Top 10 Trading Tips for Beginner Traders.

1.Tread Softly into Unknown Territory!

Don’t make the mistake of most beginners. For example, they hear some rumors and invest all they have in the hopes of profiting quickly and effortlessly. As a beginning trader start small. Humbly learn all you can about a few instruments before you dive in.

2.Hold on to your Capital!

Quick profits are out there for the taking, but real success at trading comes with time and experience.  Remember: staying cool in this line of work is achieved by discipline and knowledge, by entering and exiting the market confidently.

3.Respect Your Stop Loss!

Do you know what the number one reason is that causes traders to quit trading? They incur heavy losses because they don’t incorporate Stop Loss into their strategies. It’s that simple. If you are not familiar with Stop Loss, make sure you understand it thoroughly before it’s too late.

4.Create a System of Trading

Just like each person has their own fingerprint, so each trader has their own style. You must nurture and develop your own style by reading widely and studying carefully. Study success and you may achieve it!

5.Watch your Profits Grow!

Among  the most important things to remember as a beginning trader is to not to close your winning trades too early.  Avoid making decisions based on fear and impatience.

6.Know when to Adjust!

When your trades prove profitable, watch them closely. If need be, more your stop loss forward to your entry point to guarantee profit. Then, watch the trend and adjust your stop loss. And most importantly, watch the trend to prevent your investment from slipping into a loss.


7.Plan Forward

Trading takes finesse and planning. If the price of a stock or currency suddenly rises or falls, don’t take that as an indication that it’s a good time to enter. Knowing your entry point well in advance takes study and planning.  You must know your Take Profit and Stop Loss rates before you trade, so then you only have to wait for the right opportunity to come up.

8.Trend Basics

One more thing that new traders should be aware about is that as a new trend starts to grow, it gains momentum. So, imagine that what you see as a great opportunity, so do thousands of others thereby strengthening the trend. This could push your trade into the right direction, increasing your profits sooner than you might forecast.

9.Taking a Loss? Get out!

Remember the old saying, “Don’t put all your eggs in one basket”? So it goes with trading. If one of your trades is taking a loss, pull out! You can always reassess it from the sidelines.

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Money Management Techniques

When trading on Forex, it is necessary to know how to properly place your capital; how to calculate the amount of funds needed to make a trade in order to obtain sufficient earnings; and if it comes to loss, how not to loose your entire deposit.

To achieve these goals, there are special equity management methods (money management techniques):

No equity management methods. Most traders, when opening a position, do not calculate the amount of funds that are being used, estimate potential earnings or potential loss. This is considered to be a technique too, but if the capital is not very large to begin with, several unsuccessful trades will make it completely disappear.

Multiple contracts. Opening several positions on the foreign exchange market on different instruments, for instance, EURUSD and EURGBP, a trader can earn profit if the price moves in the right direction. Earnings can be considerable, losses too though.

Fixed amount. Depending on the amount of funds available, a trader decides how much can be put at risk when opening one or another position. The trader then makes deals not exceeding this amount.

Fixed equity interest rate. This technique is similar to the previous one but there is one small difference: the trader determines the equity interest rate, but not the equity amount.

Establishing correlation between profits and losses. It is necessary to track statistics on all operations (the amount of losses, profits and the correspondence between them). When you see the correlation between them, you can apply what you have learned to your trading.

Equity curve trading. Most people are acquainted with moving averages, which can act like signals for entering the market or leaving it. According to this method, moving averages (long- and short-term) are used to forecast trade results. If the short-term moving average of the equity curve is above the long one, a position can be opened and it will be profitable. If, however, the short-term moving average is below the long one, it is better to wait for a while.

Choosing a particular money management technique of trading on Forex can help you rationally use your money on the market and earn profit. Money management techniques are used for opening positions.

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Main Secret of Short-term Trading

The secret is the less you trade, the less you earn.

 Sad but true. Think of any investment that you have ever made. Were you able to finish a job in one day? And if you were so lucky, how many times did you do it again? Undoubtedly, very few. That’s because the universal rule of speculation is the same as for growth.

We need time to increase profits.

Successful Forex traders know that a one-minute market can move forward a little, in 5 minutes it will move a bit further, and in 60 minutes still more, and who knows how far it will go in one day or in one week. Losing traders feel like trading only within short periods of time, which automatically narrows their potential profit.

By definition they intentionally limit their profits and go along with unlimited losses. No wonder that so many come up with poor results in short-term trading. They have locked themselves into a hopeless situation, thinking that it is possible to make money during the day just by catching market ups and downs. And this theory seems to be rational, because when you trade within one day and don’t ever leave positions open for a night, you simply don’t rely on news events and major changes, and therefore narrow your risks. And this is incorrect for two reasons.

First of all, your risk is under your control. The only control you have in that business is the control over stop loss points – the point where positions close. Yes, there is a probability that next morning the market will open with a gap exceeding your stop (slip over your stop) even though it is a very rare case, but even then you can limit your losses, having stop loss points and willing to close loss-making trades. Losers stick to losses but not winners.  

As soon as you set positions with stop-loss points, you can lose a fixed amount of money. Without any reference to the time your position opens, since your stop-loss point limits your risk. Your risk is the same whether you buy at the all time high point of market or at the all time low point.

Refusing to set positions overnight limits the amount of time that brings investment growth. Sometimes, although the market may open against us, we are still in the right direction, as the market is to open in favor of us in most cases.

And what is more important, when you finish trading at the end of the day, or worse at some made-up moment, let’s say, 5 – or 10-minute intervals, you radically narrow your profit potential. Remember, a big difference between winners and losers was mentioned, and that losers stuck to their losses? Well another distinction is that winners hold their winning positions, while losers go off the market way too soon. As for losers, they don’t wait for winning positions: they are so happy to make any profit that they leave the market too soon (mostly during the day).

You’ll never make big money, until you learn how to stick to winning positions. And the longer you stick to them, the bigger your potential profit can be. When farmers sow fields, they don’t dig the plants up every few minutes to see how they are growing. They let those plants grow and sprout. Traders can learn from this natural process. Trader success is not any different from successful farming. To cultivate successful trading, traders need time as well.

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Risk Management Methods

When trading, a Forex investor can multiply capital, and the risks to loose not only potential earnings, but the invested money as well. The deviation from an average expected yield determines the investor’s risk in the financial market.

This kind of deviation can bring high profit as well as great loss.

Financial risk management does not guarantee a successful trading, but assembles important parts of it. Every currency operation is a risk. That is why usage of general management methods decreases potential losses.

1. Stop order setting;
2. Capital share investment;
3. Trend trading;
4. Emotion control.

Risk management methods are used after positions are opened. The main risk management method is an order setting that restrains losses.

Stop loss (literally means to stop losses) – is a point where trader goes off the market to avoid a disastrous situation. You have to set a stop loss when opening positions for preventing losses.
There are several types of stop signals:   

Initial stop signal – determines the deposit amount or interest rate that the trader is ready to lose. When the price moves toward this position and reaches it, the trader’s fixed level position closes, not exceeding the loss preset by the trader.

Trailing stop signal – is when price moves towards a position and stop signal is set right after it, according to trader preferences. In case the direction changes, the price reaches that signal and the trader goes off the market, potentially having earned profit (depending on when the price started moving).

Profit raising – is when a net profit has been earned and position is closed.
Stop signals at times – is when the market is not able to provide the necessary yield rate in the course of time and the position closes.

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Difference between Winners and Losers

A trader going deeply into Forex should realize that currency trades imply a certain risk: you can open profitable positions one by one, but any wrong step may bring you a total loss in the blink of an eye.
Your success does not entirely depend on your trading experience and professionalism. Every novice and professional should understand that the risk is always there, so it is better to keep an eye out. In order to trade on Forex and gain profit, you have to follow a constructive approach, be attentive and analyze every factor which may affect trends.
Below we are going to deal with 9 factors underpinning a successful trading strategy:
1. Traders who decided to work in a short-term period are initially in a risk group, which brings them closer to failure. The main reason for failure of short-term traders is a lack of training and a strict trading plan to follow, not the time limits they set. Lack of experience and knowledge does not allow even a tiny mistake, which can result in a loss of deposit. At the same time, such traders often do not have a lot of money on their accounts. More successful traders work in medium- and long-term periods. Statistically, medium- and long-term trading is more successful. The same can be referred to the funds invested, a capability to stay on the market depends much on the starting capital.
2. Losing traders often spend a lot of time on analysis of where the market will be tomorrow, while more successful ones decide how to behave in the current situation and apply their strategy in accordance with their conclusions. If a trader can foresee the reaction of crowd, he/she will definitely achieve success. The probability of deriving profit would be much higher if a trader can respond to irrational buying and selling of the crowd by a rational action plan. Therefore, it is much more difficult to be a successful analyst than such trader. An analyst has to perform more complicated work, as they have to predict the market movement and recommend how to earn a maximum profit while a successful trader just follows the market.
3. Successful traders pay attention to losing trades and to correlation of profit and loss, while losers only concentrate on their successful trades. It is much more important to track your risks than your profit or loss. Professional traders always estimate how much they can earn and how much they can lose.
4. As a rule, those traders who cannot control their emotions are never successful. Professional and experienced traders analyze the market putting their emotions aside. In case a trader opens and closes positions based on emotions only, this approach cannot be considerate or logical. However, complete ignorance to one's emotions is wrong too. Sometimes excessive stress may lead to mental disease and loss of all trading skills. The best way is to track each emotion and consider if the reasons for one or another decision still remain.
5. All unexperienced traders are concerned about their rightness, while professionals admit their emotions being able to master temper. Successful traders only acknowledge those factors that may help or prevent from obtaining profit. It is very important to stay aware of processes on the market; however, it is necessary to separate private life from trading. Considerable exertion may result in mental disorders and physical exhaustion. Professional traders promptly react to market processes, as it is the only way to earn money for them.
6. After losing money while trading a loser starts buying new books or trading systems and following their concepts. In the meantime, a professional analyses the incident and edits his methods with a regard to the analysis results. More successful trader does not switch to another trading system at once; he/she rather does it after realizing that the old one does not work properly. Successful traders always stick to their developed system using only a few trading strategies usually.
7. Traders without a considerable trading experience often try to repeat trading techniques of famous traders. At the same time, professionals consider all possible strategies, including ones of famous traders, but use them only in case they suit their trading style. Trader's individuality, a knowledge about the market and own trading system are much more relevant than the achievements of famous market players.
8. Often inexperienced traders do not notice numerous factors that could help them to derive profit. Profit of each trader determines the amount of funds in circulation, that is clearly realized by all experienced traders. The amount of money flowing into Forex must exceed the one flowing out, and this is what every trader has to take into account.
9. As a rule, all beginning traders losing any opportunity to get profit really take it too hard, while more successful traders take it easy. Trading is a pleasure for them; however, they take it absolutely seriously. Psychiatrists argue that an excessive seriousness makes person more vulnerable to diseases.
Both successful and losing traders take Forex trading as some sort of a game.
If we compare trading with a game, for example, bowling, newbies realized that strikes thrown by experienced professionals without any visible effort are results of much time spent outside the "big game". As in sports, trading implies numerous internal and external factors. You should be extremely serious about each of your trades. The difference between a professional and a beginner is that the former follows an accurate trading strategy and the latter takes trading as a game.

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