Making a plan is an excellent start, but to truly trade like an expert you’ll want to keep meticulous records about your progress – noting down the outcome from every position and keeping track of the factors that made it a success or a failure. Luckily, you don’t have to do this all manually. Your…
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…
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…
Another key consideration when you’re still in the early days of trading is not to take on too much too soon. Opportunities abound in the FX markets, but successful traders know which ones to seize and which ones to let go. It’s best to begin by only having one trade open at a time, giving…
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….
With a plan in place, a style in mind and some practice under your belt, you can begin thinking about placing your first live trades. With dozens of FX pairs to choose from, though, deciding where to start can be tricky. Often, it’s a good idea to choose one or two pairs to begin with,…
Leverage is fundamental to forex trading – without it, you’d have to commit huge amounts of capital to earn a return. However, it is important to understand the effect that leverage has on your profits and losses. When you trade using leverage, your provider is in effect lending you the additional funds needed to cover the…
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…
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….
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…
