Ten suggestions for beginners of foreign exchange trading
Foreign exchange tradingOne of the biggest characteristics of the market is that it can gain profits by buying up or down (two-way trading). This may sound easy, but to achieve this goal requires traders to have sufficient knowledge of the market and a good trading attitude.
The most urgent thing for a novice trader is to find a trading strategy / skill that suits him / her. We will provide you with such information below, but before doing so, please bear in mind that even if foreign exchange trading feels very simple, as a trader, you still need to invest a lot of energy and time to understand the market before you can find your own trading path. As a trader, the most important thing is perseverance, determination and discipline. Also keep in mind that strategy is the key to trading and the cornerstone of success.
Below we will share some basic trading strategies and techniques for novice traders.
Ten trading strategies and skills for beginners of Foreign Exchange Trading:
1. When trading, it is very important to understand the market, because it can help you to determine your own trading criteria, but also can help you minimize the loss and overcome the psychological barriers of the first trading. Some novice traders don't have this kind of trouble, which just reflects that they don't pay attention to market understanding. What is understanding the market? The first thing to know is who are the players in the foreign exchange market. Generally speaking, the big players of foreign exchange trading are the major central banks, commercial banks, foreign exchange trading companies, investment funds, brokers and some individuals with huge amounts of capital.
2. Foreign exchange trading is always in pairs. Such as US dollar against Japanese yen, euro against US dollar, Swiss franc against US dollar, etc. Therefore, you can focus on the news of unilateral currencies to confirm the trading strategy. For example, the US dollar index rose sharply due to the Fed's interest rate hike yesterday, and the US dollar rose against most currencies. Novice traders can seize this opportunity.
3. Only those who fully understand the concept of money market can manage risk and trade safely. Risk management has always been a headache for beginners, but as long as you can master this skill, you can really grow into a qualified foreign exchange trader. Novice traders should pay more attention to their own mentality, do not add positions at will, do a strict stop loss.
4. The next step is to analyze yourself as a member of the financial market and understand your emotional intelligence, self-confidence and willpower, so as to make a proper trading plan. A simple understanding is to analyze your risk tolerance and confirm whether you are a trader willing to take high risks and get high returns, or an investor who is willing to make safe transactions and obtain sustained relatively low returns.
5. At the same time, we also suggest that all traders should diversify their investment in several transactions rather than a large amount of investment in one transaction. The principle is very simple, "don't put all your eggs in one basket.".
6. With the innovation of technology, paper trading has gradually withdrawn from the stage of history. Most traders are using software or similar tools to trade. However, it is beneficial to keep a trading diary. We have also mentioned the importance of trading diary for a trader to develop good trading habits.
7. There are all kinds of fraud means and technologies in the financial industry, so investors should distinguish them carefully. It is very important to choose a regulated broker. Before becoming a user, we should make a simple investigation on the background of the broker. In addition, we should make clear the legality of the investment products before investing.
8. Make sure you choose the right account type. Small amount of gold, light leverage, mini account is the most suitable for novice traders.
9. Avoid confusion in trading. Because confusion can be the biggest obstacle to profit.
10. After you start trading, as a foreign exchange trader, you should pay attention to your mistakes in trading. This technique can help you estimate the risk and get better returns in the future.
Trading can't be profitable every time. This is also true in foreign exchange trading. Therefore, you should not expect to gain in all trades, especially for novice traders. Maintaining a good attitude is the cornerstone of success.