While you’re still setting out, you don’t want to risk blowing your entire account on a single bad trade. You can avoid this eventuality easily enough by limiting the capital you allocate to your positions.
The standard FX trade size is one lot, which will give you a large exposure and can see losses mount up quickly. Look for a provider that enables you to trade in smaller sizes – with City Index, you can set your own sizes outside of traditional lots and mini lots.
One of the best things you can do to ensure that you start trading forex successfully is to make a comprehensive plan before you even consider opening your first position. The more information you include in your forex trading plan, the better. You should think about why you’ve decided to trade forex, plus what your goals are and…
Letting profits run and cutting losses is an oft-repeated mantra among traders, and with good reason. For beginner traders, it can be hard to put into action – when you see a trade in the green, it can be tempting to close it immediately and realise the profit. Similarly, accepting a loss can a tricky…
Another key factor in controlling risk is to manage the money you’re allocating to any given position. Many successful traders stick to the 1% rule, which involves only ever risking 1% of your total funds on any given trade. If, for example, you have £5,000 in your account, your total risk on any position would…
There are four main styles of forex trading, categorised by how long you keep your positions open: Finally, position traders keep their trades open for weeks or months at a time, looking to take advantage of major trends In general, shorter-term styles are more favoured by FX traders, but all are valid if you have the right conditions….
Speaking of trying things out, we’d always recommend that beginner traders start with a forex trading demo account before they commit real capital. That way, you can ensure that any early mistakes are made in a simulated environment that won’t end up costing you money. Most trading demos use real market pricing, so they’re as close as…
Finally, know when it’s time to exit your trading platform and call it a day. Trading can be emotional, and emotions will cloud your judgement: even positive ones. So, after a string of successful or losing trades, make sure to take a step back and evaluate whether it’s time to log off. It may also be time…
