Forex Trading Tips for Beginners

Learn the basics first                    

Many beginning traders try jumping right into the market with no real background knowledge on the markets they are trading. To build a solid trading foundation, you need to take the time to learn about how the Forex market works (or any market you’re trading) and really get a solid understanding of all the jargon, etc. before you actually dive in and start learning a trading strategy.

Learn one trading strategy, stick with it.

One of the biggest mistakes I see beginning traders make again and again, is changing trading methods too often. If you are using a logical, common sense trading method like price action, you need to really learn it and master it. If you jump from method to method because you think you’ll find some “Holy Grail” trading strategy, you are simply operating on false hope and being illogical, and you will lose money. Also, don’t switch methods just because you had a few losing trades.

Don’t get overwhelmed

It’s easy to feel overwhelmed with information and trading strategies as a beginning trader, it happens to all of us in the beginning. The best way to limit this or avoid it altogether, is to find a mentor, someone to learn from, and piggy back off their success.

Don’t freak out when a trade moves against you

This one is big, because most traders, especially beginners, freak out or over-react at the first sign of a trade moving against them. This is much more of a problem in live trading than demo trading, due to the differences in emotion between them, but it is a problem and it needs to be addressed.

A trade moving against you is NORMAL. I’ve had trades move to within 5 pips of my stop loss and go on to be HUGE winners after that. If I had freaked out and closed them out before they hit my stop loss, I would have not only lost money, but I would have lost a lot of profit too. This is the main reason why you need to let your trades play out and not close them out early ONLY because they’ve moved against you.

Don’t trade a lot.

Slow and steady wins the trading race, it’s cliché I know, but it’s so true. Trading with high frequency opens you up to a world of emotional trading mistakes that will destroy your trading account and your self-esteem.

Focus on the high timeframes 

You need to learn how to interpret and trade the price action on the high time frame before you do anything else. 

Don’t just jump in with no education

It’s always amazing to me how many people want to risk their money in the market without having obtained any training or trading education. Then later, after they’ve lost a bunch of money, they decide to get some education. This is backwards, it’s like trying to fly an airplane without going to flight school, then you crash the plane and almost die, then after all that you decide to go to flight school…many traders do this exact same thing with their trading accounts, don’t be one of them!