Forex Trading is the biggest market in the world in terms of activity. A mammoth $6 Trillion is traded each day. With the amount of volume traded comes great opportunity.
We’ve run through some of the ‘do’s’ and ‘don’ts’ in forex trading which will help you, as a trader, be more successful by following a few simple rules.
DO HAVE A TRADING PLAN
It is massively important to have a game plan and hence why it makes it to the top of the list for this piece. Traders need some sort of clear goal and objective when entering a market. Forex trading is considered an aggressive marketplace so having a plan is pivotal to success.
Remember that without a plan, you are not trading, you are gambling. Don’t be a gambler – have a plan!
DO YOUR OWN RESEARCH
Knowledge is power so make sure you are doing some reading of current market trends and political situations that might affect a particular countries currency. Politics is a good place to start when looking at how a currency may fluctuate as well as other factors such as war and natural disasters.
DO BE PATIENT!
Patience is a virtue and a vital ingredient when looking towards trading successfully. Being patient helps to keep any impulsive behavior patterns at bay.
DON’T OVER-COMPLICATE STRATEGY
We know that having a strategy is crucial to trading success. Having a clear outlay of objectives helps maintain discipline but try and keep things simple. Having too much to think about may serve to cloud judgment.
DON’T LET YOUR EMOTIONS TAKE OVER
Human beings are extremely emotional and even more so when under stress. Stress can be magnified when money is involved!
The big 2 emotions traders will experience at some point or other are:
Greed, one of the 7 deadly sins and a particularly dangerous attribute to have when trading. Greed makes humans behave differently and without clarity. It is a feeling of want rather than need.
Fear can leave traders feeling like deer in the headlights and debilitate us – resulting in a fight or flight scenario.
DON’T TRADE THE MONEY YOU CAN’T AFFORD TO LOSE!
This goes without saying, only invest capital that you can afford to lose!
Trading should be taken seriously. With the right blend of analysis and research, trading Forex can be a profitable side earner.
Don’t turn trading into gambling and stay within budget parameters.
This article was submitted by EagleFX.