Choosing the right broker is one of the key issues for every trader who wants to trade successfully on the Forex market. This is a responsible procedure, which requires considerable knowledge and skills from a trader.
A broker is your reliable companion, an assistant on the securities market, his professionalism greatly influences the result of your trading. You choose a broker based on your goals, strategy, opportunities and requests.
Of course, there are a lot of brokers on the stock market now and it`s pretty challenging to pick the best one. They trade on different markets and platforms, provide a wide range of services, have capital and "leverage". How to choose the right broker for yourself in all this variety? Here are 5 steps to choose the right broker for you on the stock market.
- Presented tools
- Minimum deposit
- Customer relations and information support
Be sure to search for the most reputable brands, and then check their testimonials, scrutinize their social proof, and check the reviews and opinions of their previous clients. Be sure to get in touch with some of them via social media, and don’t just trust the reviews on the broker’s website, but check for honest reviews on specialized forums and even social media groups.
The choice of a brokerage company is the most crucial step each trader takes deciding to trade on Forex since it predefines the whole traders` career. If not taken seriously, all the following aspects will be compromised.
Dealing Desks May Be Deadly For You
At first glance, it is almost impossible to distinguish a Forex broker from a dealing desk: the same terminology, the same platforms, charts and analysis tools. In the same way they charge a commission (spread) for each position you open. Obviously, they have more similarities than differences.
But they do have differences. The main difference between them is that the Forex dealing desk cannot give traders access to the interbank market, namely where the global buying and selling of currencies takes place. In case of dealing desks, the whole trade takes place within the company, therefore, the profit is paid to the traders either due to the fact that other traders suffer losses or from the pocket of the company itself.
One more important circumstance is that Forex dealing desks form quotations themselves. This allows those of them, who are dirty, to carry out various manipulations. If we compare quotes of several dealing desks, they usually differ by two or five points as they are formed by each dealing desk from its own sources. However, even if there are common sources, the final quotes flow to the terminal will be different for each dealing desk, and the quotes formation principle is usually not disclosed.
Do Not Trust Signal Providers
It is important to choose only the service that a trader can trust. Reliability of the provider is very important - on the modern currency market there are a lot of scammers, and a trader, coming across any of the, will not only be disappointed in Forex trading signals but also lose his money. It is also important to remember that trading signals, as a rule, cannot be 100% correct. The result, to which a trader should aspire, is the prevalence of profitable trades over losing ones.
The important factor is not only the number of signals and their frequency but also the accompanying data about them.
It is convenient if a provider of trading signals Forex gives traders some additional information about the origin of the signals and gives analytics - what the specific signal was based on.
The package of provided services and their cost. Among the providers of Forex trading signals, you can find those who give signals absolutely free (but can do it rarely, the signals will be of poor quality), and those who offer a paid package of services (but prescribe the number of signals and provide additional information).
Beware of scams when all you have to do is pay for the signals and receive SMS. Questions may always arise and it is often very important to get answers in time.
Be careful when searching for a trusted forex signal provider. Do not trust services without independent external statistics, secretive authors who do not show their face or, conversely, praise themselves, showing many screenshots of successful positions with huge profits and a lot of extremely positive feedback from (fake) users.
To maintain security, it is best not to trust projects that have been in existence for a short time (a month or two). Focus on those vendors that have been on the Forex financial market for at least a couple of years (in fact, the longer the better). If you do not have enough time to work with a project you like - wait for some time, watch how it will develop, do not take unnecessary risks.
Never start working with providers of Forex trading signals that harass you, ignore questions or reply to messages for too long. Clients should be the most important priority for your service provider, and if you are already getting acquainted with them, most likely, nothing good will come out of such cooperation.
Don't rush to trade. The market will exist tomorrow, next week, next year and next decade. Don't worry about the fact that as long as you trade on a demo account with no real money, you may miss a once-in-a-lifetime movement. There will always be opportunities - you don't lose anything by investing your time in education and training.
Do not trade without a reason. When you finally start trading, do not trade just because you feel you have to, just because you are bored. Risk your money only when you see evidence of an opportunity to trade and a trading plan with which to take advantage of that opportunity.
If something seems too good to be true, it probably is. Be it a trading system, "correct" information or an indicator, anything that promises a lot of money and/or almost no risk should be avoided. There are no shortcuts in trading - it is a complex business, which many highly educated and successful professionals from other fields can`t handle. Be a skeptic. Find proof of every trading idea, including those that you come up with yourself.
Keep a log of trades and regularly review the results of your work. Regardless of their past or approach - investment, short-term trading, technical, quantitative or fundamental analysis - virtually all good traders agree that it is extremely useful to keep a log of all your trades and learn from experience.
Be patient. In any case, trading on financial markets is not as easy as it may seem at first. It takes time to master any discipline or profession. Can you expect to be a good musician, doctor or engineer in one single year? In addition to your natural period of study, trading is also a profession - unlike music, medicine or law - in which you can lose money on any given day rather than making it. "Salary" is not guaranteed here. Success is hard work. Some traders have been working without profit for years before finally getting back on their feet. Remember that the markets will not run away from you anywhere.
Have enough capital. Lack of enough money to trade puts into question every second point in this list.
Also, when you start trading, make it even more conservative at the capital level than your projected minimum. For example, if you have determined that you have enough money in your trading account to pursue a particular trading strategy using lots of 500 shares below $30 in trades, try to start trading with 100 or even 50 shares at a time until you are comfortable with your strategy, the execution process, the brokerage firm and the psychological challenges associated with real money risk. Then slowly increase the size of your trades.
The Forex market is a convenient environment for everyone looking to build financial security and even affluence down the line, however, you need to come combat-ready.
Analyzing the activity of successful traders, we can note that there are no supernatural Forex trading secrets in their work - everything is built on a clear calculation and discipline. These are professionals who devote a lot of time to self-education, gaining experience and studying the market.
Consequently, the main secret of trading Forex is that they dedicate their time, are not afraid to learn and practice, as well as use effective and develop new trading strategies. The search for the panacea is doomed to failure. Therefore, it is necessary to look for advice online, to understand the nuances and to read lifehacks in trading. At the same time, you should avoid offers to get rich instantly. Trading platforms offer a wide range of tools to help everyone make the right predictions, and the rules of forex trading allow you to stay dynamic all the time.
Apply these "tips" to prepare for the challenges advancing, and enter the market with a winning strategy in your pocket.
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