51 Beginner Questions & Tips [Expertly Answered]
If you want to see the best forex trading for beginners resources all in one place, then you’ll LOVE this list.
We have reviewed 51 questions from beginners and added our top tips to them.
Then expertly answered them to make this the last page you read about the forex basics.
To make this even better for you, we’ve categorised the questions.
So you can jump straight to the topics you care about most and maybe even learn one or two things extra along the way.
After breezing through this complete list, you’ll achieve pivotal insight into the forex markets.
Becoming a forex trader.
Check it out:
Use the jump links above to go to each section easily.
What Is Forex Trading?
Forex trading is short for foreign exchange.
This is where participants in the forex markets to buy and sell currency and make a profit.
It is also possible to make money when the currency pair falls by shorting the asset.
Like buying and selling stocks:
You buy one currency with the intention for it to rise in price – thus giving you a profit.
They work the same.
There are hundreds of forex pairs available to speculate on.
This gives a broad opportunity for people who wish to make money.
Then on top of this – you have forex pairs that correlate too – which can make your job easier.
In fact, every single day there is a total volume north of $5,000,000,000,000 (trillion) each day.
However, this is a combination of all transactions, not just vole by speculators.
- Farmers hedging their prices
- International exporting and importing
- Speculation (what we do)
- International business transactions
With that said, the forex markets are the most actively traded globally.
The best thing about is that it is open 24-hours a day 5 and a half days a week.
The forex markets open on Sunday evenings.
Which has the lowest liquidity and not much action occurs during the Sunday session.
Then finishes in the US session on Friday evenings which is around about 9 p.m. UK time.
This opens up a global opportunity and allows people to trade at any time of day.
Whether they want to trade either before work, after work, or during lunchtime.
If you are a retail trader that wants to trade part-time.
Most importantly, it allows traders to trade as often as you want.
How Forex Trading Works
Currency trading is different from what you would expect from the stock markets.
There is no centralised exchange like there is with the stock markets (LSE, NYSE, FSE etc.).
Instead, forex is traded over-the-counter (OTC) between other traders around the world.
Also, currency is traded in what is called a “lot”.
A lot is the size of the currency trade – for example:
- 0.1 lot = 10,000 units of currency
- 1 lot = 100,000 units of currency
- 10 lots = 1,000,000 units of currency
This is to make it easier when buying and selling currency pairs.
Instead of 1 trader looking to buy EUR for 495,550, they would need someone to sell the equivalent to them. Not exactly an easy figure to work with.
Instead, the trader would issue a buy for 5 lots of EUR, which can be instantly matched and traded.
For all of this to work, as a retail trader, all you need to do is your analysis and place a trade.
The exchanges do all the heavy lifting for you.
Who Is Forex Trading For?
Trading forex has no prejudice to anyone willing to put in the hard work.
Compared to investing in stocks, you’ll find that most forex traders prefer to trade shorter forex trading timeframes and day trades.
Forex as a skill is not difficult.
It is the emotional side and mental fortitude that trades must have to succeed.
If you are fearful of losing money – then this is not for you.
How Many Forex Pairs Are There
There are 180 recognised currencies used across 192 countries.
However, in the forex markets, you are offered around 70 or so pairs to trade from.
This is due to liquidity.
There are in fact 7 major pairs which consist of:
It is these 7 that generates roughly 85% of the volume in any given day.
When Are The Forex Trading Sessions?
There are 3 active sessions, Asia, London and New York.
The overall foreign exchange market is open from 22:00 GMT on Sunday through to 22:00 GMT Friday.
The opening and closing times are (in GMT):
- Tokyo (Asia) – Opens at 12:00 AM GMT | Closes at 09:00 AM GMT
- London – Opens at 07:00 AM GMT | Closes at 03:00 PM GMT
- New York – Opens at 12:00 PM GMT | Closes at 09:00 PM GMT
This is when market makers are filling new orders for the session open.
This is why you normally see a rush of volatility during these times.
How Many Forex Trading Days In A Year
Each year is different.
You want to think that each month provides an average of 21.6 trading days (52 weeks x 5 days/12 months).
However, with national holidays added to the mix, it is a little less.
Is Forex Trading Like Gambling?
It depends on what spectrum of the gambling world you are thinking about.
If you mean someone who just bets on an outcome with a gut feeling and no research, then no.
If you mean a professional gambler, who goes through sports stats and data.
That is used to generate an idea to place a bet with the highest possible chance of winning.
The truth is:
As a beginner and a gambler, you’d probably have the same success rate.
The only difference is that a beginner can gain experience.
They would use this to develop their edge.
At the end of the day, the only similarities are the element of risk and losing some (or all) of your capital.
Is Forex Trading Legal?
It is legal in most countries, however, some have restrictions due to their local laws.
This could be with restrictions on providing leveraged products.
Apart from this, you are only buying and selling currencies that can be exchanged freely anyway.
Is Forex Trading Safe?
In terms of regulatory measures and as an asset, yes.
You are buying and selling global currencies like the Euro, the Japanese Yen and the US Dollar.
Is it risk-free? Of course not.
Is Forex Trading Real Or A Scam?
Forex is far from a scam.
You are buying and selling the price differences from global currencies.
The scams come from people wanting you to invest with THEM. Either through their “account management” services, forex signals or copying their trades.
All of the above require regulation in the UK.
It would be most wise for you to learn how to trade and manage your funds personally.
How Difficult Is Forex?
Forex starts off being difficult because you are learning a new skill.
Remember learning how to drive, or riding a bike?
That started hard, right?
With more practice and the right currency education – it becomes a life skill and makes it so much easier.
Is Forex Trading Recommended For Beginners?
Everyone is a beginner at something at some point in their life.
No one comes out of the womb buying and selling EURUSD.
So, if you learn the basics and are still interested in the subject – then give it a go, 100%.
This could be a turning point for you.
By gaining a skill that could replace your current income full-time, or grow your savings.
You are free to do as you desire.
Forex Trading For Beginners
So if you’re an absolute beginner and you have no clue where to start, then this section is for you.
We are going to go over exactly the baby steps that will give you an overall idea of the foreign exchange markets.
Now as a complete beginner your focus is about understanding the terminology.
This will provide two things:
The first thing is:
If you learn the basics and you still enjoy it.
Plus you still want to learn more.
Then that means that you’re still enthusiastic about the subject.
Which is going to help you when you’re learning about the strategies.
Not only that but when (not if) you make a losing trade – you won’t be disheartened about it as much.
By learning the market lingo at the start, you are not going to be questioning yourself what is going on.
The best advice that you can have as a beginner who’s looking to start is:
To simply go and grab a jotter or something to do write stuff down;
And absorb as much free information available.
You can look on YouTube, Google, or even our website for free information.
You must immerse yourself into the subject.
Because at the end of the day, as good as it is to learn how to trade forex.
It is much better to practice and make a profit from it.
You do not want to be somebody who is stuck in a learning loop.
Where you are searching for new ideas, new strategies, and new ways of being able to trade the markets.
Otherwise, you’ll always be at square one every single time you start a new strategy.
How To Start Forex Trading?
Starting is super easy.
After you have learnt:
- The Basics
- You’ve learnt the basics of fundamental and technical analysis
- You’ve learnt different chart & candlestick patterns
- Practised on a demo account and you have been doing it successfully…
- (You want to practice at least a 1,000 trades or more. Using the same strategy so you can fully engross yourself in how to trade that strategy).
Only then, when you are ready and have gained experience, will you be using your own money.
To get started you need a forex broker.
All you have to do is simply apply for an account which can take a few hours to get verified and open.
After depositing funds with the broker you will get access to the markets.
Whether it’s through their online platform.
(which can be a piece of software and mobile app web application by the browser).
Or it could be an extension of the MetaTrader 4 platform.
This is a popular platform offered by brokers.
Which is a software that allows you to customise every aspect of the trading platform.
How Much To Start Forex Trading?
The more the better.
Starting with a low amount for the first time can be very difficult for most beginners.
This is the reason why so many fail in the first place.
Ideally, you want to start with at the very least, £1,000, even then to do small trades as a more realistic “demo” account.
What Is The Best Time Of Day To Trade Forex?
London Open and New York Open are great times.
This is where most of the liquidity is placed during the day, giving you ample opportunities to trade.
Also, because there is more volume between these times – it means cheaper trading because spreads will be tighter.
What Is The Meaning Of Spread Of Forex Trading Market?
The spread is the difference between the bid and ask price, or buy and sell price.
The spread is essentially the fee charged between the broker and the client.
The best way to imagine this is below:
Bid Price: 1.0110 / Ask Price: 1.0115
You can see there is a 5 pip spread, this is the cost of entering that trade.
What Is The Best Forex Trading Strategy?
How long is a piece of string?
Truthfully, the best strategy is one that you are most comfortable with and fits your style of trading.
A successful trading strategy from one trader does not mean you can replicate it to their level of success (not immediately anyway).
You have to find out what type of trader you are, learn the basics and then build up to a trading strategy.
What Is The Most Reliable Forex Indicator?
Like strategies, it’s a preferential thing and depends on the strategy you want to implement.
A good indicator, that is a jack of all trades is the Ichimoku indicator.
Which pretty much covers all aspects of trading.
If you like using Moving Averages, then you should check out the Hull Moving Average.
Can Fundamental Analysis Help With Forex Trading?
Fundamental analysis is PIVOTAL if you want to succeed long-term as a forex trader.
I cannot stress this enough.
Imagine being able to understand where the markets are moving towards.
Where the strength is and where all the “smart money” is buying/selling.
You don’t get this info. from technical analysis.
Traders that master both fundamentals + technicals are the most profitable forex traders long-term.
And outperform retail traders.
What Are The Best Forex Trading Platforms?
For most retail traders, the best platform to use is the Metatrader 4 platform.
You can customise every aspect of the platform without restrictions and every reputable broker provides too.
With customisable features, you can also set up mobile notifications to alert you when trades are executed/closed or when a price hits a certain level.
This is great if you are working on other things, or out of the house.
Do Forex Robots Work?
Fine-tuned forex robots (also known as Expert Advisors(EAs)) do work, we have tested hundreds of different EAs.
Forex robots are programmed to follow specific rules and to trade on your behalf.
This is great if you have a strategy that can be programmed and automated quite easily – for example, scalping strategies can do quite well from this.
However, a lot of forex robots are representative of their past performance – not real-market live trading, which you must be cautious about.
How Reliable Are Forex Signals?
Forex signals are a bit of a taboo.
They are aimed for people looking to get a quick return without putting in the effort to learn to trade.
Forex signals are aggressively marketed with high percentage wins, guaranteed income and high returns each day.
99% of signal providers are NOT regulated, so what does that tell you?
Just learn to trade the markets if you are interested.
If you are not interested in learning but want to grow your money – seek professional financial advice. Not someone off Instagram.
How Long Does It Take To Learn Forex Trading?
This depends on how intensely you work and educate yourself on the topic.
Nothing is stopping you from consuming the right information, learning the basics and developing a style, then uncovering a strategy within a space of a week.
With the knowledge gained in that week, nothing matters unless you gain the experience – this is the time consumer.
Experience can’t be taught.
Ideally, any trader that will succeed will have made 1,000s of trades on a demo account first focusing on a profitable strategy.
Then another 1,000 or more trades, practising with small stakes that are affordable to trade with.
Only then, after 2,000-5,000 trades made and experience in a live market – will you have enough to start risking your money properly.
1,000 trades sound like a lot, but if you day trade it’s not.
Are Forex Trading Courses Worth It?
There are some very good courses out there, equally, there are some that have just copied and pasted other websites.
A good scope to start with is start off using free resources.
95% of the courses out there only cover the same info. as free resources online.
With enough searching, you can uncover the gems and learn all the golden nuggets.
Where To Learn Forex Trading?
Good news for all new and aspiring traders – in this day and age, information is freely available on the internet.
You can search Youtube for forex videos, although most aren’t that great.
You can Google different courses online, but don’t pay for a course – most of the basic stuff can be found for free.
For example, if you are a complete beginner and want to learn in a fun way – babypips.com is a good resource for beginners.
It doesn’t provide any actionable lessons – in other words, you won’t become a trader after reading their course.
However, you will have the forex basics explained to you in a beginner-friendly manner.
Or you can view our free forex course. Where we go over everything to take you from complete beginner to trader.
It’s your choice!
Is There Any Risk Factor Involved In Forex Trading?
Ever heard the saying – “you have to speculate to accumulate”?
Well, that is about risking your money to grow it.
Risk is the business traders are in.
Traders want to risk a certain percentage of their account to grow it.
Risk is easily managed though, and the good news is you can develop a risk management plan for your tolerance of risk.
Actually with any form of investing there comes risk.
Forex is seen as one of the risky Investments people can make and that is quite unfound.
The main reason why people believe that investing in currency is risky is not because of the currency asset itself and risk that brings;
Instead, the offerings by their broker through margin which gives it its risky status to most people.
Many beginners unknowingly enter the forex markets using margin and they are fearful of the so-called volatility that the currency markets are known for.
In fact, equity markets are much more volatile on a daily and annual basis.
Of course, like all Investments forex carries a risk of losing the entire investment capital that you begin with.
Also through margin carries a risk of owing the broker money if you end up going over your margin amount.
Thankfully, and responsibly, in today’s environment and with regulated brokers this is a rarity for retail traders.
This is because the level of protection that is offered to retail traders is significantly higher than it was 5 years ago.
For example, now most brokers will have a hard stop loss if you were to close out a position at a complete loss and your balance would be zero.
By entering any trade to a broker you are also agreeing to the broker that at any point where there is a margin call required that you will be obliged to pay that to cover any shortcomings of your current traits.
This is why practising and using stop losses with all of your trades is vital.
Even if they are mental stop losses you can simply set up an alert to notify you by email text message or in-app notification.
So you can adjust any positions quickly.
Is Forex Trading More Volatile Than Stock Trading?
Everyone mentions how volatile forex is.
This is false.
And people that mention it are exposing how the education industry is regurgitating what everyone is saying.
Below is the chart of the S&P 500 vs. EURUSD since 2018.
By looking at this chart, you tell me – which is more volatile?
The orange line (S&P 500).
In fact, the S&P 500 has an average daily gain or loss of around 2.5%
Whereas the EURUSD is roughly 0.5% up or down per day.
So why do so many get it wrong?
Because they are looking at LEVERAGE as VOLATILITY.
Which is obviously incorrect.
Buying and selling forex through leverage are amplified by the amount of leverage given to you.
The asset itself is NOT volatile.
The leverage you take out on the asset, GIVES you the volatility.
Why Do People Lose Money In The Forex Market?
Losing money in the forex markets is all part of the game.
No one trades the market over a longer period without losing trades.
If the question is, why do people lose all of their money in the forex market – then it’s because of poor risk management and lack of knowledge to trade the forex markets.
Is Forex Trading Profitable?
Now, this is a good question but it’s very very easy to mislead people and without the right information many can get the wrong impression.
Currency trading is profitable, because institutions, hedge funds etc. will speculate on the forex markets to obtain a profit.
Now, they wouldn’t do this if it was not profitable, right?
What you must understand is that you will not walk into this arena becoming instantly profitable – however, over the next few years, if you have to put in the serious hard work – you will be profitable.
Just like learning to play golf – you may have no idea about distance, what clubs to use at different circumstances, or even have a good swing yet.
If you expect to go out and get a professional score – you will be greatly let down.
Unless you have the luckiest round of your life.
This means you have to understand how to read chart patterns or candlestick patterns, but you have to understand what the fundamentals are doing to open up a bigger picture for you to trade through.
Yes, of course, it’s easy to relate everyone to a chart and make sure that it is meaningful through a specific chart pattern that can provide you with an opportunity.
Yes, it is a lot easier and more fun to learn about technical analysis. Yet it is the fundamentals that drive the forex markets;
It is the fundamentals that drive exactly where economies are moving towards and;
It is this data that the fundamentals provide you in black and white to be able to interpret and understand exactly which side of the market used to be on.
At the end of the day as a forex trader, you want to have everything stacked in your favour.
If you’re only going off pure price action or candlestick formations then you are only using half of the picture needed to decipher exactly where to take advantage of this knowledge.
Just by knowing this will increase your profit potential favourably.
Can You Make A Living Forex Trading
Absolutely, but not how it’s advertised on Instagram.
Every time you take money out of your account, you impact your ability to increase your position size.
So when you are on a winning streak, taking money out of your account will impede you.
Not only that, but it’s also not as easy as it sounds – because after you take money out of the profits.
If you take it all out, then you are back at the starting balance.
Which means you have to perform the same again to take out profit next month and so on.
By having this cycle, your account will not have much room to grow and therefore earn you even more potential profits.
This isn’t a great idea if you want to grow your account over time.
Can You Start Forex With No Money?
Only when forex brokers offer a special “No-deposit” deal. However, this comes with the value to be traded XX amount of times.
If you opened an account with a £50 no-deposit bonus, they may want you to do 50x turnover – which is bonus lingo for:
We’ll give you £50 but before you can withdraw that £50 you must trade £50×50 = £2,500 before we will give you the £50 in cash.
Sounds unlikely, right?
Apart from this “no-deposit” offer. You cannot start forex with no money.
Money is the fuel that is needed to trade with.
No money, no trades.
Can I Start Forex Trading At $10?
No, $10 won’t even get you to margin for a micro-lot (0.01).
Instead of focusing on investing as little as possible, to begin with, open a demo account.
Tip: Make sure you use the amount of demo money you would trade with in real life on a demo account.
Don’t open a demo account with $100,000 – when you want to open an account with $1,000.
You need to be aligned and prepared to transition from a demo to a live account. Big wins on a demo account don’t equal success on a live account.
Is Forex Trading As A Part Time Occupation Worth It?
Being able to grow your hard-earned money in any way possible is always worth it.
Whether it’s investing in the markets, forex, or setting up a side-business.
You have to take the focus away from forex being a form of guaranteed income like a normal 9-5 job.
There is no guaranteed income.
Only profits that you have generated that month.
You have to treat forex as a business.
Is Forex Trading Expensive?
Not any more.
Thanks to advances in technology, connecting to the forex markets has never been easier.
Nowadays, all you need to get started is a device that connects to the Internet and a forex broker account.
The forex broker provides the platform and access to the forex markets at a cost of either a commission per trade or through spreads.
Both of these fees are TINY compared to 5 years ago when EURUSD was 3-5 pip spread.
With these types of payments, they are taken directly from your account – so you are never in a position where you owe more money to a broker due to a spread or commission charge.
This reduces your costs if you meet the broker’s requirements.
Why do they do this?
To get you to trade more.
Forex Vs Stocks
So why do people choose between the two?
Forex is seen as an active approach to trading, whilst stocks are seen more as a passive growth.
People that learn about to trade currency instead of stocks are mainly hunting for quick wins – get rich quick, or an easy but fast solution to money problems.
Whereas with stocks, people are looking for safer, more passive, longer-term investing.
Forex Vs Bitcoin
On a trading level, they are both the same.
Forex is currencies paired with each other.
Bitcoin is paired with other currencies too like GBP, USD and EUR.
So in principle, they are the same thing.
The main difference is that Bitcoin is volatile compared to fiat currencies.
Take a look:
As you can see, the blue flat line is the “volatile” EURUSD.
The orange line is BTCUSD.
This chart shows the performance, but you can see the swings in price are a lot higher/steeper than the EURUSD.
Again, the EURUSD moves roughly up or down 0.5% per day.
Bitcoin… well, you’ve most probably heard how much bitcoin can go up or down in a single day, and that is thanks to volatility.
You can choose whichever asset you want to trade with, the same principles apply to bitcoin as they would with the foreign exchange markets.
Forex Trading Vs Investing
This is the point where people looking to grow their money split into 2 categories.
Active Traders and Passive Investors.
You can be both, but for most people – they want to be one or the other.
If you want an approach that actively focuses on taking advantage of the forex markets movements frequently, then the foreign exchange market is for you.
If you want an approach where you want to buy an asset each month, and believe that the asset is going to grow over a longer period (6 months – 5 years+) then investing is for you.
What Are The Pros and Cons of Forex Trading?
If you’re a beginner looking to learn how to trade forex then this section might help you decide if you should continue your journey.
To start with this have a look at what the cons are:
One of the main problems is the fact that you are using leveraged products to gain exposure to the market.
This intern is what creates account-based volatility for you and means that you will have a high chance that you will end up losing money because of the leverage and not the market movement.
Another problem is that people are lured into thinking that they can trade smaller time frames and take snippets out of the market.
Although this is possible, forex beginners will be lucky to profit this way straight away and will very quickly learn how hard the market can bite back.
Or beginners will simply not believe it is possible to make a profit straight away and therefore may end up losing interest in trading.
In fact, most traders that learn to trade and move on to a live account simply give up because nothing is working for them.
Now one of the main reasons why nothing is working for them is because they are only looking for particular patterns to trade with.
It is important for you to clearly understand where the market is going.
The trend is your friend until the band at the end.
Finally, one thing that can be considered as a negative is that there are a lot of countries that are unregulated and it is these countries where a lot of currency trader scams are taking place.
Scams come in all shapes and sizes.
They can be offering trading signals and education and mentorship where you can follow them and you pay them x amount of money that is non-refundable.
Most of the time these forex trader scams will take place by you simply opening a broker account with their referral link and the scammer is getting paid by the broker.
The brokers getting your money and you are getting a service.
Now, this service may be or may not be good.
Either way, the signal provider gets paid and you can end up losing a lot of money that way if you trust this person.
However, learning to trade the currency markets provides some very positive points if you’re looking to get started
To begin with, it allows you to speculate in the market 24 hours a day 5 days a week.
This means you won’t exactly be tied down to the forex markets.
You want to be trading around the most liquid times in the market where the most activity is occurring; this is normally between the London opening & the New York opening session.
This is usually where the most on for trades or most liquidity is generated during that time.
And when you think about it this makes sense.
Market makers are waking up at those times getting into work and picking up orders from their clients (institutional, hedge funds, banks, etc) to place large block orders.
Although leverage is seen as a negative it can also be seen as a positive.
This brings the barrier of entry to trade the forex markets lower.
It enables more people who wish to learn how to control the finances to be able to grow their hard-earned money into a pot of something that will be a lot more meaningful in a few years.
Remember it’s not a get rich quick scheme.
It’s all about growing your investment capital for a future date.
By using leverage and the brokers that offer cheap opportunities to enter the market through spreads and commissions this offers an alternative investment away from equities or fixed income.
Finally, it allows you to easily go long or short in the forex markets, so you can make money in any market condition. If the markets are falling, then look for shorting opportunities.
If markets are rising, then look for buying opportunities.
In summary, learning to trade currency is absolutely a great opportunity for anybody to get involved with.
However, it is not something that should be taken as a part-time job or something quite lightly.
If you seriously want to trade the markets and you want to grow your capital and get out of the learning loop that so many traders enter and never leave;
You have to take this seriously.
Forex offers an absolute limitless opportunity for you to speculate on the currency movements every single day.
One thing that you must understand for any trader, whether you are in currency, equity, fixed income, or even buying properties is some trades you will lose and some trades you will win.
If you can’t get away from that fact.
If you are completely risk-averse without ever wanting to lose a single penny when you speculate into growing your account, then this form of investing is most certainly not for you.
It is better to learn this now than later.
No matter what people tell you.
There is no way for you to have a guaranteed return in the market.
There is no way for you to have a high strike rate of 100% in the markets.
Tips When Forex Trading
Right, that was a lot of questions to get answered.
By now, you should be in a better position to understand why you should consider trading forex.
So let’s get into some beginner tips:
Trading Is NOT For An Income
Do not enter the markets with this approach, it’s a surefire way to unhinge you and all the hard work you have put into your education.
If you focus on “I have to make XYZ each month” then you’ll be forcing trades at the end of the month if you have yet to cover your bills and outgoings.
This can harm you and your account.
Instead, you should focus on growth and reward yourself from time to time.
Don’t Get Complacent
We’ve all been there when every trade is smashing the pips and pulling out profits on-demand.
Once overconfidence and complacency sets in, you will automatically start opening trades that you wouldn’t normally do and throw out the rulebook whilst you are on a hot streak…
This is when your first loss after a hot streak can completely derail all your efforts.
You may start to widen your stop loss or average in a position.
This can severely ruin your account.
Eventually, it’ll be built into your thought processes automatically!
Lock-In Your Profits
Taking profit is your number 1 goal.
So why let a profitable position go wrong?
Locking in your profits allows you to still be in a trade for even more profit potential; and
De-risk your position completely.
It’s a win-win scenario.
Forget About the Secret Success Formula
The only success formula is working smart, not hard.
Understand how the markets are traded, which patterns to find valid opportunities with and build a trading plan that benefits you.
The only way you will better yourself is by getting the experience from trading your own money.
Never Move Your Stop Loss
Unless it’s to lock in profit, duh!
But seriously, never move it away to increase your risk – it’s a terrible habit some people have and they wonder why they lose all their capital?
Don’t Chase Your Losses / Revenge Trade
Look – losing money is all part of the game.
If that unnerves you, then close this website and delete everything to do with forex.
Because if you get stuck in the cycle of chasing losses or revenge trading, you’ll be on a downward spiral to blowing up your account.
With the correct risk management and education, this will NEVER be the case.
They are highly rule-based and are the backbone of most successful traders.
You should check out our lessons on it.
Never Force A Trade
As you mature as a trader and with an abundance of experience from winning and losing trades, you’ll never need to force a trade.
However, beginners do.
If you don’t follow your trading plan to the letter when you start off, you’ll most likely be losing your trades by forcing a trade.
Also, if you are bored – don’t trade to “test the waters”.
Turn The TV Off
No news channel is worthy when it comes to trading the markets.
CNBC, CNN, Bloomberg etc. push poor content that they want you to see and hear.
This is pointless to you.
Instead, you can set up your twitter using FinTwit to get access to the latest news and data announcements for free.
Let Your Winners Run
This trading tip goes hand in hand with the lock-in your profits tip.
If your trade is on for a big run, don’t cut it short at the first take profit area you set.
Instead, perform active management and find out where your trade could go next.
Keep it open until it hits your trailing stop loss.
This is how professional trades hit large wins.
Never Double Down On Losses
You may have started to notice that a lot of these tips are focused on risk management and active trade management.
Doesn’t that tell you how important it is?
It’s also the easiest to learn.
Never increase your risk to try and recover your losses.
The Market Is Always Right
Just accept it. We have.
It doesn’t care if your indicators are telling you to buy or sell.
It doesn’t care if it’s your last £1,000 in your account.
If the market moves against your trade idea, then that should give you a clear enough message that you are wrong and to rethink your idea.
Never Catch A Falling Knife
You can see an example of this every month with the Non-farm Payrolls.
For some wild reason, trades like to try and trade this liquidity dump.
These traders want to try and catch major price moves in seconds and try to guess the top or bottom.
This is what is known as catching a falling knife.
And yes, when they get it wrong it hurts… their account.
Wrapping this up
So there we have it.
Some of the most frequently asked beginner questions to do with forex trading, answered by an expert.
We’ve even thrown in some bonus tips for you to take into consideration.
So what did you think? Do you still have unanswered questions?
Which trading tip is your favourite?
Let us know by tweeting out to us.
And finally, if you found this article useful, don’t forget to give it a quick share.