Top 10 Forex Trading Tips You Should Know – 2018

When beginning to trade forex, you can easily get lost or overwhelmed with all the complexities and information that comes with this potentially lucrative investment practice. You could also get lucky off 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 the ins and outs of forex trading, it can be dreadful. Therefore, it’s important to take it slow and learn what you can, 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.
  • The most successful forex traders understand and implement the forex trading tips and tricks listed below.
Forex Highlights

1.   Learn the Basics & Practice via a Demo Account

Many traders do not take the time to learn any forex tips and tricks and then get burnt 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 the market works, then you can get involved with trading strategies and analysis. One good way to get started with learning is to open a practice 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 with virtual money. There is no real risk involved, and a trader can familiarize themselves with both the platform and new trading strategies. 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. I mean, you can only 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 forex trading account. Also, testing out multiple forex broker demo accounts is a great way to conduct a Forex broker comparison to find the best forex broker to trade with.

Top 3 Forex Broker Comparison

1
of 5 Forex Broker Forex.com
Currency pairs 80 Currencies
Max. Lever 1:50
Trading size Micro-Lot
Minimum deposit $ 50
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 5 Forex Broker TD Ameritrade
Currency pairs 80 Currencies
Max. Lever 1:50
Trading size Micro-Lot
Minimum deposit $ 0
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 5 Forex Broker Interactive Brokers
Currency pairs 100 Currencies
Max. Lever 1:50
Trading size Micro-Lot
Minimum deposit $ 10.000
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 up 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 will result in the latter.

One of the best forex tips for beginners is 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!

A lot of traders who get into trading think they will start making loads of money right off the bat, with the dream of quitting their jobs and working on a beach. While traders have the potential to make substantial amounts of money, it will take time, hard work, and money to get there. It’s important to stay grounded and realistic while not getting overwhelmed. There will be all kinds of mistakes and learning processes along the way, but if you stay realistic, in the end you can reap the benefits forex trading presents.

As well, one aspect about being realistic with 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 tips for beginners because without practice how can you expect to get good at trading. No matter how many times you fail at a trade, 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 practice “demo” trading account as mentioned in the first forex trading tip.

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 3 – 5 big trades a year. This type of trading strategy is called a long-term hold strategy and will often provide a higher return than an 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 goes up or down. However, traders with a longer-term view have a better understanding of the overall market trend and are more likely to make winning trades. Also, long term trading is far 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 forex 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 all 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. By doing just this, you can more effectively trade as the fear of losing everything is out of the equation.

Another risk you must manage is when trading with leverage. While trading with leverage can be quite profitable, it can also be quite 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 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.

stocks 2

Additional risks to consider when trading forex include interest rate hikes which can be both a good and bad thing, depending on where you stand with your buy and sell orders of a currency. Also, due to the speculative nature of investing and trading forex, if investors believe a currency will decrease in value they pull out their assets, which further devalues the currency. This can cause some big problems, leaving traders who continue trading the currency with illiquid assets or insolvency from dealers.

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 so that you can decide which broker is right for you.

When selecting a viable forex broker, traders must ensure that the broker provides a safe, secure, fair, and transparent online trading environment. The best way to ensure this trading environment is offered by a brokerage, 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 brokerages 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’s up to you to select the best forex broker for you.

7.   Find a Trading Method That Suits You

This forex trading tip is similar to tip number 2, only it’s more inline with who you are as a trader. 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.

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Therefore, from the detailed 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 is bound to help you with your trading in one way or another.

9.   Never Stop Learning- Continuous Education

Trading the financial markets and forex is an ever changing and evolving battlefield. Each and every day that you trade there are lessons to be learned. You must keep grinding away and continuously learn if you ever hope 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 become better at.

The forex market is constantly changing and there is no set formula to trading so you need to be able to understand the markets whether they’re going up or down. It takes a combination of things to understand what to do and place winning trades. A trader who doesn’t continue to learn and adapt will fall behind and become overwhelmed. However, we’re not saying to study and learn everything at once, that’s not necessary, but a trader must continuously improve and take in what they can.

It’s not just about learning strategies and technical indicators either. A successful forex trader must also learn patience, emotional control, markets, currency pairs, economics, and more. The education train never stops when trading forex and you shouldn’t either.

1
of 5 Forex Broker Forex.com
Currency pairs 80 Currencies
Max. Lever 1:50
Trading size Micro-Lot
Minimum deposit $ 50
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 5 Forex Broker TD Ameritrade
Currency pairs 80 Currencies
Max. Lever 1:50
Trading size Micro-Lot
Minimum deposit $ 0
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
3
of 5 Forex Broker Interactive Brokers
Currency pairs 100 Currencies
Max. Lever 1:50
Trading size Micro-Lot
Minimum deposit $ 10.000
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
4
of 5 Forex Broker Oanda
Currency pairs 60 Currencies
Max. Lever 1:50
Trading size Micro-Lot
Minimum deposit $ 0
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 5 Forex Broker Ally Invest
Currency pairs Currencies
Max. Lever
Trading size Micro-Lot
Minimum deposit $
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
1
of 14 ETF Broker Placetrade
ETFs w/ discount 0
Custody fee $0
Min. deposit $ 5.000
Trading from $1,50
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Risk warning: Capital can be lost. Terms and conditions apply.
2
of 14 ETF Broker Betterment
ETFs w/ discount 0
Custody fee 0.25%
Min. deposit $ 0
Trading from $0
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Risk warning: Capital can be lost. Terms and conditions apply.
3
of 14 ETF Broker Lightspeed Trading
ETFs w/ discount 0
Custody fee $0
Min. deposit $ 10.000
Trading from $2,50
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Risk warning: Capital can be lost. Terms and conditions apply.
4
of 14 ETF Broker Robinhood
ETFs w/ discount 3,000
Custody fee $0
Min. deposit $ 0
Trading from $0
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Risk warning: Capital can be lost. Terms and conditions apply.
5
of 14 ETF Broker Firstrade
ETFs w/ discount 700+
Custody fee $0
Min. deposit $ 0
Trading from $0
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Risk warning: Capital can be lost. Terms and conditions apply.
1
of 11 Stock Broker TD Ameritrade
National fees $6,95
Custody fee $0
Intl. fees
Dep. Protection $500.000
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
2
of 11 Stock Broker SogoTrade
National fees $2,88
Custody fee $0
Intl. fees
Dep. Protection $500.000
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Risk warning: Capital can be lost. Terms and conditions apply.
3
of 11 Stock Broker Placetrade
National fees $1,50
Custody fee $0
Intl. fees $1,50
Dep. Protection $500.000
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
4
of 11 Stock Broker Ally Invest
National fees $3,95
Custody fee $0
Intl. fees
Dep. Protection $500.000
Go to Broker
Risk warning: Capital can be lost. Terms and conditions apply.
5
of 11 Stock Broker Firstrade
National fees $2.95
Custody fee 0
Intl. fees $0
Dep. Protection As per SIPC guidelines.
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 all of the forex trading strategies, forex tips and tricks, 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, 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 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 and thus psychology is the key to success for forex traders.

Conclusion:

Conclusion

While forex trading may seem complicated and difficult, just remember these top 10 forex trading tips and you will do just fine. 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 tricks 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.

Forex Highlights