Trading Forex in the year 2021 could bring you a lot of profit opportunities. But there are some rules to follow so as not to be part of the two-thirds of people who lose their money. So it is especially important for those just starting their adventure in the currency market to know the following tips.
Define your risk tolerance
The first question to answer yourself is how much money you are ready to invest and are comfortable losing daily, monthly, and yearly. Before venturing into trading, you need to allocate the special funds just for the trading purpose.
Create a trading plan
With the previous point in mind, create a trading plan. Every decision can result in success or loss. Therefore a trading plan could be your helping hand in avoiding making mistakes and losing money. It represents a list of the rules to stick to. It should include the frequency of trading, how many trading positions you open during a day, a week, the sums you are ready to invest, and so on.
Choose your broker wisely.
If you aim to avoid falling into the trap of a scammer, take time to analyze the brokerage platforms and choose the right one. Of course, the regulated broker is always the right one. But also make sure it is a broker that can meet your expectations in terms of the language their client supports speak and the type of accounts the company offers. To come up with the right choice it is good to read the broker review before opening an account.
Pick the right account type.
You should pick the type of trading account according to your skill as a trader and the capital you dispose of. Don’t go for a VIP straight away just because it offers a lot of sophisticated trading features. Everything at a time!
Start with modest sums.
Start slowly and with the modest sums invested no matter your trading level. Your progress should be organic in order to reach the level of a seasoned currency trader and switch to a gold or premium account. It’s not advisable to shell out a bunch of many at the very beginning.
Focus on one pair of currencies
With so many choices regarding the pairs to trade on the Forex market, you might be tempted to try out several of them. Don’t do that. Instead, go for one currency pair, the major one such as, for instance, CAD/USD, just to feel the market and develop your own trading style and strategy.
Control your emotions
Losing or winning, you need to keep a cool-headed attitude. Nobody wins all the time or otherwise. But what is important in these situations is to analyze every decision and its outcomes and learn from your mistakes.
Keep trading journal
By the same token as the previous tip, keeping a trading journal is ultimately essential. It helps to have a clear insight into your trading style, and it allows you to improve what’s wrong and continue making decisions that bring you profit.
With all these tips in mind and the firm will to educate yourself at every step of your trading journey, you are well set to make great success as a Forex trader.