The foreign exchange market is popularly known as the forex market. This market is also known as earning platform. The regular turnover of this market is more than 3 trillion dollars, and this fact makes the market the most liquid market in the world. This is the reason behind the increasing popularity of this market. Everyone wants to trade in this market in an aim to earn some more money. In order to trade in the foreign exchange, you have to open an account with a forex broker and you should have a user-friendly platform like cTrader or MetaTrader.
If you are a beginner in the forex trading, then you must follow some tips in order to trade. easyMarkets has discussed some of the tips that will help you to gain success in the forex market.
Beginner’s rule 1
The very first rule is to survive in the market. Every game has win or loss, but if you go broke, you can never be in the game. So you have to make sure that whatever the situation is, you have to stay in the game.
Beginner’s rule 2
A strong trading strategy is required. But, money management is also as important as making a solid strategy. Always remember that you should never risk more than 3% of your trading capital in each trade. Before entering into the market and executing the trade, just be sure that you have sufficient trading money for at least 40 trades.
Beginner’s rule 3
The next powerful weapon is a stop loss. It predicts your risk down to the pip. So, as a beginner, you should always use it. Setting up a stop loss before start trading will remind you when to stop your trade.
Another advantage of it is that you don’t need to worry that a poor trade will ruin your whole account. Suppose your trade goes bad and anyhow you could not close it manually, then stop loss is the solution that can save you from the great loss. Hence, don’t forget to put in stop loss whenever you think of starting a trade.
Beginner’s rule 4
Always be prepared for little losses in every trade you execute as a beginner. You should be mature enough to learn from your losses. Only an amazingly lucky novice trader can profit 80% of his investment. Hence, be realistic and be happy with little profit.
Beginner’s rule 5
For the beginners, a prime source of information is the other traders who are experienced in this market. Hence, communication with the traders and reading books about forex is important. The books will provide you knowledge about the basics of the forex while the other traders will provide you the knowledge that they have gained through experience.
