At easyMarkets we know that newbie forex traders may get lost, confused or overwhelmed with all the information available on the internet about trading. The following 5 easy tips for forex beginners are essential for anyone looking to get started in the market.
- Learn The Basics First
The markets are exciting and it may be tempting to just open a trade and jump right in. Many beginner traders start with no real background knowledge on the markets they are trading. To build a solid trading foundation, you need to take the time to learn about how the forex market works by reading some easy educational material like that found in our learn centre. Remember, everyone learns in their own way and at their own pace. Don’t like articles? Why not learn by logging onto our video library.
- Learn One Trading Strategy Properly
One of the biggest mistakes traders may make is changing trading methods too often. If you are using a logical, common sense trading method you need to really learn it and master it before you do anything else. Many beginners may switch methods because they experienced a losing trade but this is probably not the main reason they lost. Learn the basic methods of trading to decide which one suits you best.
- Don’t Panic
Being new to the markets may be overwhelming and many newbies panic when they first see their trading platform which can be catastrophic. Take your time and move at your own pace. One benefit of trading with a broker like easyMarkets is that you can receive personalised tuition from a market analyst or simply a platform tour guide to help you understand what everything means. You should also remember not to panic if a trade is moving against you because it is NORMAL. Set your stop loss in a logical and safe place so that your risk is at a level you’re OK with losing and then LET THE TRADE GO.
Don’t panic… we were all new once!
- Don’t Overtrade
You know when you get a new car and you want to drive it all the time? Trading may be the same and many new traders find themselves over excited and overtrading. Trading with high frequency may open you up to a world of emotional trading mistakes that may destroy your trading account and your self-esteem. Take it easy… the markets will still be there waiting for you tomorrow. Learn about following the news and choose set news events to trade like NFP or Interest Rate Decisions. You can view these on our financial calendar.
- Be realistic
Perhaps the hardest but most important thing for a new trader to do, is to be realistic. If you find brokers or even traders telling you that you will be able to quit your job and work from the beach with a $200 trading account then there may be something fishy about them. In fact, if a site or person is telling you that trading will make you an overnight millionaire then you need to RUN from them because they may be scammers.
It’s true that there is the potential to make large profits trading the markets but there may also be large losses too and it certainly can’t be done with a $200 deposit.
If you start seeing dollar signs in your eyes be careful as you may make a rookie mistake like over leveraging, removing stop losses or overtrading. Be realistic and set realistic goals for your trading.