Beginners forex trading are usually overwhelmed by the huge number of products available to the newcomer. A lot of the sales material used to attract new forex traders make wild promises about how easy it is to make money with the most minimal of effort. As a forex beginner there are certain things that you should be aware of regarding the different forex trading strategies on the market.
There are essentially two different approaches you can take to trading: either follow a fully automated system or study a training course that teaches you the building blocks which you can then
The best forex trading systems are usually the most straightforward but beginners often think that the more complicated the system the better it is. This is not true When chosing a system pay particular attention to the following forex tips;
- Avoid any system or guru who tells you that it is possible to me 100% accurate when trading. This is simply untrue, even George Soros and Warren Buffet get it wrong from time to time.
- Look for a system that pays attention to the prevailing market trend. The expression “the trend is your friend” exists for a reason.
- A system should have at the very least the following 4 components: an entry signal, an exit signal, a protective stop and a trailing stop.
- Professional traders realise that their system is only part of their success. They also pay a lot of attention to their money management – it’s not as sexy as a screen full of charts and flashing quotes but this aspect is arguably MORE important than the system itself.
- Trading can be a tough business and the more attention you pay to getting the right mindset then the more money you will make.
Don’t forget that the currency markets are massive and there are a lot of very sophisticated forex traders and financial institutions that participate in forex on a daily basis. As a result, prices can often move rapidly in one direction so if you don’t enter the market armed with a plan then it is very easy to panic and make errors.
As well as following a clear trading plan, forex beginners should decide what type of trading they want to adopt. For example if you have a full time job then it would make more sense to follow a strategy that you could work on out of office hours, decide on your trades and automatically enter them in your chosen forex trading platform rather than try to react to changing prices during your working day. Obviously if you have more time on your hands then it might be an idea to check out forex strategies that could be applied to the day trading market.