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Top 10 Forex Trading Tips

When beginning to trade forex, you can easily get lost or overwhelmed with all the complexities and information that comes with this potentially profitable investment practice. You could also get lucky at the start and think you know everything, only to later lose everything. Trading forex can be very profitable and exciting but if you trade carelessly without taking the time to learn, it can be very difficult. Therefore, it’s important to take it slow and learn, which is why we have provided you with the 10 best forex trading tips below.

  • Trading Forex is no easy task, but if you implement the forex tips and tricks mentioned here, success is not far away.
  • Knowledge is the key to success in many aspects of life, the same is true in Forex trading.
  • If you’re just beginning to trade forex, these forex trading tips are a must.

Steve Miley

pro MEMBER SINCE 2018

Steve has 29 years of financial market experience including 3 years at Credit Suisse and 15 years at Merril Lynch. Steve is the Academic Dean for The London School of Wealth Management and has won many awards from Technical Analyst Magazine.

10 min read 8th of Oct, 2018
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1.   Learn the Basics & Practice via a Demo Account

Many new and novice traders do not take the time to educate themselves and then get hurt, often both financially and emotionally when they make mistakes. Beginner traders must remember to learn at their own pace and start with the basics. Start with the terminology and learn how financial markets work, only then consider getting involved with trading strategies and analysis. One good way to get started with learning is to open a practice or demo account at a reliable online trading brokerage. Nearly every forex broker offers the ability to try their platform via a live demo trading account. These types of accounts enable the trader to place real trades, BUT with virtual money. There is no financial risk involved, and this way a trader can familiarize themselves with both the platform and new trading strategies, plus what it feels like to trade, to start to explore the emotional side of trading, without the financial risks. You want to be comfortable and confident with what you’re doing before diving in with real money. A demo account is the absolute perfect way to do just that. It is only possible to read and learn so much from external resources, but it’s not until you put what you’ve learned into practice that you comprehend what you’ve learnt. Opening a demo account is highly recommended and encouraged before opening a real, live forex trading account. Also, testing out multiple forex broker demo accounts is a great way to conduct a Forex broker comparison, in order to find the best forex broker to trade with, for you.

Top 3 Forex Broker Comparison

1
of 28 Forex Broker HYCM
Currency pairs 69 Currencies
Max. Lever 1:500
Trading size Micro-Lot
Minimum deposit $ 100
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 28 Forex Broker ETFinance
Currency pairs Currencies
Max. Lever 1:30
Trading size Micro-Lot
Minimum deposit £ 250
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 28 Forex Broker FXTM
Currency pairs 51 Currencies
Max. Lever 1:30
Trading size Micro-Lot
Minimum deposit £ 10
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.

2.   Don’t Get Too Complicated with Strategies

When trading forex it can be easy to get caught up with all the latest strategies and trading methods. It can be enticing to drop your existing strategy and try something new and improved. But the best advice we can give you is to research and learn just one strategy that is known to show results. There are countless strategies that return a profit, the key is to learn one and stick to it. Too often, beginner traders switch their trading strategy because they have some losses. There is no strategy that produces only profits, you will lose some and win some, so keeping a consistent strategy can result in the latter.

Top 10 Forex Trading Tips

One of the best forex tips for beginners is to try the “Long Term Breakout Trading” strategy. This trading strategy is one of the simplest trading strategies that work. The premise of the strategy is to buy breakouts on the chart to new highs and sell to new lows. Most traders can’t do this because they believe they missed out on the move and want to wait for the price to pullback, but often times the price will just keep moving up if it’s a strong move. Therefore, if you focus on long term breakouts and time your entries with certain momentum indicators, the trade can be quite profitable.

3. Be Realistic & Don’t Give Up!

Many traders who start trading believe they will start making consistent profits straight away, with the dream of quitting their jobs and working on a beach. While traders do have the potential to make significant profits, this will take time, hard work, and capital to achieve. It’s important to stay grounded and realistic while not getting overwhelmed. There will be all kinds of learning processes and mistakes along the way, but if you stay realistic, in the end it is possible to reap the benefits from forex trading.

Furthermore, a key to forex trading is to practice, practice, and practice. Everyone’s heard the saying “practice makes perfect” and this saying couldn’t be truer than with trading forex. This is probably the most important tip out of all the forex suggestions for beginners, because without practice how can you expect to improve at trading. No matter how many times you fail, you must learn from it and keep practicing. If you prefer to practice and learn without losing substantial amounts of money, you can open a “demo” trading account as highlighted above.

4. When in Doubt, Sit it Out

Sometimes, part of being a successful and consistent trader is to do nothing at all. While this approach to trading may seem too simplistic to be effective, the truth is that some of the most successful forex traders and investors make only a handful of significant trades a year. This type of trading strategy is called a long-term hold strategy and will often provide a higher return than a more active trading strategy. Active traders can easily get caught up with the constant price movements of the market and make poor decisions when the price moves. However, traders with a longer-term view often have a better understanding of the overall market trend and are potentially more likely to make winning trades. Also, long term trading can be less stressful than short term trading. Active traders can easily become overwhelmed and stressed, which leads to poor decision making resulting in losing trades. Something to keep in mind in regard to this trading tip is that some forex brokers are better than others for active traders or long-term traders. Be sure to check out our forex broker comparison page to select the best forex broker for a long-term trading strategy.

5. Manage Risk Effectively

When trading forex, as an investor you must be aware of the potential risks involved. If you are not cautious or knowledgeable of potential outcomes, you could end up suffering losses too big to come back from. That being said, it’s important to never invest more than you can afford to lose. This is risk management. By doing just this, you can more effectively trade, as the fear of losing everything is out of the equation.

forex trading tips

Another risk you must manage is when trading with leverage. While trading with leverage can be quite profitable, it can also be devastating during volatile market conditions. In forex trading, leverage comes from a small investment that is used for larger trades in foreign currency. With these larger trades, traders are susceptible to a potentially greater loss. Therefore, only experienced traders should trade on leverage and only when they are quite certain of a trade and are willing to accept the consequences of a losing trade.

6. Choose Your Forex Broker Carefully

One of the most important forex tips we can give a trader is for them to select a reputable online forex broker to trade with. While there are numerous forex brokers to choose from, selecting the best forex broker for you is vital to any trader’s success. To find a selection of reputable forex brokers to choose from, check out our extensive forex broker comparison page to decide which broker is right for you.

When selecting a forex broker, traders must ensure that the broker provides a safe, secure, fair, and transparent online trading environment. The best way to ensure safety is to check whether or not they are licensed and regulated by a reputable regulatory authority. The best forex brokers are regulated by regulatory authorities from jurisdictions in the United States, Japan, Switzerland, Cyprus, United Kingdom, Malta, and Australia. Some of the best regulatory authorities include the SEC, NFA, FCA, CySEC, and ASIC.

Additionally, traders must select a forex broker that adheres to their trading capabilities and trading style. Some brokers are highly advanced and sophisticated but very difficult to trade with if you are not experienced trading forex. While other brokers are quite simple and intuitively designed to accommodate the needs of beginner traders. All in all, there are forex brokers out there for every type of trader, but it is up to you to select the best forex broker for you.

7. Find a Trading Method That Suits You

Once you have been trading for a while and have discovered what works for you and what doesn’t, you can implement the trading style and method that best works for you. For instance, if you love watching the markets and keeping up with the latest market moving news, then a long-term trend approach will not work for you. You will miss the longer-term trend due to micromanaging your trades on a shorter time frame. However, an intraday trading strategy would be perfect for you as it requires traders to remain focused and keep up with the prices and news on a smaller time frame.

Or if you are someone interested in part time trading because you don’t have time to watch the markets, then the opposite would be true, and a longer-term trend strategy would best suit your needs. Therefore, it is important to identify as early on as possible what type of trader you are and choose a trading method best suited for you. Only then will you be able to competently trade and become a successful forex trader.

8. Keep a Trading Journal and Document Your Trades

Every trader knows that the best indicator of future price movements and market trends is to look back at the past. Therefore, the same can be said for your own personal trading history. It is likely that you will continue to trade the same way and make the same mistakes in the future as you did in the past. It’s simply human psychology, we tend to repeat our actions even when they’re mistakes. One excellent tip for trading forex is to keep a trading journal with detailed notes of all of your trades. For instance, write down the entry and exit points of each trade, whether or not the trade was profitable and by how much. Take note of the date and time and relevant news on days you had highly profitable or destructive trades.

trading tips forex

Going forward, from the notes you keep in your trading journal you can look back on all the trades you’ve taken and develop a strategy specific to you. Perhaps you’ll discover a chart pattern you previously didn’t recognize. Or maybe you’ll discover that you were not following your trading strategy which led to losing trades. Or the strategy you were following just isn’t working in the current market conditions. All in all, keeping a detailed trading journal should help you with your trading.

9.   Never Stop Learning- Continuous Education

Trading the financial markets and forex is an ever changing and evolving environment. Each and every day that you trade there are lessons to be learned. You must keep continuously to succeed at trading forex. Successful traders not only study the charts and current market news, but they educate themselves via insightful webinars, online courses, videos, books, and more. You must study and practice and then study some more, as there is always something new to learn or improve at.

The forex market is constantly changing and there is no set trading formula. It takes a combination of many factors to understand what to do and how and when to place winning trades. A trader who doesn’t continue to learn and adapt will fall behind and could become overwhelmed. We are not saying, however, to study and learn everything at once, but a trader must continuously improve.

It’s not just about learning strategies and technical indicators either. A successful forex trader must also learn patience and emotional control, macroeconomic and geopolitical influences, plus much more.

1
of 28 Forex Broker HYCM
Currency pairs 69 Currencies
Max. Lever 1:500
Trading size Micro-Lot
Minimum deposit $ 100
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 28 Forex Broker ETFinance
Currency pairs Currencies
Max. Lever 1:30
Trading size Micro-Lot
Minimum deposit £ 250
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 28 Forex Broker FXTM
Currency pairs 51 Currencies
Max. Lever 1:30
Trading size Micro-Lot
Minimum deposit £ 10
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
4
of 28 Forex Broker ITRADER.com
Currency pairs 50 Currencies
Max. Lever 1:30
Trading size Micro-Lot
Minimum deposit £ 250
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 28 Forex Broker GMO Trading
Currency pairs 60 Currencies
Max. Lever 1:30
Trading size Micro-Lot
Minimum deposit $ 250
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
1
of 6 ETF Broker IG
ETFs w/ discount 1200
Custody fee 0 GBP
Min. deposit £ 0
Trading from 5 GBP
Go to Broker

74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

2
of 6 ETF Broker Fidelity
ETFs w/ discount 93
Custody fee 0 GBP
Min. deposit £ 2.500
Trading from 25 GBP
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 6 ETF Broker AJ Bell Youinvest
ETFs w/ discount 0
Custody fee 0 GBP
Min. deposit £ 0.00
Trading from 1,50 GBP
Go to IG
Risk warning: Capital can be lost. Terms and conditions apply.
4
of 6 ETF Broker Bestinvest
ETFs w/ discount 216
Custody fee 0.4% annually
Min. deposit £ 500
Trading from 0 GBP
Go to IG
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 6 ETF Broker DEGIRO
ETFs w/ discount 740
Custody fee 0 GBP
Min. deposit £ 0
Trading from 1,75 GBP + 0,004%
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
1
of 10 Stock Broker eToro
National fees £0.00
Custody fee £0.00
Intl. fees £0.00
Dep. Protection £50.000
Go to eToro
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 10 Stock Broker Interactive Investor
National fees £7.99
Custody fee £9.99 monthly
Intl. fees £7.99
Dep. Protection 50.000 GBP
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 10 Stock Broker IG Stock
National fees £ 8,00
Custody fee £ 8,00
Intl. fees 10 EUR
Dep. Protection £50000
Go to Broker

74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

4
of 10 Stock Broker Calamatta Cuschieri
National fees £ 7.50
Custody fee £ 0.00
Intl. fees £ 7.50
Dep. Protection 100.000€
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 10 Stock Broker Hargreaves Lansdown
National fees 11,95 £
Custody fee 0,00 £
Intl. fees 11,95 £
Dep. Protection 50.000 £
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
1
of 28 CFD Broker HYCM
FTSE spread 20 Points
Dep. Protection £ 50.000
Max. Lever 1:500
Min. deposit $ 100
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 28 CFD Broker ETFinance
FTSE spread 1 Point
Dep. Protection € 20.000
Max. Lever 1:30
Min. deposit $/€/£ 0
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 28 CFD Broker FXTM
FTSE spread 1.0 Point
Dep. Protection € 20.000
Max. Lever 1:30
Min. deposit £ 10
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
4
of 28 CFD Broker ITRADER
FTSE spread 1 Point
Dep. Protection € 20.000
Max. Lever 1:30
Min. deposit £ 250
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 28 CFD Broker GMO Trading
FTSE spread 1 Point
Dep. Protection € 20.000
Max. Lever 1:30
Min. deposit $ 100
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
1
of 17 Crypto Broker eToro
Crypto currencies 10
Max. Lever 1:2
Min. deposit $ 200
BTC spread 1,50%
Go to eToro
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 17 Crypto Broker ETFinance
Crypto currencies 5
Max. Lever 1:2
Min. deposit £ 250
BTC spread 1%
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 17 Crypto Broker IQ Option
Crypto currencies 15
Max. Lever 1:2
Min. deposit $ 10
BTC spread 6 percent
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
4
of 17 Crypto Broker ITRADER
Crypto currencies 33
Max. Lever 1:2
Min. deposit £ 250
BTC spread Floating
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 17 Crypto Broker GMO Trading
Crypto currencies 33
Max. Lever 1:2
Min. deposit $ 100
BTC spread varied
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
1
of 7 Social Trading Broker eToro
Underlying assets 866
Dep. Protection 50.000
Min. deposit £ 200
Max. Lever 1:30
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 7 Social Trading Broker ZuluTrade
Underlying assets 200
Dep. Protection
Min. deposit £ 0
Max. Lever 1:30
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 7 Social Trading Broker Ayondo
Underlying assets 90
Dep. Protection 1000000
Min. deposit £ 2000
Max. Lever 1:30
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
4
of 7 Social Trading Broker Tradeo
Underlying assets 122
Dep. Protection 20000
Min. deposit £ 250
Max. Lever 1:30
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 7 Social Trading Broker FXTM
Underlying assets 247
Dep. Protection 20000
Min. deposit £ 10
Max. Lever 1:30
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
1
of 9 Spread Betting Broker City Index
FTSE spread 1 Point
Dep. Protection 50000
Max. Lever 1:20
Min. deposit £ 100
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 9 Spread Betting Broker FX Pro
FTSE spread 1.5 Points
Dep. Protection 50000
Max. Lever 1:30
Min. deposit £ 100
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 9 Spread Betting Broker IG
FTSE spread 1 Point
Dep. Protection 50000
Max. Lever 1:30
Min. deposit £ 0
Go to Broker

74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

4
of 9 Spread Betting Broker Core Spreads
FTSE spread 0.8 Points
Dep. Protection 50000
Max. Lever 1:30
Min. deposit £ 10
Go to IG
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 9 Spread Betting Broker OANDA
FTSE spread 1 Point
Dep. Protection 50000
Max. Lever 1:30
Min. deposit £ 0
Go to broker
Risk warning: Capital can be lost. Terms and conditions apply.

10.   Control Your Emotions- Psychology is Key

This forex trading tip is perhaps the single most important tip we can give you. A trader may understand many forex trading strategies, all of the technical indicators and more, but if they cannot manage and control their emotions, they might as well not know anything. If you do not know how to manage your emotions you will make irrational decisions when you are angry, fearful, depressed or greedy. So, how do experienced traders handle emotion?

First of all, they never trade out of greed because this is a very strong and stressful emotion that often leads to incompetent decisions. A successful trader must maintain a stable and clear mind, so they can clearly analyse whether or not they should place a trade. Another emotion successful traders’ control is awareness. A successful trader is fully aware of the uncertainty in the forex market. They know that whatever decision they make, it can unexpectedly go against their prediction and lead to a loss. Knowing this prepares their mindset to accept losses and not fall into fear, panic or depression.

Did you know that 90% of forex traders lose money, become discouraged and quit trading forever? The primary reason this happens is because it is incredibly difficult to control your emotions, therefore psychology is a significant key to success in forex trading.

Conclusion:

Conclusion

While forex trading may seem complicated and difficult, just remember these top 10 forex trading tips and you should progress. It’s important to never give up and remember that you are in control and have the tools and resources at your disposal to become a successful forex trader. If you ever find yourself discouraged or overwhelmed while trading forex, take a step back and think of what you can do to overcome this feeling.

Refer back to this extensive list of forex tips and take control by implementing what you’ve learned. After all, trading forex is no easy task and there will be trials and tribulations, but the important thing is to keep on practicing, continue to learn, and never give up. Hold this list of forex trading tips close to your heart and refer back to it as often as needed. For if you implement what you have learned here today, there’s no doubt you will become a successful forex trader.

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