If there is the most important period throughout your entire Forex career, this would be the first month of trading. Well, let me correct myself, as actually, it’s the months of preparation to be of utmost importance before you get started with trading.
During those months, it’s Forex and a cup of aromatic coffee, which should be the first things to start your morning with. Well, probably you shouldn’t forget about your wife and kids, but you certainly get my point. Every hour should be filled with studying the FX market, understanding the analysis, making up the Forex strategy that will deliver you profits.
Once you feel confident enough to start Forex trading, and have your demo account set up, get the green light then and go trading. However, put away the illusions you may have: immense Forex wealth is unlikely to fall in your pocket immediately without working hard.
So, you have already pushed the “START” button and joined the biggest market in the world. Then your first and the most crucial target is to keep your account alive in the first month. Of course, you are not forbidden to dream about “Fields of Gold” (nice song by Sting actually), but believe me, if after a month of trading, you have your account still active, you DID survive where most people drowned.
So you are asking me how a new trader would survive this first month of trading and not lose his/her account. Below I put my tailored receipt, which was brought to me by my own ups-and-downs experience.
Hours of Demo Trading
If you did not do karate before taking part in a world karate tournament, then you better stay away from tatami or you’ll get a first punch leading to knock out. IIf you did not put multiple hours to trading FX demo account before you are risking your money for real, then get back to the “training hall” and spend those hours practicing.
Get Ready to Lose
Knowing this will help your future profits, whatever you may think. Getting yourself morally prepared for losses will make you tough enough to cope with difficulties and what’s more important, not to quit trading.
By this certain moment, you MUST have your own Forex strategy. If you don’t though, then stop your Forex cab and get out of it create one. Are you finished? Then since now the strategy should be time-tested, and you should monitor the results. Every strategy needs regular evaluation to make sure that it gives a good outcome.
Manage Your Money
I can’t be any more serious when saying about money management. It is totally crucial. Don’t even think of risking more than 2% of your account capital for a trade. No matter what a devil on your shoulder says! Use such tools as Stop Losses, Take Profits and others available that will help to keep your account a float and effectively manage it. Here are my 10 crucial tips on Forex money management.
Forex Hates Emotions
Make sure to control your emotional bursts into the Forex atmosphere. Restrain your greed, fear or a depression (as it’s a fashionable word nowadays) from taking part in any of your trading processes. Remember that you have a strategy to stick to and fewer emotions involved will make you a better trader.
Lever the Leverage
Use leverage like a rifle when hunting – with extreme caution. If you are over leveraging your trades, it’s a neat poison to your account. Well, there is a sort of the strongest temptation for you to trade half a million USD with your only $1000 of account. No place for naivety here as this will surely lead you to inevitable failure in the end. Don’t know much about leverage? Find out explanation on what is leverage and its role on Forex here.
No Casino Principles Work
If you don’t take FX trading seriously, this will play a tough joke on your wallet. And therefore, on your life. Treat Forex trading as a career, but recreation, and it gets back to you in the correspondent (profitable) way.
Written by Alexander Collins, who is a founder of Forexeasystems, a vendor of sophisticated Forex trading systems and strategies. As well as a developer of the MT4 free indicator called Fx Pulse that detects trend for each time frame. As a bonus it shows actual news headlines on the chart. If you are interested in downloading it for free, just type in Google – Fx Pulse.
You May Like Also
May 8, 2012 | by John Greener |