Extracted Posts

Anything that involves money and the possibility of losing it becomes naturally risky. Moreover, the forex market is notoriously volatile where a number of factors can impact the currency prices which may turn your planning upside down. However, with the right approach it is possible to earn profits.

No matter how much information is available or how well prepared we are, unfortunately there isn’t any guaranteed way to know if a trade is going to be a winner or a loser. If it was so, no one would ever take the trades that they are going to lose. Trading is not about “never-losing”, it’s about minimising the losses and maximising the profits.

I only trade EUR/USD and GBP/USD. I believe in mastering the pairs instead of trying out everything.

Don’t start trading just because you want it. Be well prepared whether it is about your knowledge, skills or funds. Most new traders invest the money which is important for them in the hope that they will grow it through trading. Remember that as a beginner the possibility of you losing the money is always higher than you earning the money. Therefore, always set aside the funds which you are comfortable losing.

@Kim86 There’s a general rule in trading which states that risking 2% per trade is enough. You can risk less than that if you want, the idea is not to exceed your risk tolerance. Moreover, the most important risk management strategy for me is using stop loss and avoiding the trade setups which I am not clear about.

Stop loss is the most essential mechanism to minimise the downsides of a losing trade, infact I always pair it with trailing stops to increase its efficacy. It ensures me that if the price of a currency dips to a certain level I won’t lose more than the level I’ve set my stop loss at.

I agree that it’s the most complicated financial market. However, I still feel that there's a way to make money from it if you consistently keep practicing. Maybe it’s not working for you because you are heavily relying on technical analysis which isn’t enough. Try to focus on price action and understanding the fundamental factors that affect the currencies. Don’t try to go all in, master one or two pairs only, you’ll do pretty well.

Trading is about making up your mind, no matter whether you are making a loss or a profit. When you make a profit, you must not become greedy and overtrade. When you make a loss, you must not get frustrated or sad that you try opening positions just to recover your losses. Just make up your mind to not distract from your trading plan and it will get easier.

It’s one of the best books I have read on trading psychology.

Another excellent book on trading psychology is The Psychology of Trading: Tools and Techniques for Minding the Market by Brett N. Steenbarger

Start with a demo account. Learn some trading skills and create trading strategies. Stay there for a few months and track your performance. If you do well, then switch to a live micro trading account.

Demo trading is essential before putting your hard earned money at stake. Meanwhile, keep a track of your trades and focus on making consistent wins. New traders should spend at least 6 months on demo trading and then consider whether to switch to real trading, depending on their perfomance.

Having basic trading knowledge is not sufficient to become a profitable trader. But it is good enough to start. But before you step into the live market, cover your forex education with the help of online resources and practice demo trading for at least 6 months. Later, after you hone your technical skills, you can start trading with minimal risk.
You can take help of the following resources if you wish-
Babypips
Investopedia
Bloomberg
Online educational platforms like Coursera, Udemy and edX

Some of the best forex trading channels for newbies imo are-

- Bulls on Wall Street
- Warrior trading
- Karen Foo
-AlphaTrends
-Rayner Teo

For me, music and trading can’t go well together. As trading requires intense concentration, I can’t focus when I am listening to music.

Candlestick patterns like Doji, Harami, or Marubozu are some of the best financial tools that can help traders predict the future price movements as they give information of market sentiments. But you should avoid making decisions purely based on trends. Instead, make use of other instruments and tools to verify your predictions first and then take a decision.