7. Don't Rely on Tools Alone
Today’s foreign exchange trading provides a whole variety of useful tools for beginners and experienced traders:
- Indicators
- Trading robots
- Trading platforms
- Mobile apps, etc.
Many successful traders attribute their success to a particular trading strategy or program. However, what works for one can be very letdown for another.
Don't try to find some holy grail. It doesn't work in any area. If you are given a scalpel of the most outstanding surgeon, you will not start performing a virtuoso operation only thanks to this tool. This requires education and thousands of hours of training.
Try different tools and choose the ones that work best for you. Rely only on your personal experience and feelings. Someone else's story will not help you succeed.
8. You Can’t Avoid Losses
Many brokers try to keep silent about this, since the truth is very unattractive. But you shouldn't be afraid of losses. Just take them for granted and learn how to work with them.
If it was possible to trade with no losses at all, then speculation in the market would become impossible. However, it is not your job to avoid losing streaks. Your goal is different: to make the total volume of your winning trades exceed the volume of unprofitable ones. This way you will still make money even if you have unsuccessful positions.
There are two powerful ways to tip the scales in your favor:
- Exit unsuccessful trades in time to minimize losses;
- Hold good trades for as long as possible to get the maximum profit.
That's the whole secret. As soon as losses become an unpleasant but inevitable part of your daily trading, your financial decisions will become more balanced and the chance of success will begin to increase.
9. World News Is Not a Panacea
Tracking economic and political events around the world is an integral part of a successful trading strategy. However, don't rely on the news completely. If you trade on the major trend, then it is unlikely that one news release can greatly affect your positions. Large banks and brokers, who are called market makers in Forex, know about the majority of important indicators long before retail traders and continue to keep the market in the mood they need.
Yes, important news can cause noticeable fluctuations on the chart, but they cannot cause a collapse of a growing market, and vice versa.
Many experienced traders use major news releases to do just the opposite: they close their trades ahead of events or adjust their exit points.
It is up to you to decide whether you will trade on the news. But remember that rising unemployment rate in the US does not mean that the dollar will fall sharply. The market responds to the reaction of traders, not the news itself.
Well, these are all the tips for newbies that I wanted to share. Hope you find them helpful. Good luck!