How to avoid losing money in Forex?

[Lincoln Ferguson]

Hello, I would like to know how to avoid losing money in Forex.

[Theodore Michelson]

Hello, thank you for asking! 

Forex market experiences a high turnover of traders, as there is a big number of new traders that enter the market with their capital, but there is also a high number of traders that incur losses and are forced to leave Forex trading because of it.

In order to avoid losing money in Forex, it is necessary to take some steps in precaution. First, always do your homework in order to lower the risk of losses to a minimum. 

It is necessary to do research on the market. This means keeping track of new economic regulations, changing market conditions, and world events. All of these bear significant impact on Forex markets and their currencies.

The second step is finding a good broker, which can be found through well-renowned companies that offer their services, you should also check the broker’s history with the regulatory bodies in your country, in order to make sure that a certain broker hasn’t committed some sort of fraud.

You can do some practice trading through a practice account, which allows you to place hypothetical trades, and see their outcomes, which can additionally prepare you for the placement of the real trades.

It is also important to properly use technical analysis, while using it you should refrain from using all of its components in order to avoid over cluttering of the charts, which may confuse you, and lead you to place negative trades.