6 Essential Tips for the Novice Forex Trader

By: Donald Saunders

The first step on the road to becoming a successful Forex trader is training and there are a lot of different ways to master the intricacies of foreign currency trading. Nonetheless, although the basic knowledge acquired through training is essential to your trading success, it is just one part of the puzzle for your true success.

So, before rushing straight from your Forex training course into the live world of trading, here are several crucial tips.

1. Assume the correct outlook. The Forex traders who are truly successful know very well that attitude is vital and that adopting an attitude to do whatever is necessary to succeed is essential.

You can subscribe to all the tips sheets you like and listen to the so-called 'gurus' for hours on end but success is not going to come until you equip yourself with the knowledge that is necessary, carefully put together your own trading strategy and then simply get out there and do whatever your senses tell you is needed to turn a profit.

2. Pick the correct trading method. There are various different methods for predicting the direction of the foreign currency markets, and some extremely powerful software programs to assist with this task, and you will need to choose one method and stick to it.

You will need to master the skills of both charting and mapping and will have to devise your own system for judging precisely when to buy and sell. There will be gains and losses and you will find yourself questioning the method you have chosen and being tempted to ditch it in favor of an alternative method but you should resist this temptation. Once you begin chasing one method after another as a result of a trading loss you soon discover that one loss turns into two and then three and so on.

3. Be disciplined. Although this naturally follows on from sticking to your chosen trading method it is something that you need to assume in every aspect of life as a foreign currency trader. Once you have established your trading method and strategy you have to stick with it and should not permit yourself to be thrown off course by events or by the views of other people.

4. Assume the correct mental attitude. Foreign currency trading can be extremely stressful at times and the volatility of the market and the inexorable swing between profit and loss on trades may and indeed usually does produce considerable mental pressure. Learning to cope with the stresses of trading life is no less important than learning the technical aspects of trading.

5. Be willing to take a risk. A common mistake seen amongst Forex traders is the fear of taking risks. Risk and reward go hand in glove and you will not succeed if you are always avoiding risk. Taking risks does not mean throwing caution to the wind and simply diving in head first, but it does mean that, having calculated the risk, you are happy to trade uncompromisingly based upon your knowledge of the market and despite the risks.

6. Make your own trading decision. It is important that you focus your attention when it comes to trading and that you are not diverted from your course by the views of other people. You will be rubbing shoulders with individuals who are more than happy to offer you the benefit of their advice but you need to remember that the majority of them will do nothing more than talk a good trade. The truly successful traders are a rare breed and they steer their own vessel.

Rushing into Forex trading without the necessary training is an extremely precarious game but, having acquired the necessary knowledge, success will depend very much on your capacity to set a course and then steer to it regardless of anything that may come along to throw you off your course.

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