5 important tips to becoming a successful forex trader

KNOW YOURSELF

Knowing yourself is vital because knowing what type of forex trader you are, is the best thin
g that could ever happen to you. Knowing what type of forex trader you are makes it easy for you to find a method that can be used that will automatically work for you. It helps you gain self – awareness and it also ensures that you are risk tolerant. This means that you must carefully analyse your financial goals before engaging in forex trading.

PLAN YOUR FOREX TRADING ACTION

Planning has always been a better structure in articulating anything, you probably heard that planning  gives direction to any business or committee. We can all greatly say planning defeats failure. So even in forex trading one is required to plan things such as, how much time you are devoting to trading, do you aim to get financial freedom or merely aim to generate a second income. These are the types of questions you should be asking yourself before you gain any clear understanding. This will assist you to become more profitable.

CHOOSE YOUR FOREX BROKER CAREFULLY

Choosing a broker is the same as choosing a bank. What does one look for when they are looking to secure their finances? One key factor would be excellent customer service since it is not a tangible service. Word of mouth from other clients would also play a crucial role and obviously comparing the packages they offer (eg) the importance of spreads, and execution time ‘how fast they can give you access in the market, and how long would it take for you to withdraw and get your funds.

FOCUS ON SINGLE CURRENCY PAIRS

Focussing on one currency pair is important because there is a lot of currencies. Studies around this showcase confusion when more than one currency pair is traded. Trading on more than one currency pair will most likely cause one to lose focus. This is because each currency pair represents its own country. Countries current affairs are due to the chaotic market and the best advice is to trade on a single currency pair. A currency pair that you are well educated on so that your focus is not intertwined on everything at once.  It is always a good idea to have all your focus and efforts on the major currency pairs that are allocated for a trader to trade because it does become complicated and difficult for one to keep up-to-date with what’s happening in each and every country. I mean we are just humans after all.

RESTRAIN YOUR EMOTIONS

One of the greatest and the most comprehended key factor, even the ‘BEST OF THE BEST’ still abide by this rule, is to restrain all emotion. Studies illustrates that when people involve emotions with regards to finances they become either money greedy or make the wrong decision. It is best recommended that your mind is clear when you are trading because it is easier to make a calculated decision rather than a decision that you will regret later.

Take notes

Most successful traders still take notes to date. It is a well recommended strategy that you should note down and analyse everything regarding every trade. This will help you to detect what is being done correctly and see what is being done wrong. This also provides you with an insight of the markets success or failure.
The best tip is that you need to believe in yourself, have faith and learn as much as you can before jumping into forex trading world.
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How to Choose a Forex Broker That Wont Suck You Dry

In order to successfully trade on the foreign exchange market, you'll have to find a broker. This is someone who helps you execute trades in exchange for a commission on every trade. However, there are a lot of brokers out there who want your business. That means that it can be hard to figure out which one's right for you. Here are a few things you might want to look for.

Transaction cost - Brokers in a Forex market are paid via a bid/ask spread. There ought to be no charges to trade, or hidden fees. There might still be extra charges asked by a good broker for some optional services or access to particular reports. A smaller spread is obviously better. You'll find that pip spreads vary by broker, and by currency pair. Shop around to find the most competitive rate.

Available currency pairs - Every broker should list at least the big seven currencies (AUD, CAD, CHF, EUR, GBP, JPY, and USD), but you should be sure that your broker is able to handle others. That way, if you're planning to trade in Danish krones or New Zealand dollars, you can.

Immediate order execution - The prices of currencies are constantly moving up and down. That means that any kind of delay in the execution of orders might cause losses or cut into profits. While it's possible that a delay will help, you can't rely on that. Find a broker who's able to execute your trade at the price on your screen, instantly. While occasional delays are understandable, you should find a new broker if it seems to be happening a lot.

Free tools - To help you analyze the prices of currencies, spot trends, plan exit and entry points, and much more, you'll need access to technical analysis and charting tools. Most good brokers have a basic service that offers these free of charge. For more tools, however, you may need to pay.

Minimum account balance - Small investors require brokers who don't require a large balance to open accounts. Most brokers today are willing to allow you to open a mini-account containing as little as three hundred dollars.

Margin requirement - Lower margin requirements five you more leverage. If brokers let you use a hundred to one leverage, that means you're able to trade a hundred thousand dollars in currency for only a thousand dollars. You can use this margin to acquire enormous profits, but don't do it too much, or you could lose a lot.

Excellent customer service - Many traders overlook customer service when they pick a broker. Don't do this, or you'll regret it in the long run when you need help. Any good broker will be able to respond fast to any question. They ought to have knowledgeable people available to answer your questions on the phone or via email, twenty-four hours a day.

User friendly trading platform - Some brokers will require you to download their trading program to your computer if you'd like to trade. Others allow trades to be directly made via the Internet. Pick out a few prospective brokers and sign up for a demo account. That way, you can use pretend money to trade while testing out software packages and deciding which ones you like best.
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