Forex Trading for Newbies
If you are new to the world of Forex Trading, you might be having some issues with making profits. Yeah, the fact of the matter is that trading currency pairs, while it can be highly profitable, is not very easy. There is a lot of skill, knowledge, and experience that is required if you plan on being successful.
A big issue when it comes to Forex trading for newbies is that they just don’t know what they should and should not do. There are a lot of don’ts in FX trading, things that you as a newbie need to avoid doing at all costs.
Today we want to take you through some tips on Forex trading for newbies, various things that you should never do and avoid at all costs. Today’s lesson actually comes to us courtesy of Andrew from Income Mentor Box, one of the world’s most reputable and trusted day trading academies. Let’s take a closer look at all of the things you need to avoid doing so you can stop losing trades and start making money.
Forex Trading – Avoid Short Timeframes
One of the most important tips that we can give you as a newbie to Forex trading is to avoid short timeframes. Trades can be as short as 5 minutes or positions can be open for days. As a beginner, you should avoid trades that are open for short periods of time. You may want to start with 1 hour timeframes.
The reason for this is because trading with short timeframes is much harder than with longer timeframes. With short timeframes, you have to be much more conscientious of what is going on and you constantly have to watch your trades.
Because the timeframes are so short, things can change for the better or worse in the blink of an eye. Therefore, as a newbie FX trader, it is strongly recommended that you stick with longer timeframes, at least 30 minutes, but ideally 1 hour and up.
Don’t Try to Learn Everything about Forex Trading at Once
One of the biggest mistakes which newbies in Forex trading make is to try and learn everything at once. Now, of course it is good to have a solid base of knowledge when you want to be a currency trader. Yes, the more you know, the better you will be.
However, the issue here is that there is a lot that goes into trading FX, like a serious amount. Between all of the indicators, the terms, technical analysis, fundamental analysis, various markets and pairings, and tons of trading strategies, there are thousands of things to learn about Forex trading. However, there is simply no point in trying to learn way too much at once.
It’s like cramming any sort of info before a test. If you try to cram too much info into your brain at once, you probably won’t retain any of that info. You’ll try to learn so much that you’ll forget everything. Therefore, it is recommended that you take things slow, start with the basics, master a single good trading strategy, and then go from there.
Don’t Overtrade FX
Another big mistake which many newbies to Forex trading make is to overtrade. In other words, some people will end up placing dozens of trades in a day and have way too many of them open at once. Folks, think of it like having children.
One child is relatively easy to care for, but the more kids you add to the mix, the harder things get to manage. This is exactly the same as in FX trading. The more trades you have open at the same time, the less attention you can pay to each trade.
As a newbie, it is recommended that you place no more than 3 trades at once. Having more than 3 trades open at any given time will make things way too hard to manage. Start small, and as you gain more experience, you can have more trades open simultaneously.
Avoid News Trading in FX
Something else that you should avoid doing at all costs in Forex trading is to use the news to trade. Yes, news and economic reports can be super useful when you want to trade currencies.
If you see a news report that implies that the USD will raise in value, that’s a valuable piece of info that you can use to your advantage.
However, while this sounds very easy, it’s actually much easier said than done. You really need to be a pro to do this successfully. You have to know how to read the news, when to read it, how to interpret it, and how to translate those findings to successful trades.
As a newbie, it is strongly recommended to avoid this at all costs. Once you have some experience under your belt, this is when you can start news trading.
Don’t Just Keep Trading in the Face of Constant Losses
The other big mistake that we want to talk about in Forex trading is when newbies just keep trading and trading, even in the face of constant losses. Sure, if something is working and it isn’t broken, then there is no need to fix it.
However, if you keep trading and keep losing, then something is clearly wrong. Maybe you don’t know enough about FX, maybe you are trading at the wrong times, you could be trading the wrong currency pairings, or have other problems too.
The fact of the matter is that if you keep losing time and time again, then you need to stop. We are not saying that you should quit for good, but you do need to take a step back and revaluate your plan. See where things are going wrong, get some more knowledge in your arsenal, and then make a new Forex trading plan.
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Forex Trading for Newbies – Final Thoughts
The bottom line is that when it comes to Forex trading, newbies do need to be careful. If you follow the tips as outlined above, it should bring you one step closer to being a Forex trading pro.
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