Forex trading can be extremely rewarding once you know the ropes, but when you are just starting out, there is a lot to learn and it is difficult to filter out all the noise. In this quick article we will share with you a few tips to help you improve your trading and achieve forex trading success.
Does your forex trading strategy really require all that leverage?
With so much leverage available in the forex markets, it is very easy to get carried away and go all out with 500:1 leverage. Do you really need that much leverage though? The thing with setting up your account with maximum leverage is you will be tempted to use it. If you are just starting out and trading longer timeframes, you really shouldn’t need any more than 50:1 leverage.
Keep a journal and analyze your forex trading
If you aren’t keeping track of where you need to improve, how are you ever going to improve? The best traders record each and every trade so they can look back at the end of the week and work out what they could have done differently and where they did well. Lots of traders report their trading improves very quickly once they start keeping a journal and analyzing their performance.
You can also export your trading results from MT4 or use the myfxbook analytical suite to analyze and improve your forex trading.
Fight your forex trading FOMO, wait and pounce
FOMO (fear of missing out) is something a lot of new traders battle with. There is always another opportunity and the sooner you learn that the better. Wait for the perfect setup, stalk your prey and then pounce. A good entry means you can limit your risk and increase your position size and waiting for high probability set ups allows you to do this with confidence.
A pip in the hand is better than two in the bush
One of the worst things that will happen to you on your forex trading journey is watching a winning trade turn into a loser. There are so many things you could have done in between to prevent the loss. Breakeven stops, trailing stops and partial closes are great ways of ensuring a winning trade never turns into a loss. Which method you choose will largely depend on your personal risk tolerance, trading strategy and the timeframes and times of day you trade. If you are day trading, you should be taking all your profits off the table before you finish the day.
Why not take that 75 pips and finish the day early? Beats waiting with your eyes glued to your terminal for another 5 hours over an extra 20 pips!
In it for the long haul?
Are you in it for the long haul? Or just another one of those statistics who quits a loser? Continue to learn about markets, analyze markets and work on your trading process and you are bound to be successful … just don’t give up!
Source: Vantage FX Blog