Tips for Forex traders to become successful and profitable
Are you new to the Forex market? Before getting started, read some tips from professional traders.
- Forex Market’s Daily Turnover is over Trillion Dollars
- Why 80 to 90% of traders lose their money?
- Tips to become a profitable Forex trader
- Tips for beginners from professional Forex traders
- How much return can you expect as a novice trader?
- Do I need any special training before trading Forex?
Forex Market’s Daily Turnover is over Trillion Dollars
We want to open one of the most important questions that you have.
How is it right to trade in the market Forex?
This issue is of concern, as well as novice and experienced traders who have long appreciated the advantages of this, truly unlimited, market opportunities.
There is a prejudice that Forex is a dangerous game, but in fact, as with any business, there are accepted system of calculation and analysis, allowing traders to increase the well-being of tens of thousands times.
According to statistics, the daily turnover on the Forex market are: – In 2000, $ 1.5 trillion – In 2005-2006 the volume of daily turnover on the Forex market fluctuated, according to various estimates, from 2 to 4.5 trillion dollars – In 2010, 4 trillion dollars. In this case, a further increase in turnover to an intraday 10 trillion dollars in 2020.
Forex today is a powerful attractive financial market, and the above figures speak for themselves.
However, when the broker did his first loss as well, unimpressed and begins to make a hasty rates, which lead to another one loss.
As a result, a person stops the activity in this market, and not having understood in its specificity.
To assess the merits of Forex, take some amount of time.
You have to exert a little effort to achieve the desired outcome and the long-awaited results.
Why 80 to 90% of traders lose their money?
Here are examples of unsuccessful traders in the Forex market, that many of you can be qualified unfortunately.
- The vast majority of unsuccessful traders do not have a definite plan! They do not know what they want from the position, do not know why they enter and why the position is closed. Even if they have a plan, they do not keep to it after the position is set.
- Usually they close profitable positions too early and keep bad ones for too long. Often, phenomenal open positions are closed in fear with minimal profit in just a few minutes before a big movement in the market.
- After several successful positions, they forget about risk management and start trading based on “anticipation”, not a sound strategy;
Traders are trading too big lots or too often for the size of their account.
- Many try to “trade against the market”, are engaged in scalping. Even if at the first stage they are successful, sooner or later, this trading strategy leads to failure of their account.
- Many trade without predefined risk, do not use stop orders, become averaged by adding to losing positions.
- Lack of knowledge about the market and lack of start-up capital does not allow many traders to admit their mistake and come out with minimal losses. Instead, they hold the position until the small losses become enormous as a percentage to the size of their account and only after that they close.
- Traders are trading with emotions that do not allow many of them liquidate positions with minimal losses and cause them to get out of profitable positions too early.
- Trading of too volatile markets with insufficient size of the account.
- Lack of discipline forces traders to trade when they want. They cannot wait when the market gives them an opportunity and a good chance of successful position – they start to trade when they turn on the computer.
Tips to become a profitable Forex trader
Here are a few professional tips to help you reach your goal sooner and become a professional, successful trader.
- You should to analyze the market in different time ranges from M5 to H4 (considered to be the optimal choice when trading in short intervals, at long trade should take into account longer periods of up to WN)
- Pay your attention on the days of the week (weekend trade is not happening and there are gaps (gap-s) in quotes, which can cause uncontrolled gain or loss).
- Take note of everything that happens in the world, because the fundamentals of the economy significantly affect prices and currency exchange rates, which in turn, can significantly affect the market situation for any trading instruments.
- Before you start trading, we recommend you open a demo account for trading in real mode; you can be more aware and prepared.
Tips for beginners from professional Forex traders
Are you not yet convinced?
Here are more of tips for beginners from professional traders.
- First of all, completely forget about such concept as intuition. In trade, it cannot help you. Intuition is a vile and deceptive sense, which failed many experienced traders. In addition, the intuition is based solely on experience, and you, as a rooky, do not have this experience, and therefore no intuition can be applied. If you feel something – this is not intuition, but just some of your hidden desires. The market does not have to satisfy your desires, and therefore dismiss them right away and get to a sober calculation. Intuitive trade is a sure path to failure, and all the successes that it brings are only temporary and accidental. For system work this approach is unacceptable;
- Forget also about greed and passion. The market owes you nothing, and it is useless to demand anything from it. Market is not a means to achieve your goals; you cannot manage it or subject it to your will. All you can do is to take advantage of the opportunities that it provides to you, but they are still yet to be found. Working in the market is a methodical analysis, observation and good judgment, and any emotions and desires only hurt in trading. The same with rush. If you missed the opportunity, it is better to give it up completely than to try to use it behind time. Take your time, the market is not going anywhere from you, better focus on finding other options that it has to offer;
- Do not try to outsmart the market. For this purpose one must have enormous experience and usually grand capacity. It is a thankless job to hope that the market will break the rules to suit you, well, the same relates to the sense of hope in general. What is much better is to learn the rules and to act within them. In this case, your actions will become systematic in nature, and it will be much easier to achieve success. If you’re trying to cheat – the market will crush you. Here, as with intuition, if lucky once, it is just a coincidence;
- There is also no point in being afraid of the market. Whatever they say about funds rotating on the market, about who earns on whom and at whose expense the market lives, remember – no one hunts your money specifically. Fighting the market is not necessary – it is not a rival. It does not care – about you, as well as about you fighting it. If you oppose it – it will sweep you away without noticing you, if you walk in parallel with it – you will be able to get the result. If you already had a bad experience, or complete failure- it should not raise fear of the market, for only you are the only one to blame. You made a mistake, miscalculation, ignored a rule, failed to keep pace with the market, to keep up with it, and as a result – it hit you with its tail. But it is not the fault of the market, the fault is yours, and the reason accordingly should be sought inside you;
- The market is a system of risk transfer. Any trade is your consent to the risk of losing some money in exchange for the chance to earn some money. Your task is to make so that the risk of the loss was paid in the best way;
- The market is not specifically trying to hurt you, but in many cases, the market is not just a pricing mechanism but also the actual site of the battle where the income of one is the loss of others. False breakouts, hiking for obvious stops – these are examples of such aspects of trading;
- It is not recommended to trade if there are no absolutely clear, mechanical rules for entry and exit positions. You have to become a strict system trader;
- Any idea is tested in sample and out of sample. That is, – first, the idea is formalized and tested on a “piece” of the history of prices, then, in case of good result, it is necessary to test it on another “piece”. This eliminates “magic” combination of system parameters / indicators which show excellent results in history, but immediately begin to fail you in the real world. Therefore, any idea is tested on demo, to test and to avoid possible adjustment of parameters to the history;
- The most important component of any system is stop loss;
- The surest way to find an interesting system is to find similar motions and to try to understand what preceded them;
- A good system very often has logic based on the behaviour of certain market participants. Try to look for such systems, they live long;
Sometimes, the market is like a lottery. There are times when people starting from one thousand dollars get in the trend, pyramid and get hundreds of thousands of profit. You can try to do the same and win in the lottery. The only advice to you on the experience of thousands of millionaires-day-traders of dot-com era who are now out of money, – never try to repeat it. In trading it is sometimes difficult to distinguish good fortune from own genius. Many have failed and they had to pay for it a very, very high price;
- In trading, as in any other kind of business, you cannot stand still. The market may become absolutely impenetrable to your profit methods tomorrow. For this you must be prepared.
How much return can you expect as a novice trader?
The answer to this very question at issue in the exchange space is ambiguous.
There are individual professional traders, trading skills of which are perfected over many years, through continuous self-work and work on their systems.
It is pointless to compare their performance with the performance of rookies in terms of the income.
In average number of examples and cases that we were able to record for the time of our work in the financial markets, as of today the maximum you can squeeze out of the market without the risk of losing capital – is 30-50% per annum.
Steadily increasing profitability from month to month in real life is quite rare, not to mention “hyper-mega-traders” with profitability of several hundred per cent.
This is at best work of chance as in casinos, where a risk of loss of all investment is higher than the probability to earn something.
Another important factor, to what extent the income obtained by a trader from work in the financial markets will cover his current living material needs.
Here lies a very serious pitfall for rookies and ultimately many questions come to the starting amount of initial capital.
If you are a newbie and have just taken a path of acquisition of skills and experience, then keep in mind that the statistics of loss of the majority of money in these markets is relentless.
And if you want to earn money from trading for living, earning tens of per cent in month from your deposit, then most likely you will soon join the army of those departed from this market with losses.
If you set yourself realistic goals and thus understand what should be the sum of the start-up capital, then you should just concentrate on not losing it on the first stage and earning something on the second.
Do I need any special training before trading Forex?
Contrary to popular opinion, that it is required for a trader to have higher education (preferably economic), knowledge of statistics and probability theories, the foundations of analysis and analytical skills, we dare say that it’s NOT NECESSARY.
They are good to have, but not necessarily! Often, presence of such knowledge can play a cruel joke with the novice trader and give undue confidence in the correctness of trading decisions based on academic knowledge.
Of course, it is required to be able to read, write, use a computer at a basic level and perform basic arithmetic operations.
But more important, in our opinion, is the ability to think and wait and rigid self-discipline.
In many cases (except for work in professional companies) you do not have chiefs and supervisors over you in this business.
It is found that within each of us, along with the instinct of self-preservation there is an instinct of self-destruction.
Therefore, in most cases the cause of his failures is in the trader himself, but not in a “weird” market.
Only self-discipline can determine your future success as a trader and turn you from amateur to professional.
It will take a lot of time and effort to overcome and submit yourself, but it’s worth it.