If you’re just starting out in forex and need some guidance and forex trading tips then you’re in the right place. In this article, I’ll give you some great but simple advice that could transform your trading.
For each trade that you make, make sure you also specify a stop loss level. Trading without a stop loss is like playing football without a jockstrap! Simply, do not do it!
Ideally, you should also have a profit target (when to exit the trade) that you know before you place the trade. You can always revise this later.
Logic Over Emotions
The reason that you should have these is because it will force you into the habit of having a solid logical reason for each trade that you make.
The simply fact is that if you don’t even know where you should place a stop loss, let alone your profit target then you are trading on “gut” or “instinct” and not logic.
If you keep trading this way, you might get a lucky streak but you will soon regret it when you lose it all and possibly more. I have seen this happen to way too many traders.
Know Your Markets
If you’re using logic then you need to understand your markets. You really don’t need much knowledge at all to trade profitably.
Just pick a few markets and observe them. It’s easiest to start with the majors like EURUSD, GBPUSD and USDJPY. Check the forex news websites and monitor these markets closely. There are even many great market commentaries on Youtube.
You’ll start to notice some trends in the way that the market reacts to news. You’ll start to get a feel for the direction of the market.
And if in doubt, then you always have another option…
Outsource Your Research
If you don’t want to spend time learning and understanding the markets then simply pay a small fee to outsource it.
What I mean by this is to buy some good quality forex signals or a good autotrading “robot” (a predictive model). The cost of these is far less than the money you will make, so much so that you will consider it negligible.