Forex Trading Advice - What Every Newbie Should Know


I'm sure that most traders who are just entering the market could use some forex trading advice.  After all, there is an incredible amount of misinformation being written on the internet.  So hopefully this can provide some kind of help to a lot of traders.

1) Be realistic.  It never ceases to amaze me the kind of ideas that new traders have.  They think that the forex market is so simple that they will be a millionaire by the end of their first week.  Stop thinking like this.

They are completely stunned when they have the first loss. "They think how can this happen to me?"  

Ok...these are the kind of traders that need a big dose of reality. Take a look at this statistic: 95% of forex traders end up losing money.

I didn't write that to put a damper on your dreams.  I just don't want you to think that forex trading is some kind of shortcut to riches.  It's not incredibly difficult to make money forex trading, but it's also not a cakewalk either.  So enter the market with a level head, and try to keep your head from going to the clouds. 

2) You don't need to spend an arm and a leg. For whatever the reason, many newbie traders think that they have to spend hundreds, if not thousands of dollars on trading platforms.  This is ridiculous.  There are plenty of trading platforms that are perfectly free, like Metatrader. 

It's not the tools that make the trader, its the knowledge that they have.  What I mean by this, is that the truly great traders don't really need the bells and whistles.  They truly understand the market.

3) Don't fall in love with indicators:  This is very common with new traders.  They have this need to fill their charts with their indicators.  I was the same exact way when I first started. Somehow traders think that you have to use indicators in order to trader.  Nothing could be farther from the truth.

Instead of using lagging indicators to tell you what has already happened, you should be looking at price action trading to tell you where the market is headed.  This concept is as old as trading itself.  The faster you start learning it, the better off your trading is going to be.




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