5 Simple Forex Tips
We often hear that 95% of traders fail in the forex business. This is true. But along with the amount of training and knowledge about the forex business, you too can also succeed from this forex trading. Here are some 5 simple tips you can do before really jumping in the world of forex trading.
Experiment with Demo Accounts
All beginner traders know this, but there are many who are reluctant to do it. When you are a new person who knows forex, or when you are trying several trading strategies, you must always use a demo account. And when some of these experiments produce something positive about the demo account, then you can start trying it on a real account.
Usually professional traders try to experiment with their new strategy for months of demo accounts.
Say at least 3 months. When the strategy looks very profitable, then they apply to their real account. Although it sounds too long and wasted time, but this is highly recommended especially for those of you who are still beginners in forex trading.
Remember, a surgeon must learn to operate using practical tools in the form of dolls and the like, and when the doctor has graduated in his studies, surely he has professional knowledge in treating and dissecting his patients. The same is true of a professional forex trader.
Invest Small Funds First
Investing in forex trading is very difficult, most traders end up having lost and lost a large amount.
You must acknowledge this fact. So when you start opening and trying to trade using a real account, start an investment from a small fund where you are ready if the fund loses. Never use savings funds such as funds for children’s education, health funds, basic needs funds especially loan funds.
Again forex trading is not a way that can make you get rich overnight, so you have to think carefully before using these funds for forex investment.
Always Use Stop Loss
The Forex market always moves fast and is high volatile. When prices move according to your analysis, they will certainly be very profitable. But what if the opposite? Certainly it can make the funds on your account lose and decrease a lot. In forex trading there is a feature where you can minimize every risk. Stop Loss. Yes, always use stop loss every time you open a position.
Never trade more than 5% of total margin
Every open position in forex certainly brings multiple profit potential, but what if it turns out that the position is losing money? Every trader has a different trading history.
Sometimes 2 or 3 entries he loses in a row, and sometimes more than 10 positions he loses. One way to keep your margin funds safe is to always manage the risk in each entry position that will be opened.
Most professional traders always use a risk of loss of no more than 30% of the total funds they have. So if every position he loses, then only 3%. So it does not affect psychology too much and is too eager to return the loss that has been received.
Creating a Trading Journal
The good thing about trading is that it doesn’t make you stop learning from mistakes. That’s why you have to make a trading journal in the portfolio.
You can find where lies the mistakes that make you lose, the potential that has the opportunity to make a profit. In this way you can review your trading performance at least every weekend. Creating a trading plan or trading plan for the next week will make you a better trading person.