5 Rules To Live By When Trading Forex

Forex trading is a very lucrative way to make money, especially when you are uncertain about the behavior of the stock market. However, it can also be a very stressful and intense way to do business. You have to keep your emotions in check when trading Forex, and be prepared for ups and downs as you go through a learning curve. Forex is not something that will get you rich very quickly, it is a method that has to be learned, understood and practiced with patience. If you lack discipline, make decisions without thinking, or fail to put in the time necessary you will struggle to do well with Forex.

Despite those warnings, Forex is a great way for intelligent traders to make a lot of money. People have reported 100% returns on investment within days, while some can go as high as 1000% in a month or two. If you want to be as successful when you are trading Forex, here are five golden rules that you have to remember. If you need further assistance, you can visit Online Guru Trader by Thomas Yin and take a Forex trading course to help you better understand the nature of the market.

 

1. Understand Market Changes and Trends

When trading Forex, you must be aware of the volatile nature of foreign exchange markets. These markets are ever changing, and you have to keep up with the changes if you are going to be successful. More over, you have to understand why changes are happening and when they will take place.

 

2. Start with a Demo Account and Trade Yourself

When you are signing up to an online Forex software, make sure you choose one that has a demo account. This demo account should have full capabilities, because it will give you an idea of how live Forex trading works. You can test your strategies and understand how fluid and fast moving the Forex market is. Also see How To Trade Stocks Successfully

Do not be fooled into thinking companies have a master software that can make huge money making Forex trades for you. If you are going to see high returns, you have to do the trading yourself.

 

3. Prepare for Stress but Do Not Trade All the Time

You have to remember that the Forex market is something that goes on 24/7 for six days a week. The stress that comes with such a consistently open market is unmatched. You will always be on the look out for changes in foreign exchange rates, and at the current events that are bringing about these changes.

However, just because the market is always open does not mean you always have to trade. Great Forex traders do not trade all the time. They wait until they know they can make a profitable trade, and then they spring into action.

 

4. Create a Set of Rules for Your Trading Strategy

Follow a set of rules when you are trading Forex. Create and perfect these rules when you are using your demo account, and stick to them when you are live trading. Due to the emotions involved in trading Forex, these rules will allow you to maintain control over what you are trying to accomplish.

 

5. Leverage

Ensure that you are not taking gigantic risks each time you make a Forex trade. The need to take risks is there, but you should never be leveraging more than 1 or 2 percent of your margin account when you make a trade.

 

 


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