With the growth of online money trading platforms offered by blockchain technologies and Forex companies that offer to help you to squeeze money from the rapidly changing currency markets, this does seem like a “green” way of making money, without investing in products and services that create greenhouse gases. While money can be made (by some) in forex, the sad truth is that there are more traders that lose money than those who actually realize substantial profits. The problem with losing isn’t just that your money is disappearing, but also that traders who lose a few deals can quickly become disenchanted with the whole game and quit playing. Instead of losing confidence and giving in to those losses, some companies suggest that learn from them and improve your game. We don’t endorse any particular company, but let’s assume that you’ve already studied, researched and come to the table well-prepared, so let’s begin from that point.
Adequate Start Up Capital
Depending on the reason that you’re becoming a forex trader might be part of the problem. If you are in debt and see forex as a kind of financial free-for-all where anyone can join and come out a winner, you’re starting on the wrong foot. Becoming a trader takes hard work AND it takes money. Just like playing the stock market or buying into cryptocurrencies. As is the usual saying, you do need money to make money. Don’t fall into the trap of jumping into trading without enough capital, losing and calling it quits. Begin trading with enough capital in your account that even if you lose a few trades, you can keep going until you achieve some nice winning moves. The more experience you get, the better your chances will be for winning back your money.
Managing Risk in Forex
If you want to survive your first few losses in forex, pay attention to managing your risk. When making trades, the first thing to take into account is securing the monies that you already have. The point here is that you want to add to your initial capital account, not use it all up. If you lose your capital, then you can’t continue to trade, so hang onto your initial startup money by using stops. When you’ve gotten to a point where you’ve made some money, then consider removing your stops.
Trading Currency Pairs
One mistake made by traders is that they try to choose turning points in pairs of currency. This is pretty tricky, but trading with the trend is a safer way to go. Watch for confirmed trends and then place your trade. Don’t rely on intuition or gut feeling, but check the charts, watch current events and do your technical analysis to know what to trade and when.
Trade Journals are Your Friends
Traders who don’t record each and every trade in their trade journal will not learn from their mistakes or from past experience. Don’t reinvent the wheel with every trade. Look at your own historical documentation to see where the losing trades went wrong. However you choose to trade, watch your risk, follow trends and protect your capital to become a successful trader.