If there’s one thing both experienced and beginning traders can agree on, it’s that it surely takes a lot of patience, intelligence and perseverance to succeed in Forex trading. A lot of people enter this market with unrealistic expectations, though, anticipating an overnight success. However, the best traders take an altogether different approach: their priorities are to enhance their knowledge, hone their trading skills and fine-tune their analytics and methodology.
To get a better grip on this ever-changing market, embrace this practical advice from the field, which would help you lay the groundwork for your success with Forex.
1. Pick your broker carefully
The importance of signing up with a knowledgeable broker can’t be stressed enough. It really does pay off to spend your time researching your options and delve deep into the specifics of each offering. Choosing your broker might often feel like an uphill struggle, so it would be a good strategy to go through all reviews and feedback you can get hold of.
A reputable broker not only provides a vast array of trading services, it also acts as an ultimate learning center and educational resource for its clients. Today’s trading market has a few of brokers offering inclusive services, with Larson&Holz being one of the most notable brokerages. Launched in 2004, this award-winning firm is based in Hong Kong and enjoys a global reach. Its website is available in fourteen languages, making it easy to get started for varied audiences. L&H’s training center offers an impressive selection of educational resources focusing on:
- Forex trading;
- market analysis;
- trading psychology;
- trading strategies;
- technical indicators;
- Forex, stocks and CFD e-books;
These extensive guides offer granular insights into Forex investing tips and potential strategies that every trader will find extremely helpful.
What are the advantages of Larson&Holz?
Larson&Holz has an official license to operate on the territory of Russian Federation. Therefore, you can safely trust him your money and cooperate in the trading process. Larson&Holz specializes mainly in the Forex market, but professional accounts also offer trading of contracts, futures, stocks and other securities. Still, currency pairs is a main specialization in trading.
You can receive basic training or advice free of charge in the office of Larson&Holz. Training courses are held only on working days.
As you can see, there are many advantages of cooperating with Larson&Holz. Yet another interesting advantage is that this broker offers an attractive partner program.
2. Have a trading goal and an actionable plan to achieve it
Everyone joins Forex trading with a goal to make profits and get rich, but this is quite a vague goal in itself. What you need to do is to break down your goal into doable chunks, for example determine how much money you want to earn every month of trading. Based on your personality and risk approach, you will then define the best trading methodology, strategies and tactics that will work together to reach your goal.
Personality and psychology are crucial when setting up your Forex trading goals. Signing up with something you just can’t stomach will result in loads of stress and, potentially, a failure. If you like to see progress every day, however small it may be, day trading might be the option to consider. If you hold significant funds and like to strategize, you might be better off by sticking to position trading.
Think carefully before committing yourself to any specific course of action. Switching to another trading plan and methodology will most likely require a completely different skill set which you might not have time to acquire.
3. Pick the right account
Once you have chosen your perfect broker, the next step is to select the right type of a trading account. Typically, brokers offer a wide range of accounts for beginners and pros alike, so it might be frustrating to figure out which option is right for you. For beginning traders, a good rule of thumb is to stick with low leverage, then upgrade to standard accounts, once you have acquired a solid understanding of the mechanics of this complex market.
Once again, the importance of training can’t be stressed enough. Go through as many useful resources as you can before making decisions that can break your budget. Sticking with low leverage accounts when you’re only starting boosts your chances to make a profit, because the lower the risks, the higher the probability of winning.
4. Start small
It might be tempting to rely on beginner’s luck and start trading with a large sum of money, but that’s about the worst decision you can make. Be conservative and extra careful and only start with a small amount.
Only when you start making profits organically, you can start increasing your trading amounts bit by bit. Keep in mind that there is absolutely no guarantee that larger trading volumes in your account always suggest greater profits. As well as that, no previous performance is indicative of future results.
In all cases, the golden rule is to grow your account by making the right trading decisions, not by channeling money recklessly through it in the hope it would work out.
5. Start with one currency pair, add more as you learn
Experienced brokers make massive profits by working with multiple currencies, but this requires a deliberate and in-depth knowledge of financial activity and foreign exchange risks in Forex market. For a less experienced trader, the best Forex investing tip is to stick with one currency pair.
For example, you can choose to work with your national currency, or the most popular trading pairs which are known to be liquid. Either way, stick to the trading pair you understand and feel confident you can master. Given the chaotic nature of trading markets, choosing to work with multiple currencies will increase uncertainty and make your analysis even more complicated, although it would be fair to say that it can deliver huge profits if you’ve got it right.
6. Automate as much as you can
Every trader is subject to a wide range of emotions which often stand in the way of making the right decision. Fear, greed or excitement cloud your judgment. Only a cool head and a rational reasoning can ensure that your trading choice is not divorced from reality. For this reason, traders should strive to automate as many trading activities as possible.
This is not to say that you should use Forex robots. The idea is to stick to the same choices in similar situations which have already paid off in the past. When the context is similar, chances are you will win by making the similar decision, even though this time you might be distracted by emotions. Understand the context and try to take your emotions out of the equation.