One of the main reasons of losing the deposit is wrong attitude to trading on the currency market. In addition to methods of analysis and the use of various tools, you need to remember the basic rules of forex trading.
Trading is a business, not a game.
You can’t be successful in trading if you take a reverse position. Compare how many successful businessmen and gamblers you know.
How to turn a hobby and entertainment into a business
- Set up a workspace. You can work from anywhere you want. But that doesn’t mean you can watch movies or shows while you work. Trading should stand apart from your personal business. Create a workspace where you can get things done without the distractions of the outside world.
- Strategy is your business plan. Decide what strategy to work with and become a master at it. In your business plan, “write” a discipline clause and never break it.
- Allocate time for market analysis. 15 to 60 minutes a day is enough. During this time, do only analysis. Do not open deals and do not be distracted by other things.
- Control your emotions. A businessman can’t afford extra emotions at an important meeting. You are a businessman, and instead of partners, the schedule similarly prefers calm.
- Manage your capital. Business does not forgive waste. Enter the market if you see sets that match your personal strategy.
- A trader’s first rule for successful forex trading is to become a businessman, and having fun is a serious business that generates income.
Develop your skills before you make real trades.
- Almost every broker offers a demo account. Take advantage of it until you start working steadily in the black. Reading a few articles and 3 days of practice on the demo is not enough to get the hang of the market.
- Develop a trading strategy, make a plan, keep a diary. It may take you 2-3 months – after that you will be able to trade in the plus on the real account.
Don’t Spend Too Much Time in Analysis
- The main misconception of the beginner speculator – more information, more accurate trading. You will search for more analytics, news, longer analysis of charts. This is almost always useless.
- Professionals work perfectly with their strategy, so they have enough allotted an hour a day to find the entry point.
- If there are no sets on the market that match your trading system, don’t look for others. Stay out of the market. Searching for extra opportunities will confuse you.
Don’t trust the indicators 100%
- Technical indicators can help you assess the market situation. But – it is only a mathematical algorithm, not capable of giving accurate predictions all the time.
- Most professional speculators use a minimal set of technical indicators or do without them. After trying to find the Grail in the form of an indicator, they use Price Action strategies.
- Beginners can use indicators, but to a reasonable extent. Otherwise, the analysis will become more complicated and the results and understanding of the market will deteriorate.
Trade like a woman
The New York Times compared the ways men and women trade. The top 3 conclusions:
- Men think they know everything about the market. Women accept the fact, ignorance – they open less intuitive and unlikely trades.
- Men are more obsessed with the news. Fundamentals do not play a key role in currency market transactions. It is enough to keep track of important indicators and rely on chart readings.
- Men need to be “right” – entails frequent mistakes in work.
Trust yourself, not robots and advisors
- Algotraders are speculators who use bots to trade. The method can bring profit. But to create a robot, you need to know how to trade. By entrusting an account to a purchased bot, there is a high probability of losing your deposit.
- The market is constantly changing and the bot is incapable of adapting to the changes. That’s why the efficiency of personal trading is higher over the long term.
Listen to yourself, not to others
The golden rule of a successful trader – listen to the opinion of experts, but don’t follow them all the time. All deals should be based on your own personal decision – don’t shift the responsibility to others, which encourages you to analyze the market better.
Become a disciplined trader
- To keep your trading mindset, you need to become a disciplined speculator. A trader’s diary can help keep your discipline – write down every trade.
- In addition to being organized, a journal allows you to improve your trading efficiency.
Set realistic goals
In order to continuously progress, you need to make short- and long-term goals. There is no problem with the latter. Everyone wants to become a professional once they get started. Short-term goals are almost never set by beginners. Without them, achieving global objectives is impossible.
An example of a short-term goal is a month of trading without money management violations. It is important that the objectives are achievable.
Do not work if you are confused or tired.
- Having a strategy does not guarantee a stable profit. If the TS fails or you are confused, take a break. Turn off the terminal and attend to your personal business. If you continue trading, you risk losing more and getting emotionally burned out.
- Take a rest every time you feel exhausted, even if trading is going well.
Don’t expect profits from every trade.
- A common mistake beginners make is to want to make money at the close of every order. The simple rule of forex trading is that it does not work that way. You can close most trades at a loss, but still make money.
- Be prepared to lose money and don’t worry about it. You can be confident in the trading signal, but predicting the market with 100% accuracy is impossible.
- Observe the rules of capital management, so as not to get nervous about every unsuccessful order.
- Consider losses as a positive thing. Analyzing each failure will not allow any more in the future.
Work as a sniper, not a machine gunner
- Scalpers are traders who open trades for a few minutes or seconds. Fast profits are real. But there is a rule of forex trading – do not open short-term contracts without experience.
The best option to start is to work on daily charts. 3 trades a month can bring no less profit than 30 contracts for two reasons:
- the profits are higher on higher timeframes;
- it is possible to invest more money in one trade.
In addition, “sniper” trading saves time and nerves of the speculator.
Listed rules of trading on Forex are recommended for every beginner trader. Having mastered them, you’ll stop making mistakes and approach the work with confidence and understanding of the actions.