Learning is a must before doing anything correctly right ? So please read Recommended Forex Brokers, Forex Trading in English, IQ Forex Tutorial, Chart Patterns, Candlestick Pattern, S/R Zones in Trending Market, S/R Zones in Range Market and Tradingview Free Analysis other than this money management article.
2 - Invest funds that you can afford to take a risk only, avoid loans and day to day funds for expenses when investing in forex trading
All kinds of investments carry a high degree of risk. So same applies to Forex investments which carry even much higher risk ( high rewards means risk too goes up ! ). Therefore invest only what you can take a risk with only and avoid funds acquired via loans for forex trading. Avoid using day to day expenses money as well for Forex trading.
So always remember to invest only what you can afford to take a risk with guys !
3 - Avoid News Time when scalping
During news times the price moves both ways rapidly most of the time, therefore avoid trading 15 minutes before and 15 minutes after news release. ( This is not much relevant to those who make swing trades or holding trades for days / weeks ) In order to know about the economic news type, news days and news times, you can refer Investing.com Economic Calendar ( If you are residing in Sri Lanka, use +5.30 as time to get news with your current time. If you are in a different country, adjust the time as per GMT time zone of your country/region ) or Investing.com Android or iOS application ( News with three bull heads are the major news releases )
4 - Choose commonly used currency pairs, if you are a beginner to forex trading
Stick to major currency pairs like EUR/USD, USD/CAD or GBP/USD when trading as price of these currencies do change regularly giving you many trading opportunities.
5 - Start Trading with 0.01 ~ 0.02 lot size ( or $1 to $2 per trade) & use standard leverage , if you are a beginner to Forex trading
Use 0.01 ~ 0.02 lot sizes, if you are a beginner to trading using MT4, MT5 or cTrader until you are profitable. Once you make regular profits, then you can gradually increase this value. ( If you are trading using IQ Forex, use $1 ~ $2 per trade. One succesful you can gradually increase this as well ) Also use 1:500 or 1:300 as leverage
6 - Do not enter multiple trades at once
Do not enter many trades during same time but If you are successful with trading or follows a Forex Signal Service , then you can enter several trades otherwise enter only one trade at a time. Incase you have $1000 to $5000 in your trading account, you may enter 3-4 trades at once ( with lot size around 0.01 ~ 0.05 )
7 - Please use Stop Loss and Take Profit values !
Make sure to use stop loss values ( especially those who are with small accounts with $ 10 ~ $200 ) to avoid risking loss of total account capital ( In IQ Forex this is not an issue as you will be risking only the amount invested per trade not the total account capital). You may place 25 - 40 pips gap as stop loss while 50-80 pips as take profit ( You may increase this based on your account capital and lot size )
If the term “pip” is still not to clear, please read this paragraph : One pip is when price moves up or down from fourth decimal point with all currency pairs excluding JPY currency pairs. With JPY pairs like GBP/JPY, USD/JPY one pip is when price moves up or down from second decimal point ( You may find it bit difficult to calculate it using MT4 / MT5 sometimes but it is very easy in ctrader platforms as all values are calculated and shown to you automatically ! ).
8 - Use a Forex Trading Journal
In an excel sheet or a book, write all details that you used to analyse and enter the trade. This way you can improve your success rate by evaluating the trades end result.
9 - Use one specific trading method instead of trying all methods to enter trades
When trading in live forex account, stick to one trading method ( you may test various trading methods using demo practice account given by your broker )
10 - Study the outcome of each forex trade
If a Forex trade is successful or even unsuccessful, make sure to go through it to make further improvements ( If necessary only ) that will benefit future trades.
11 - If you lose trades continuously, stop trading anymore for the day
If you continue to loose trades, avoid trading for that day anymore. Your trading method may not be suitable for that time. So start trading on a fresh new day ! ( Non of the trading methods are 100% successful, So it may be a bad time for your method. )
12 - If you don’t see an opportunity to enter a trade, please don’t open a trade
When trading you have to make sure that you follow good trading discipline guys ! Unless you see an opportunity to enter a trade with your predetermined set of rules ( based on your trading method ), avoid entering a trade to avoid any unwanted losses !
13 - During trading time, avoid any other work
When trading, it is highly recommended to avoid any other work and focus on trading only
14 - Trading Account Capital
Well you can start with a small live account of $10 ~ $200 to get an idea about forex trading or to even have some live experience in forex trading but in order to make reasonable profits with more trading opportunities, it is good to have at least $500 ~ $5000 invested in your trading account ( total account balance). Also make sure you use lot size carefully. Don’t use more than 0.01 ~ 0.02 lot Size unless you have good knowledge understanding of Forex trading & risk factor .
15 - Regulated Broker or not ?
Make sure you trade with a regulated and licensed broker to make sure that you get your earnings ( with correct analysis & predictions ) that you make and also to make sure the broker does not alter trades. Generally you are safe with any broker regulated and licensed by any government where the company is registered or operating. Icmarkets, Tickmill, IQ or Roboforex can be used as regulated forex brokers.
16 - Patience and Practice
Patience and Practice are two of the most important things for any kind of job or investment. Some do not consider these two aspects much and these are most likely reasons for limited success or failure in Forex. Practice helps to improve your trading method and also correct any mistakes in trading ( Also make sure you use Stop Losses and Take Profits to avoid risking whole capital account and make more success trades getting more pips ). Patience is one of the key things. Say you make profits with several trades and you start placing more trades without proper analysis, what will be the end result ? Unwanted losses right ? So trade with patience mate for higher success rate ! Always place a trade only if it tally's with your analysis & predetermined set of rules. One trader may become success in a week while another may need several years, So patience and practice are main things for your success !
General Risk Warning :The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
