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 skill to master.
If you can stick to your plan in the heat of the moment, however, chances are you’ll find your success rate starts to climb.
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…
There are two main ways that traders analyse the financial markets: Technical analysis involves looking at an FX pair’s price chart, using indicators and patterns to determine where it is headed next Your choice between the two will dictate how you navigate the markets, and which opportunities you’ll trade. You don’t have to stick to one…
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…
Risk management might be the most important factor in dictating your long-term forex trading success – and the basic building block of any risk management strategy is the stop-loss order. Stop losses are instructions to your trading provider to close your open position if it moves a certain number of points against you. They are useful…
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…
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…
