3 Tips About FOREX TRADING You Can’t Afford To Miss

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3 Tips About FOREX TRADING You Can't Afford To Miss

When you’re just starting out in forex trading, you’ll need to learn a lot about how the market operates. Understanding currency pairs, deciding how to trade FX, developing a strategy, and managing risk are all part of the forex trading basics. You must also decide on your trading style, whether it is day trading, or swing trading.

What you will learn

Tip 1: Use the Core Currencies in Your Forex Trading

U.S. dollar banknote with map

Many beginners stick to less volatile pairings or work across a single currency pair. But sometimes it’s better to diversify and work with a volatile or consolidated pair.
In the forex markets, currencies are traded as pairs (EUR/USD or USD/JPY). Those pairs have different levels of volatility – some high, some low.


As with most trading, the more volatile a pairing the greater the likelihood of a big profit or a big loss.

Choosing a currency pair is completely dependent on a trader’s trading approach and preferences. Minor or exotic pairings (for example, AUD/JPY, NZD/JPY, CAD/JPY, AUD/CHF) are good choices if you enjoy taking risks. They have less liquidity and higher spreads, but the more the risk, the higher the potential return (example: AUD/JPY, NZD/JPY, CAD/JPY, AUD/CHF). On the other hand, big currency pairs (for example, EUR/USD, GBP/USD, USD/JPY, USD/CHF) are a good choice if you want to be safe because they have more liquidity and leverage.

Tip 2: Find the Best Broker for Forex Trading

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When you work with a broker, you will enjoy plenty of advantages. The actual challenge, however, is determining which broker will be the best suitable for the job. Furthermore, naturally checking for their reputation is a critical part.

  1. Commissions and Spreads – Brokers typically make money through commissions, which means they will charge a certain percentage of the total spread. The bulk of brokers will not charge a commission and will instead profit from wider spreads.
  2. Account Features 

    When comparing the features of different brokers, four factors must be considered: margin and leverage, spread and commissions, initial deposit requirements, and deposit and withdrawal effort.

  3. The effort to Deposit and Withdraw – Account holders may be able to deposit funds into their accounts via bank check, credit card, PayPal, personal check, or even cryptocurrency. Withdrawals, on the other hand, are usually done via wire transfer or checks.
  4. Customer Service – You should work with a broker who provides client assistance 24 hours a day, seven days a week. Failure to have a properly operating customer care department might result in significant losses. You should test out a broker’s customer service system before signing with them by calling, emailing, or talking with them online.
  5. Regulatory Compliance – You should look at the broker’s regulatory compliance and licensing. This will ensure that the broker you’re dealing with is trustworthy and will give you a positive long-term relationship.

Tip 3: Keep Your Eyes on the Trends!

When it comes to forex trading, there are a variety of trading methods to choose from. When compared to others, some have proven to be more successful.

You should conduct a thorough study of these various strategies in order to determine which one will work best for you. Here are a few of the most common strategies to consider:

Day Trading Strategy: Trades entered using this strategy are usually closed before the end of the day. This can help you avoid being harmed by any negative events that may occur overnight. This is not what we recommend beginner traders to deal with since this requires the most attention and skills out of these 3 strategies.
Trend Trading Strategy: You’ll have to follow the trend to figure out which way the prices are going. It’s easy to spot a trend, it’s just a matter of looking at the charts and trading where the market is going: up or down. 
Swing Trading Strategy: Swing trading is a strategy that is used for deals that last from one day to one week. This is usually what we recommend for beginners that are not that keen to look at the charts most of the time. This still requires skills and discipline especially once you noticed that the market is moving on the opposite side of your trade. That’s why risk management techniques like setting stop-losses is a great way to have a peace of mind and a proper trader’s mentality. 

Conclusion

These 3 helpful beginner-friendly tips will most likely get you started with Forex trading. Be reminded that this is just a scratch to the surface of the entire forex industry. 

As a beginner trader, trading knowledge is a supplement, what you really need is hard-to-beat trader skill and discipline. You may begin with a demo account and begin exploring the platform without putting your money at risk.

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