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Tips Every Beginner Should Know in Forex Trading

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Forex trading is equal parts rewarding and mind-boggling at the same time. No one goes into trading on day one completely prepared, but here are a few tips that will make your journey much easier, especially if you are a beginner.

Source: https://unsplash.com/photos/dBI_My696Rk

1. EducateYourself

No business can be run without having the basic knowledge of the industry. Most people spend years mastering a subject in schools and colleges before they ever make it into the profession itself. This applies to the markets as well. It is important to gain a basic understanding of the forex markets before you take the plunge.

2. Stick To Your Trading Plan

Throughout the course of your trading, you will realize that certain strategies work better for you than others. Make a trading plan based on your experience, modify it along the way if you have to, but stick to it.

3. Paper Trade

Paper trading helps you set your strategy and test it in live market conditions without the risk of actually losing money. Paper trading currency pairs let you test your strategies, fine-tune them and come up with the best plan.

4. Keep Track of News

International events, policies, and rules have a large impact on the price fluctuation of currency pairs. Make sure that you are updated with the latest events so that you are well prepared for the moves of the day. This helps you make trading decisions and prepare for any major moves.

5. Stop Loss is a Saviour

Always decide a stop loss before you take a trade. This helps you limit your losses if a trade does not go in your direction. This also helps you identify trades with a good risk-reward ratio, which will make you a better trader in the long run.

6. Control Fear and Greed

Fear and greed are the two major emotions that essentially run the forex market. Understanding when to control these emotions will help you book your profits at the right time, avoid holding on to losing trades and avoid major drawdowns. This will be the foundation of your trading career.

7. Stay Motivated

Trading is a taxing career choice. The constant losses and drawdowns can take a toll on one’s mental health. It is important to stay motivated during this period. Analyse your trades, go over your strategy and identity ways to improve yourself. Take a break when you need to, and find ways to stay motivated.

8. Maintain a Trading Journal

Maintain a trading journal to record the trades you take, what emotions you felt during the trade, what prompted you to take the trade and what you learnt from it. This will help you replicate winning trades and avoid losing ones.

9. Cut Losses, Let Your Winning Trades Run

One major mistake most beginners do is to hold on to losing trades in the hope that they will reverse. They also tend to cut their winning trades too soon. Make sure to cut your losing trades as soon as they hit your stop loss, and let your profits run.

10. Choose the Right Broker

It is important to identify the right broker to support your forex trading. Make sure you go over the options. Ensure to check price, execution and customer service as this is an important decision that will affect your trading in the long run.

Source: Photo by Tima Miroshnichenko from Pexels

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The information on the gsmtradinggroup.com website and inside our Messaging Group Chats is intended for educational purposes and is not to be construed as investment advice. Trading the financial markets carries a high level of risk and may not be suitable for all investors. Before trading, you should carefully consider your investment objectives, experience, and risk appetite. Only trade with money you are prepared to lose. Like any investment, there is a possibility that you could sustain losses of some or all of your investment whilst trading. You should seek independent advice before trading if you have any doubts. Past performance in the markets is not a reliable indicator of future performance. gsmtradinggroup.com takes no responsibility for loss incurred as a result of the content provided inside our Zoom sessions, Telegram Groups, WhatsApp Groups. By signing up as a member you acknowledge that we are not providing financial advice and that you are making the decision on the trades you place in the markets. We have no knowledge of the level of money you are trading with or the level of risk you are taking with each trade.

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