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10 Things You Should Know About Forex If You Want To Succeed

The foreign exchange market (known as Forex) is a very dynamic and the most traded currency market in the world. The average daily turnover on Forex market equals 5 trillion USD and is continuously growing. It is a decentralized and highly liquid market that allows you to trade on all of the world’s currencies almost 24 hours a day (with a break between Friday and Sunday evening).

 

When trading currencies, you can speculate on the future direction of the currencies movements and you can buy and sell currencies simultaneously.

 

But currency trading, when it comes to Forex, means trading on pairs only, not single currencies.

 

Forex is undeniably a very interesting industry, but it’s also challenging and not suitable for all traders. Therefore, it’s essential to learn some rules about Forex trading, if you want to become a successful trader.

 

  1. You will not become very rich in a year or two. Not even in three years. Those, who think that Forex market means easy and quick money, should reconsider their decision of joining the industry and preferably not join in at all. If you’re hasty or reckless, then Forex trading is not for you - you can suffer serious losses easily with that kind of attitude.

  2. Plan your goals. Before you enter the market, you must define what you want to achieve, how much of your time you can devote for trading.

  3. First learn one trading strategy and stick with it. Once you pick a strategy that suits you, test it carefully, make some adjustments if needed, and stick to it. Trying a combination of few strategies is a good move, but for more experienced traders.

  4. Don’t overtrade. Overtrading can mean either risking too much money, or trading too frequently in a short timeframe. Sometimes it means both and it may carry a high risk to your trading account.

  5. Restrain your emotions. Forex trading often can be very exciting and stressful. Before you start trading, you must be sure that you can keep your emotions under control. Doing so will help you to focus.

 

  1. Manage your risk. Never trade money you cannot afford to lose - say experienced traders.

  2. Keep a trading journal. Note details such as entry and exit conditions, note your observations, successes and failures. One day you may find these notes very helpful.

  3. Choose your broker carefully. The importance of that choice is often neglected by beginners. When choosing a good broker, focus on regulations, customer service, trading platform and also how many currency pairs the broker offers. For instance, CMC Markets offers over 330 currency pairs from all over the world.

  4. Money Management is very important in trading - experienced traders do not risk more than 1% – 5% of their capital per trade.

  5. Learn to accept losses. The truth is, losses are an inevitable part of Forex trading. That does not mean you will lose a lot, or everything. But you have to accept the risk of losing some of your money while trading. Through losing you can develop your trading skills and eventually become a profitable trader.

 

12-07-2017
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