Useful TIPS For Forex Beginners - by FXNET.

FxNet

Active member
137 0
Hello everyone,

For all the newbies out there, our team of experts at FxNet have written down some useful tips that can improve your day-to-day trading. Please see below:

Always put a Stop-Loss to your order​
Trading without stop-loss is one of the most common and expensive mistakes of beginning traders. Always set a stop-loss to the amount you are willing to loose for every trade, otherwise you will see your account getting wiped out in a short period of time.

Always put a Take-Profit to your order​
Not entering a take-profit can be just as dangerous as not entering a stop-loss. If you don’t enter profit targets and you just wait until it “feels” right to close the trade, then it can easily reverse and turn into a losing trade.

Don’t put too tight or too wide Stop-Loss​
Depending on your trading style as well as your time of trading, you should always adjust the width of your SL accordingly. In general, during news trading your stop loss should be wide enough to absorb the market volatility and any spread widening that might occur. Trading news with stop loss of 10 pips is almost always a losing trade. During normal market conditions, you should use wider stop losses for longer timeframes and tighter for smaller timeframes.

Don’t risk too much of your capital at once​
Another common mistake for new traders is risking too much capital on a single trade. In general, you shouldn’t risk more than 5% of your capital on a single trade. This way, you would have to have 20 consecutive losses your account to be wiped out.

Have a proper risk-reward ratio​
Choosing a risk-reward ratio depends on your trading style, but it should never fall below 1:1. A 1:1 ratio means your stop-loss and take-profit is of the same width (for example 20 pips SL and 20 pips TP). In this case, you would need at least half of your trades to be successful in order to break even. A 1:2 ratio means your take profit is twice of stop loss (for example SL 20 pips and TP 40 pips). In this case you would need only one third of your trades to be successful.

Focus you attention on selective currency pairs​
Don’t try to trade on a large amount of currency pairs. If you stick to a few pairs then you will better understand their characteristics by studying their history and you are more likely to predict their movement.

Trade with logic and analysis, not with emotion and hunches​
Being a successful trader simply means increasing your probability to win than to lose. Trading without some basic technical analysis or a trading system is not much different than gambling. There are many ways to increase the probability for a trade to be successful. Knowing even the most basic tools of technical analysis and being able to spot buying and selling signals can greatly enhance your trading experience as well as your profits.


Best of luck!!!
 

NVP

Legendary member
37,760 2,100
sorry - disagree with a few.......but then thats what you wanted ;) :-

the Take profit rule ......always let the market tell you when its time ....and why tell the broker where to stop you both ends ?

Risk reward ratio ..........why is this fixation with Ratios that mean nothing to the market and the next trade ......apply the Stop loss rule to a sensible % allocation of funds and let the market tell yuo when to exit (see above)

Selective currency pairs ............why sit on a low volaility E/U when the A/U is flying ?..........I would recommend a Trader does widen their net more in forex ....perhap using strengthmeters

N
 
 
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