There is no doubt that participating in forex trading is extremely simple, as its mechanics are similar to that of other financial markets. Consequently, trading forex can be relatively simple for those with prior experience trading. However, considering new forex traders have a 95% failure rate, how likely you are to succeed is questionable. So, how do you become one of those 5% retail traders who consistently make a profit with forex? Combining self-education and caution is the key!
The forex market trades an enormous amount of $6.6 trillion every day, which might make you think that it would be easy for you to profit from forex trading, isn’t it? Spoiler alert! The reality of forex trading might be different from what you imagine. A gambler’s mentality is what makes most new traders lose money trading and fail to profit with forex trading. It is a game of luck that determines whether they win or lose. They approach their trading with a cavalier attitude and little to no education, believing they have a 50% chance of being right.
Why do 95% of Beginner Forex traders fail?
95% of beginners fail to make profit with forex trading since they have no idea what they are doing wrong or how to execute their trades. In the hope that their luck will change, they flounder on. They don’t understand that forex isn’t about luck but rather a skill that is learned through practice, more like an art, if you like.
To start trading like a pro forex trader, you need to understand what you are good at and what habits inhibit your success. Beginners need to understand that all professional and successful forex traders of today were once beginners, and they have all been through what you are experiencing right now. It is unlikely that anyone can open a forex account, start trading, and immediately win.
You can ask any successful forex trader about the mistakes they made when they were a rookie trader, and they will tell you all about them. They may have failed to make it as a forex trader several times in the past. The reason they are successful is that they have endured the trials and tribulations of forex and learned from their mistakes. Listed below is a list of strategies you may use to increase the likelihood that you will make a profit with forex trading.
Read the beginner’s guide on how to get started with Forex Trading in order to gain a deeper understanding of the process.
The Best way to Learn Forex and make Consistent Profits?
The most successful forex traders have one thing in common – they put a lot of effort into it every day and keep learning. Simply put, the more time and effort you put into researching the market, the greater your chances of making a profit from forex trading. The majority of people attempting to jump-start a trading career leave disappointed and unsatisfied because of false motives, unrealistic goals, greed, and excessive haste.
Below we have outlined the steps you should follow to become a successful Forex trader.
1. Learn & Prepare Before You Begin Trading
Whenever it comes to succeeding in Forex trading, there is an old saying to keep in mind,
Prepare to plan and plan to fail.
The key to making a profit with forex is to learn forex trading and understand how the markets work. Educating yourself is essential to managing risks, trading profitably, and setting yourself up for success in your new investment. Forex trading can be learned in many ways, which include both free and paid options. Nevertheless, it is recommended to verify the credibility of the training provider before signing up.
- Taking a forex trading course while making your debut in forex trading it is one of the most essential things you can do to prepare for success. Forex trading courses combine theoretical and practical instruction to help traders improve their proficiency in the market, making it much easier to trade for beginners.
- You can also gain access to forex education from a wide range of sources, ranging from articles, forex forums, youtube videos, online tutorials, your introducing broker and so on. Nevertheless, it is important to make sure that the information provider you are going to use is one that you can trust and rely on.
However, even with constant learning, it is important to note that there’s no assurance that you can make a profit with forex trading every time you trade, and even experienced traders cannot always predict the exact direction of a market. Maintaining a consistent profit in the forex market requires continual learning and improvement. It is also crucial that you have knowledge of a variety of tools, techniques, and strategies in order to be successful when trading.
2. Identify the type of Forex Trader you are
There is no one-size-fits-all trading style applicable to forex traders. Identifying whether you are a long-term or short-term trader before you begin trading is crucial for starting out. The best way to determine whether to trade forex long-term or short-term is to understand the market and act according to your financial objectives.
Trading forex on a short-term basis involves holding positions for a short period of time, usually no longer than seven days, with positions typically closed within minutes. While it is an attractive and lucrative activity, there is also a dark side to it, which is a risk that may not always be in your favour, so it has to be taken seriously. Scalping and Day trading are the two popular short-term forex trading strategies.
Conversely, long-term strategies have been proven to be one of the most effective methods of success when trading forex in the long run. Long-term trading may take several weeks, months, or even years between positions. Identifying price trends over the long term is crucial, excluding short-term fluctuations that can be misleading. Position Trading and Swing Trading are two of the most popular long-term forex trading strategies.
It doesn’t matter what style you choose, whether it’s long-term or short-term trading style, as long as you follow a disciplined approach, and you’re consistent, there are unlimited opportunities in the markets, and anyone can adopt any strategy with a little caution and good decision-making.
3. Learn how to trade Forex from an Expert
As with any business endeavour, forex trading also requires training in order to be successful. While enrolling in a forex education may be the best course of action to take, there is still much to master in order to profit with forex. A Forex trader without experience can feel like a blindfolded person walking across a narrow plank beneath a pool of sharks. There is a high probability that you will lose.
The Copy trading strategy is becoming increasingly popular among newbie traders who want to learn and simultaneously profit with forex trading by replicating successful traders while growing their small Forex accounts. In addition to improving your trading skills, you can also reduce your research time, and overcome your inexperience by learning from successful investors and traders by copy trading. The service is also convenient for traders who don’t have the time to follow the market themselves.
If you’re new to forex trading and want to explore the forex market without spending your own money, you’ll need a Demo account. Forex trading in a demo account is similar to forex trading in the real world. Users can use demo accounts to examine price movements, test different risk management strategies, understand spreads, leverage tools, and use stop-loss and take-profit orders in real-time. Demo accounts are the best way to gain a better understanding of a trading platform without losing money.
4. Limit your risks by diversifying your investment
Investment portfolio diversification involves investing in a variety of assets to maximize returns while minimizing risks. Diversifying your portfolio can lower the risk of your portfolio because it ensures that the performance of one asset or asset class does not affect the entire portfolio. Diversified investment portfolios include Gold, Forex, Stocks, Crypto, Energies, Indices, and other commodities.
When looking to profit with forex trading, it is wise to invest in many different forex currency pairs so that your investment portfolio isn’t dependent on a particular currency movement. Considering that every currency in your portfolio has its own market conditions, if one currency in your portfolio goes down, that doesn’t necessarily mean your entire investment will be down. There is ample scope for diversification in forex trading markets due to the correlation between the currencies.
For successful forex trading and diversifying your investment portfolio, you need a platform that lets you do so. AximTrade stands out as the best broker when it comes to reliability and excellent trading conditions, offering Forex, Stocks, Crypto, Indices, Metals, and Energies, as well as various tools through the MT4 platform that enable in-depth market analysis. Check out the AximTrade review if you’re curious about the trade conditions and the benefits of signing up with AximTrade.
5. Make sure to choose a good Forex Broker
Choosing a regulated forex broker is one of the most important decisions in your trading career, as it directly impacts your growth. A regulated forex broker guarantees the confidentiality of their clients and the accuracy of their information. Regulated brokers are those whose financial activities are monitored and supervised by financial regulators, whose primary responsibility is to prevent forex trading scams and significant risks.
In addition, you should choose a forex broker who offers a variety of forex account types to suit your trading style and investment capital. Choosing an ideal forex broker requires consideration of several factors, like regulatory compliance, the broker’s trading platform, available currency pairs and trading instruments, and responsive customer support. It is crucial to becoming familiar with your trading platform to avoid making mistakes in order placements. MT4 platform is relatively easy to use compared to other platforms.
The forex bonus is also one of the most exciting promotional offers that encourage traders to step into the trading world and help them gain profit with forex trading as they grow their portfolios. Besides spreads, commission, speed, and quality of execution of trades, bonus offers are also a major factor in deciding which forex broker you will use to trade with. AximTrade now offers limitless bonus offers with a minimum deposit of $1, ranging from a 40% deposit bonus to a 100% one-time bonus.
How to Grow a Small Forex Account?
Regardless of whether you deposit $50 or $100 into your account, you can succeed with a small Forex account as long as you follow a plan, stay on task, and stay informed. With Forex being a leveraged market, trading it with $100 or $50 USD makes sense. If you use leverage in Forex, you can multiply your $100 investment by 20, 30 or 500 times how much trading you need to do. This is why many people view forex trading as a golden opportunity.
Here’s a step-by-step guide on how to trade forex with $100 in hand.
Start trading Forex with a reliable broker
Now that you are familiar with a better understanding of how to start making a profit with forex trading. Let’s get started with a reliable Forex broker. AximTrade provides a comprehensive set of educational resources, technical analyses, and educational materials, making it one of the best platforms for worldwide traders. Discover luxury trading with a minimum deposit requirement, low spreads and a wide range of trading instruments from a leading broker.
Take advantage of the best leverage levels in the Forex market from AximTrade ranging from 1:1000, 1:2000, 1:3000, and up to Infinite leverage. Open your forex account now with AximTrade to enjoy premium trading services and get access to advanced trading features with minimum deposit requirements.
Featuring an execution time of 0.004s, 100+ trading instruments, flexible leverage, and a 100% forex bonus, AximTrade stands out as the best broker for its reliability and excellent trading conditions. Discover luxury trading with a minimum deposit requirement and a diverse range of tools offered by the leading broker.