Before investing in the forex market it is important to collect the most important forex trading tips. Forex trading is among the most popular investments and it is defined as the process of exchanging one currency for another currency. The forex market is a global marketplace for exchanging national currencies, and it is the largest financial market in the world. That’s why it attracts investors from all over the world.
Before investing in the forex market, you need to know that forex – the same as any other investment- should be based on knowledge and analysis. As a forex beginner, you can keep it simple as you learn along the way. Here are the top forex trading tips to help you start your journey.
Top Forex Trading Tips
Before you start trading, it is important to learn some basics that will highly improve your trading journey and minimize the risks. Forex beginner’s tips can vary based on your personal skills, financial skills, and investment strategy. Here are some of the main basic rules to follow:
1. Start with Knowledge -Educate Yourself First!
Before risking your money, make sure to educate yourself about the market. You can start by knowing the basics like currency pairs and understanding how prices move up and down. Be sure that there is always a new lesson to be learned in forex trading, no matter how experienced you are. Keep reading and educating yourself on every trading aspect. Remember that you can make more profits when you invest time and effort in learning what you’re trading.
2. Keep a slow and gradual Approach
Most beginner forex traders feel enthusiastic about trading so they open many positions and take high risks. That usually ends up with big losses. Remember to keep it slow and steady. It’s important to keep things under control by not jumping in with big money trades, but rather begin with small trades and take your time. Eventually, it’s not a race.
3. Do a lot of Practice
Through practice, you’ll discover more techniques and secrets about forex trading. It will make you more confident and will leave you with experience. Practicing forex trading is the only way to achieve better trading performance before trading your real money. Open a demo account and practice your trading skills. It is also recommended to explore different types of analysis and learn the basics of fundamental analysis as well as technical analysis. Analytical skills are essential for a forex trading mentality.
4. Be Realistic
It is very important advice that you should keep in mind. You have to be realistic about your trading expectations, and risks as well. Know your limits; how much you can afford to lose and how much you can make according to your experience, knowledge, and goals. Many traders fail because they don’t understand how important risk management is in forex trading. Avoid chasing different recommendations and forex signals without having an investment plan to assess your risks and your investment funds.
5. Follow the Trend
As a beginner, you can play safe and follow market trends. Learn about market trends and how to profit from them. You can trade proactively by spotting trends. Trend analysis is another important factor to consider and one of the best forex trading tips to follow as a day trader.
6. Make a Plan, Stick to it
Make a proper trading plan using the knowledge and experience you gained through practicing and always stick to it. Before actual trading, mostly we are rational, but things can be challenging. That’s why making a trading plan is not an easy task but once you will make it then you can do successful trading. With a trading plan, you always get to know whether you’re going the correct way or not. Remember to evaluate your plan regularly and adjust it whenever needed.
7. Learn How to Control your Emotions
In forex trading, it is important to control your emotions and that’s what you need to learn from the essential forex trading tips. Trading psychology is a major factor in many losses in the market. That’s because when you can’t control your emotions, you will probably start to make wrong trading decisions. So, it’s better to stay rational and emotionally detached.
8. Embrace your Mistakes
It is very common for beginner traders to make their mistakes, it happens anyway. But most importantly is to learn from your trading mistakes and learn to avoid repeating them in the future. The best traders are the ones who can turn their mistakes into profits.
How to Start Trading Forex In Steps
For forex beginners to get started effectively in online trading, they have to gain the basic knowledge and forex tips as well as understand some of the basic concepts. By getting to learn the main steps and following the tips they easily can prevent mistakes that may lead to losses and hinder your growth. Here’s how to get started as a forex beginner.
Step 1: Find a Reputable Forex Broker
Trading forex online requires finding an online broker who will help you achieve your goals and prioritize the safety of your funds. A forex broker is an intermediate that connects traders or entrepreneurs to the forex market. To trade successfully, forex brokers should provide investors with the data, tools, and leverage they need. The forex broker you choose should be regulated in at least one country. The more significant the broker is, the more stable his trading platform and servers will be.
Finding a trustworthy forex broker can be a hard nut to crack. Check out online reviews and forums to make sure you’re investing your hard-earned money in a reputable company. Read the AximTrade review to find out the benefits of trading with a regulated forex broker.
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. Here are the top 10 tips to choose the best Forex Broker based on your goals.
One of the most important forex trading tips in choosing the best forex broker since the broker is considered your trading partner. Make sure to choose a reliable broker which is trustworthy, and offers tools that match your trading style and different trading options. Explore trading opportunities with the top forex broker with reliable trading conditions with the best forex broker.
Step 2: Choose the right Forex Account Type for your business
Given the fact that the Forex market is home to a diverse range of traders of varying expertise, forex brokers with good reputations generally offer multiple types of Forex accounts. You can choose from:
- Standard Account
- Cent Account
- ECN Account
- Demo Account
While a Cent account and a Demo account are most suitable for beginner traders, business professionals are advised to start with the Standard and ECN account to achieve successful Forex trading. Let’s look at why!
Standard Account – Most Popular Trading Account
Standard accounts are the primary trading accounts offered by most Forex brokers. The main advantage of using a standard account is that brokerage firms typically offer their best features and benefits to standard account holders. For Standard accounts, 1 lot = 100,000 currency units.
A beneficial thing about choosing the standard account is that you are free to trade a variety of trading instruments like currency pairs, commodities, high leverage, low spreads, high affiliate rebates, seasonal bonus programs, and the ability to trade in more volumes simultaneously.
ECN Account – Gives Direct Access to Market
ECN stands for Electronic Communication Network; it is a system for trading Forex without agents. ECN accounts are one of the most popular account types because of their transparency and direct market access. Forex brokers offer an ECN account along with traditional accounts and charge a commission per lot, with lower leverage and minimum deposit.
ECN accounts are a perfect choice for professional traders seeking optimal trading conditions. With ECN accounts, trade execution can be faster than with other account types since all trades are executed immediately without requotes. Since ECN accounts instantly match orders from traders with the best buy and sell prices, they offer lower spreads.
Unlike most brokers which offer ECN and Standard accounts, AximTrade offers an additional account tailored exclusively for Forex entrepreneurs. Coming with infinite leverage, the AximTrade Infinite Leverage Account offers traders the ability to trade more for less, resulting in a higher profit margin. This one-of-a-kind forex account type enables entrepreneurs to trade larger positions with borrowed funds, maximizing their trading potential helps achieve successful Forex trading.
Step 3: Find the best currencies to trade for better profits
With more than 200 currencies available in the forex market, traders have a wide selection of currencies to choose from. However, there is no guarantee that every currency available to trade will yield profitable outcomes. One of the most important forex trading tips is that you learn about the different currency pairs and what effects their prices and market liquidity.
The Major currency pairs are always preferred since the market movements are easy to predict and you will be able to make consistent profits by understanding their nature. Major currency pairs represent the most stable and prosperous economies across the globe and offer low spreads that accurately reflect market prices, making them especially appealing to forex traders. for more information, read The Best Currency Pairs to Trade in 2022 for successful Forex trading.
Step 4: Take advantage of the Forex Bonus to maximize your earnings
The best way to make the most of your entrepreneurial trading experience is to find a broker who not only has a solid Forex bonus scheme but also does well in the market. The main benefit of Forex bonuses is that they increase your capital. Getting a forex bonus motivates you to trade more. You are more likely to achieve successful Forex trading if you have a large number of funds in your trading account.
Trading with a Forex bonus increases your trading equity and investment capital. Let’s say you deposit $2000 in your trading account and receive a 20% bonus, meaning that $400 is added to your account. Now, the total balance of your account is $2400. By maximizing the value of your initial deposit, you will be able to hold more trades and swap larger lot sizes.
Forex brokers offer several types of Forex bonuses to attract new clients and reward existing ones. Some of which are offered to you as an incentive when you open a forex account (Welcome Bonus), while some will be given to you after you have completed a trade, and others are deposited into your account after you have made a deposit (Deposit Bonus). Even though these bonuses come in various forms, the one thing that is true about all of these bonuses is that they’re all beneficial!
Step 5: Successful Forex Trading Requires Risk Management
Forex trading requires you to spend money before you can make it. In spite of the fact that you must invest more to gain a greater profit, you should never enter the forex market without knowing the risks associated with Forex trading.
Successful Forex Trading = Managing Risk Better
You should never create a forex trading blueprint without thinking about your risk management. Though it is expected that all Forex traders will experience drawdown periods throughout their journey, at the end of the day what matters most is maximizing your profits and minimizing your losses. Risk management is essential to successful forex traders and one of the most popular forex trading tips recommended in the industry.
The biggest risks involved in the Forex market are:
- Leverage Risk: Leverage adds excitement to forex trading. With leverage, Forex traders can gain greater access to the market than they could otherwise afford. However, while leverage increases gains, it also magnifies losses. Regardless of how attractive leverage may seem, you should always keep in mind that excessive leverage can wipe out your entire capital in a flash.
- Liquidity Risk: Liquidity reflects how actively an asset is being traded. For some currency pairs, exotic pairs, for example, the liquidity is insufficient to execute trades instantly. As a result, traders may make smaller profits or even lose money. The overlap between the US and European trading sessions is the time of highest liquidity in the forex market, especially for major currencies.
- Volatility Risk: When the exchange rate of a currency moves too fast and too big for anyone to accurately predict when it will stop, it is termed volatility risk. Traders are taking on massive levels of risk at these times in an attempt to make a profit from the markets. If prices jump in a chaotic way, it’s best to wait until things settle down.
- Personal Risk: This risk is most commonly caused by inexperience and lack of knowledge about what Forex trading is truly about. The most common mistakes traders make involve placing trades without proper analysis of the market or following a trend they don’t understand. The first steps of trading Forex should always be guided by sufficient Forex education.
You cannot achieve successful forex trading without a set risk management strategy in your trading plan as drawdowns are inevitable, and as a result, cannot be avoided. Here are the top 10 steps to effectively manage Forex trading risks to read.
Step 6: Keep track of important news releases to stay profitable
A big news announcement is a catalyst that kicks a slow trading period into high gear. Within seconds, an announcement regarding economic data can cause currency values to rise or fall significantly, especially when it goes against forecasts. A few notable examples of news events that affect Forex trading include,
- Central bank meetings – closely watched for indications of future interest rate changes
- Interest rate decisions – by central banks, because a higher interest rate tends to attract more global investment and capital, therefore strengthening the currency
- CPI data – a measure of inflation that can affect central bank policy
- GDP data or Gross Domestic Product – a measure of all goods and services produced in a country
- Trade deficits or Imports Vs Exports – resulting in higher cross-border capital flows, impacting the exchange rate
- Consumer consumption – a major factor driving economic growth in the U.S. and around the world
- Unemployment rates – a percentage of the unemployed workforce, since lower unemployment correlates with better growth and a stronger currency
- Consumer confidence – reflects how consumers feel about the economy and influences the consumer spending
- Retail trade – determines how much consumers spend and drives economic growth
In order to increase profits, forex traders should try to trade during volatile times while keeping an eye on economic data releases. This helps them plan ahead so they are sure opportunities will not be lost during time off.
Start Forex Trading With a Trusted Broker
AximTrade offers a variety of options when it comes to forex accounts. Traders can choose the best forex account type based on their investment, trading strategy, and level of experience. The different accounts also offer negative balance protection with a low spread from 1 pip on all major pairs. Investors can also enjoy a competitive forex bonus on all account types with a minimum deposit starting from $1.
AximTrade is a regulated broker which ensures the broker’s compliance with the highest international standards and best conduct of business practices. This means you won’t have to worry about your funds or the privacy and confidentiality of your transactions. You can also choose between various account types, based on your trading strategy, experience, and capital designed for investment.