Learn to avoid typical mistakes of beginners.
If trader beginner decides to search useful information on the Internet, he will be avalanched by the large volume of knowledge. Therefore, the best option is to take it slow and to “hoover up” the experience of professionals. Here are 10 commandments for those who only starts.
1. Explore the fundamental concepts.
Many beginners leap into action, knowing nothing about the markets. For successful trading, the strong base is crucial: find time to study the mechanism of work in the Forex market, learn slang and the basic rules of behavior. Only after that you can learn the secrets of successful trading and choose the strategy.
2. Master one trading strategy very well and stick to it for a while.
One of the biggest mistakes of beginners is the frequent change of trading methods and strategies. The best variant is to master one method, for example, the price action - trading based on the price movement, and only after this to undertake something new. When you constantly change strategies and hope that sooner or later you will find a “magic key”, your false dawns will take away all your money. You shouldn't change the strategy even after several unprofitable transactions. Every method and strategy will bring a certain number of losses, and it is OK. You do not have to lose your head because of losses. To succeed in the trading, the cast-iron discipline is necessary.
3. Be reasonable in desires.
At first it is very easy to drown inflows of new information - it happens to everyone. To pass this stage with ease, find the teacher and use his experience. One teacher, one technique and a blank sheet of your mind: postpone the rest until the moment when you precisely know that you do.
4. Don't panic, when a trend is against you.
The majority of traders, especially beginners, worry too much when meeting such situation. In real trading, this problem is much sharper, than using a demo account. But problems need to be solved. You should recognize that if the market moves against you - it is OK. You shouldn't be frightened and close a position: you can lose not only money because of closing position on the lower point, you can lose really noticeable profit. The best decision is to put the Stop Loss on the given price, choose the position with acceptable risk and relax. The excessive control is not needed, you can go shopping or at the gym - just clear your mind from anxiety. Most often the best strategy does not touch anything.
5. Concentrate on price action.
Almost no one remembers, that there was a time when people traded without computers. There were no software packages, RSI, MACD and Stochastic, trade robots... but there were prices. For the analysis, they were printed on tapes or written on big boards. In this way was interpreted the change in price or price action. It is the unique “natural” method of trading. It appeared in the XVIII century when Japanese dealers invented the candle schedule for forecasting the prices of rice. And it works — it is impossible to complicate anything. Trading based on price action is successful when discipline, logical thinking and patience are connected. Here you can trade without indicators and news releases.
6. Be realistic.
This the most important thing that have to be learned by the beginner. Starting trading even with one hundred thousand in a pocket, you don't have to dream that very soon you will quit your full-time job and will move to Maldives. Something like this can be promised only by scammers. Reasonable question: Whether it is possible to earn a lot of money on trading? Yes, of course. The potential is infinite. But it is difficult, especially psychologically. Your mind will play games with you, and not really fair ones. To succeed, you have to be extremely realistic. People who dream to roll in the money, usually start playing using too big leverage... and lose everything. What's the use of it?
7. Trade little by little.
Slow and permanent movement are a key to success. Maybe it is trivial, but it is the unique truth. Frequent transactions make traders vulnerable and emotional, they start making mistakes that are harmful to the state of the account, and for a self-assessment. To earn money, it isn't necessary to make many transactions. To understand why, read about a difference between high-frequency and low-frequency trade.
8. Focus on daily charts.
The first thing you have to learn is how to interpret charts and how to trade on price action.
9. Don't put Stop Loss too low.
It is difficult, but it is important. Stop Loss have to be, it shall be at “safe” distance from the entry price. If Stop Loss is too close, it will work early, and there will be no chance to catch the movement of the market. Even if your expectations are right, you can leave market earlier than the event will take place.
10. Start with learning!
You won't believe, but there are people that start trading, without the slightest attempt to learn something. A lot of traders decide to get an education only after losing a lump of money. At first learn to trade, and then start trading. Dare to be successful!