This is a list of forex trading tips born out of my over 12 years of experience in forex trading.
The world is full of smart-poor people; even in forex, there are many smart poor traders. Do you know why? Most traders are drowning in knowledge yet starving for wisdom.
and a big part of becoming a successful trader is unlearning lots of concepts you were taught by people who didn’t know what they were doing either,
too much ineffective knowledge will get you stuck, but the right amount of wisdom will free you.
In light of that, let me share with you some expert forex trading tips from my wealth of trading knowledge, a journey I started over 12 years ago.
Below is a list of tips for successful forex trading that you must always have at the back of your mind.
- Before You Use any Expert or Robot, Make Sure To Backtest and Try It Out on A Demo Account.
- Beware Of Scammers and Curb Your Greed!!
- Forex is a Game of Probability
- Set Realistic Targets
- Only Trade Money That You Can Afford to Lose
- Trading News Event is Now More Difficult – Fundamental Analysis is Not That Rosy
- Capital is King – Use a Cent Account if You are Trading Below $10,000
- Big money is Made by Sitting and Waiting.
- Do Not Quit Your Job Yet!
- Capital Protection is Key
- There Are Many Ways To Make Money. Find What Works For You and Stick With It.
- If a Trade Changes Your Heart Rate, Then Your Position Must Be Risky
- Trading is a mental game.
- Forex Is Not a Scam
- Brokers Can Stand Between You and Success
Before You Use any Expert or Robot, Make Sure To Backtest and Try It Out on A Demo Account.
Many forex traders purchase a trading system for the first time and then use it directly on their live or demo accounts. That is a very dangerous practice.
Anytime you purchase an EA or indicator, try to backtest it with real data. Using the same robot, you can check what has happened in the past twenty years.
You must take note of the following when backtesting a trading system:
- Maximum Drawdown
- Profits (return on investment
- Number Of Trades Per Month
- Trades Accuracy
If you are ok with the backtest result, you can attach it to your demo account before attaching it to your live account. The first law of any investment is an investigation.
It will be wrong if you purchase an expert advisor or bot and don’t backtest to see the result, the drawdown, and the profit, and then immediately attach it to your live account(real money).
Even if the vendor promises you’ll make money, that is not the wise way to go about it. Before attaching it to your live account, you must test any strategy or trading system.
Beware Of Scammers and Curb Your Greed!!
Most of the time, we blame the scammers, but if we look at situations critically, the scammed person should also be held responsible.
How in the world would you give $100k to a stranger? How? For God’s sake, how does someone promise you 100% ROI every month, and you become so gullible to believe it?
Just as in the forex trading tips I shared above, if it’s a forex robot or expert advisor, make sure you test it out.
And if you are going to give your money to anyone to trade for you, make sure it’s a real person with a real identity.
You should read my article on how to invest in forex trading. In that article, I revealed how exactly a novice trader should go about forex trading investments.
Here are some of the questions you will find answers to:
- What’s the optimal amount you should invest in forex trading?
- How much monthly ROI should you expect from Forex?
- Who should trade or invest your money for you; You, a Robot, or an experienced forex trader?
- How not to get scammed or lose money in forex trading.
Do your investigation and stay woke cos scammers are everywhere.
Forex is a Game of Probability
Now to the third forex trading tip; You must know and understand that anything can happen in forex trading, and you have to accept it.
Due to random variables that are out of your control in forex, you have to accept anything that comes. Remember at all times that forex is a game of probability.
I once lost a $100,000 trading account. I was a bit silly. But no matter how good you become, there will be days of unexpected losses.
Whether you are using a scalping strategy or a martingale, a grid, or a price action, you need to know it’s all under probability.
Learn to let the probability be on your side and be willing to accept any outcome from the probability.
And that leads to the next forex tip, be realistic!!
Set Realistic Targets
A stable 20% in a year is a huge success, if you can get there, other investors will find you and give you their money.
I understand that many of us would prefer big gains in a short time, say 100% ROI in two to three months.
That’s human nature, and to be honest, forex trading is not fair because even if you play it safe, it doesn’t hide you from significant losses.
Therefore, I have also changed my philosophy recently. And that is, do what works for you. If taking huge risks is your thing, do it!!. You can become a millionaire in 1 night.
But for someone like me who manage and trade on behalf of other investors, I try to be in the middle. You can check out my account management page to learn more about that.
However, on an honest note, a 5% gain on a $1,000 account is like $50, most traders overlook gains like this, but a 5% gain on $100,000 is $5,000, and most traders dream of gains like these.
You need to start respecting the process and realize it is all the same and that starting capital makes the difference.
An excellent solution to false-increase your capital is to open an account with a broker that offers a cent account. So that if you have $2000, you can convert it to 200,000 cents. And that gives you a kind of leverage to take risks like a big-money trader.
Train yourself to think in the long term, people think growing a trading account and investing their money for 15 years is too long, but we work a job till the age of 60-70 years.
So, always remember to set realistic goals.
Only Trade Money That You Can Afford to Lose
Never think of lending money from someone in other to use the money in forex trading, hoping to make profits after 30 days to return the money.
My dad did the same thing back in 2008, he got a loan from the bank, diverted the money into my trading career, and I can tell you emphatically that I blew $10,000 in one night.
Nothing is assured in forex trading. Therefore, never use the money you can’t afford to lose to trade forex.
Even if it is your money, but your last card, if you think you can’t afford to lose it, don’t invest it in forex.
There are lots of factors that affect the forex market, war, inflation, and lots of news events.
You can’t control everything in the forex market, so you must be willing to accept anything that happens.
I’m not saying that you would surely lose all your money in forex trading. But shit happens, and you shouldn’t lose your 20 years of life savings in one night. Please!!
Trading News Event is Now More Difficult – Fundamental Analysis is Not That Rosy
Gone are the days when it is easy for you to trade the forex news releases.
I remember in 2010, I started trading the news event; it was easy, you place your trades, you place pending orders, and the market moves up and down, and you quickly take your pips.
But it is not that easy these days because brokers are saboteurs and sometimes intentionally manipulative.
For example, if you use a fixed spread broker, they may freeze your chart one minute before a particular news event, and you won’t be able to set your pending orders.
And even if you are using a variable spread broker, they might affect your trading, they might increase their spread to 30 or 40 pips, and it’s going to affect your profit while trading the news,
Not to say that you cannot trade the news event, but I’m just trying to tell you how difficult it has become and why many of us retail traders are shifting away from fundamental analysis.
Forex brokers would do anything to ensure you don’t trade the news successfully.
If you set your pending orders successfully, maybe one minute before the news event, some brokers would move or manipulate the market to affect your pending orders so that all those pending orders would be gone. Then you won’t have anything to trade with.
In short, I advise that you focus on technical analysis as a forex trader.
Capital is King – Use a Cent Account if You are Trading Below $10,000
In forex, I hear people say they want to trade with $100, or $200, I’m not saying it’s impossible, but forex was not originally open to retail traders like you and me. It was originally meant for banks, big corporations, and hedge funds.
However, a retail trader can say he wants to invest $50, $100, $200, or $1000 in forex and still be doing fine.
Let’s assume you are trading with a strategy called grid strategy, and you are using $1,000 to trade that grid strategy,
Then another trader uses that same $1,000, but he converts the $1000 to his cent account using a broker that allows a cent account, that’ll be like 100,000 Cents.
When there is a significant drawdown on a $1000 account, the trader with 100,000 Cents would still be doing fine because he has already increased his leverage so that the grid strategy will not affect his capital.
It goes to show that capital plays a massive role in forex trading. Therefore, when considering your strategy, always think about the capital that will work with it.
Big money is Made by Sitting and Waiting.
Imagine planting a seed and being upset one hour later because it didn’t turn into a tree.
Indeed, if 90% of traders can have the mentality to just sit, fold their arms and wait, then 90% of the losses will be averted.
Overtrading is dangerous; stop trying to find what isn’t there and let the trade come to you.
You would often find that profitable traders that are experts pick one setup, one strategy, and they go tunnel vision on them; they wait and wait until the money comes to them.
Good trading is meant to be boring. If you prefer to rush, go to Vegas.
Do Not Quit Your Job Yet!
This is a very important forex trading tip for beginners.
Many people want to trade but think they can’t because they have a 9-5 job; this is not true.
If you are a 9 – 5 o’clock employee, you can utilize swing trading; this is a go-to style of trading for you; it won’t require you to sit in front of a screen all day.
There are 255 trading days in a year; making $100 daily adds an extra $25000 to your income.
Therefore, make your trading fit into your schedule. Better still, you can use an indicator or an Expert Advisor.
For example, suppose you are the kind of person that has no time to trade because of your job. In that case, you can use a semi-EA that will send you an alert on your mobile phone, and you can enter the trade at that particular time, or you can use an expert advisor that will do all the trading automatically.
Do not quit your job until you are twice sure that forex is killing it for you and you are making twice your income.
Then you can quit your job, and if you think you can try to do your job and trade forex at the same time, you would have two means of income, and that is the best thing to do.
You must become an advanced trader before considering quitting your job for forex trading.
Capital Protection is Key
Before you develop wild dreams of making it big in forex trading, the first thing that must be your priority is “capital protection”.
Keeping the money along the way, especially in market conditions that aren’t ideal for your trading style.
Pump the brakes, and press the gas when the market is hot.
There Are Many Ways To Make Money. Find What Works For You and Stick With It.
You made money buying a breakout and then selling 30 minutes later; another trader also scalped that pair and made profits. A swing trader is off 25% in two months on that pair.
Regardless of the style of trading that you are using, if it’s making money for you, stick with it.
You don’t need to start thinking of other traders’ trading styles, don’t think about other people; think of what works for you, and use it perfectly well.
That will save you from jumping from one youtube strategy video or Forex robot to another.
If a Trade Changes Your Heart Rate, Then Your Position Must Be Risky
When you enter a trade, your heart rate should not change.
I remember when I started my trading journey, I took a huge loan from the bank. My dad did that for me.
As a result, I opened a lot of orders on one particular pair looking to make quick gains.
I was using an indicator and buying the dip consistently; it reached a certain point where my lot size was extremely huge, I couldn’t sleep at night, and I would wake from nightmares.
I just couldn’t sleep because I had many positions open at once, and I knew that if something went wrong, my money would be gone.
Your heart rate shouldn’t change when trading forex because you should have done all your analysis perfectly, especially your recovery strategy when your predictions are wrong.
Furthermore, you must know what you stand to lose or gain before you enter each trade. That way, your heart pulse won’t change regardless of the outcome of that trade.
You should consider reading some books on trader psychology.
Trading is a mental game.
Do you know why? if you placed 100 traders in a room and they all have a profitable strategy, the majority of them would still lose money,
because we are up against our insecurities, impulses, emotions, and other things, trading is 10% skill and 90% psychological.
Some want to take more risks, some are not risking enough, and some like to try crazy things.
If you are trading, concentrate and follow your strategy religiously.
Forex Is Not a Scam
I hear daily from many people that forex trading is a scam venture, but they are wrong; the following examples will make you see things clearly.
There are people like me who have become successful as forex traders, and there are many others whom I have helped become successful.
So, forex is not a scam; your lack of information is the problem. Quit calling that thing that doesn’t work for you a scam.
In another article, I revealed 30 truths about forex trading, and there, I mentioned that;
many people feel that forex is a scam because of the so-called gurus that lured us into trading through mouth-watery seminars or webinars and flashing dollars on the internet, especially on Instagram.
Many people have lost money to scam trading programs and brokers, and you will find such stories online.
Forex is not a scam; learn the trade, and use the right tools. Learn from honest traders.
Brokers Can Stand Between You and Success
Brokers are called brokers because they want to make you broke.
Whenever you are creating your strategy or considering your investment, always consider brokers, are they regulated? What about their trading conditions?
I remember one broker telling me I could not open and close the same trades within one minute.
If you use that kind of broker and say you want to start scalping, you will be destined to fail.
This had happened to me once before while I was trading a news event, I was using a broker that later deleted all my profits. They told me that I could not open and close a trade within one minute.
Therefore, whenever you think of trading, always think of the broker you want to give your capital to because they will be the one attending to your buy orders, sell orders, trailing stop, break-even, and everything else.
Final Words – Forex Trading Tips and Advice For Beginners
Life is too short to make too many mistakes. I have seen people lose their life savings to forex trading. Some were scammed, some were greedy, and some were inexperienced.
Because forex trading looks easy and it’s truly easy to access does not make it a get-rich-quick scheme. The most important of all these forex trading tips that I would love you to hold dear is not to be GREEDY!!.
When something promises 2000% ROI, run for your life. I prefer you spend your money buying toys than losing it all within a day.
Forex is profitable, but be careful out there.
You can check out the links below to help your journey as a trader or investor.