Forex Trading Secrets

Forex is not a mystery or a gamble, but only about 5% of the traders who start out in forex are successful in the long term. As successful traders will tell you, there is no secret to trading forex, but no matter what their style or system, successful traders will offer very similar tips to forex rookies.

Practice

Practice makes perfect and forex is no different. Start trading on a demo account and when you can be consistently profitable with that then move to a real account trading for pennies. Once you are successful there then invest more. Your capital should grow with your confidence and early on you should be able to make mistakes without risking your life savings on a single trade.
Demo accounts should also be used to test new trading systems as you are developing them. This gives you a sand-box in which a losing system doesn’t mean losing capital in your main account. Always play smart and keep the real money out of it until you know you are doing the right thing.

Education

Education is important as well and it comes in a few different forms. The first is simply learning the terms associated with forex, a little about what makes the markets work, a little about chart patterns and technical indicators, as well as how different economic news can affect the way currencies behave. You should talk to other traders and soak up as much information and understanding as you can. They have experience and they know how to work the market, use their experiences instead of your own.

Keep a log of your trades and why they went right or why they went wrong. Why did you lose so much on this one, while this one was a big win? Were you getting a different signal or did you miss a line of support or resistance that you should have seen? Writing these down will help you make better trades in the future.

Discipline

Learn early to admit when you’re wrong and get out of a trade. Chasing the market or waiting for a loss to come back to you will end up only making it worse when you finally get out of the trade. Close trades when your reasoning is no longer valid or when you are no longer comfortable with how the market is moving.

Money Management

You can’t trade without money so keeping what you have in your account as long as possible is very important. Don’t risk more than you can afford to lose and particularly never risk more than a very small proportion of your capital on any one trade. A good rule is to never risk more than 1% of your account on any one movement in the market.

Patience

Patience is what keeps goals realistic and allows you to work your way towards them gradually. Forex trading will not make you rich overnight and if you try too hard for that you’ll end up risking too much and eventually losing everything. Continued small wins are better than constantly loosing while chasing a big one.

So the secrets to forex success are not really secrets at all, more lessons in making sure you can stay in the market long enough to learn what you are looking at and what you’re doing. For more lessons on forex trading do not hesitate to visit Lucror FX at www.lucrorfx.com today!

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