Everyone has his own reasons to dive into the Forex trading, ranging from sheer entertainment to a more serious approach, making it a career. Whatever is your reason for joining the elite Forex traders club, standing on sound footing in this tricky business can't be overemphasized. Below are the 3 important tips for a Novice that I think are worth mentioning:
1. FOREX TRADING IS NOT A QUICK RICH OPPORTUNITY
Let me unveil a bitter truth for your benefit from the start. It is poisonous but intoxicating thought, "you can easily earn millions of dollars by investing 10,000$ in Forex trading" and boom you will be a millionaire in months, far from it. Thousands of folks have fallen victim to these scams and have lost their hard-earned cash in the process. Don't be one of them.
Aiming for earning 1 million dollars is not bad but we have to do it slowly and steadily. Divide your target income into achievable goals and then work hard to get them in a reasonable time frame. The old saying "Divide and rule" is valid here as well. Don't target 50%, 60% or higher in an year or worst in months, since the risk involved in such trades can ruin your account balance.
2. LEVERAGE IS A GOLDEN RECIPE TO LOSING MONEY FAST
Leverage in Forex is the ratio of the trader's funds to the size of the broker's credit. In other words, leverage is a borrowed capital to increase the potential returns. The Forex leverage size usually exceeds the invested capital for several times.
Avoid high leverage at all costs. True, it promises good returns but it will hurt badly if the odds goes against you. Remember, you are a trader and not a gambler.
3. KEEP A TRADING JOURNAL
Learning is not a linear activity. You make a strategy and it earns you some dollars as well but losses are not inevitable. Make it a habit to note down every trade with a detailed strategy and your comments when the trade concluded. Note committing a mistake is not bad but making the same mistake over and over is plain stupidity.
//Image Credits: Forex Live
