The Ins and Outs Of Currency Trading That You Should Know
While attempting to navigate the complex world of currency trading, you may find yourself extremely confused, stuck, or possibly even misled. You may have been attempting to research as much as you can about the trading industry, listening to advice from a variety of experts such as blogs, podcasts, brokers, books, and even YouTube videos. Much of this information has likely been conflicting.
However, at this moment, you can stop, take a deep breath, and listen to some of the advice given by expert traders. It may be impossible to always know what to do exactly right each and every time, but this article seeks to expose some of the currency secrets that may help you as a beginner perform better in the forex market.
There are No Secrets
I know, right? This may seem counter-intuitive, but the first currency trading secret is that there are no secrets. There is the advice one can generally follow, data and statistics you can study in order to make better-educated decisions, and a way of retraining your brain in order to help you make better calls.
However, books and courses and brokers are trying to convince you that there are specific “secrets” of the industry in order to sell you a product. And the problem is that their advice may not even be beneficial or worth your time. The advice that is good, however, can help you cut your losses and learn to make better decisions, but still isn’t a “secret to fast success.”
The best way to get better at currency trading is through trial and error, and by watching the moves that other traders make and studying them and their results. As you continue to advance, you will get better and better at it over time.
Just like with writing or painting or playing music, currency trading is a skill – better yet, an art form – that takes time and practice to develop. Therefore, the rest of these “secrets” are just going to be ways to better your trading skills.
Watch the Professionals
The very first thing you should do, possibly even before you ever invest a single penny, is to identify those who are succeeding in the currency trading business and follow their every move. Pay close attention to the moves they make, when, why, and the aftereffects of them.
Try to pinpoint their values, their techniques, and their thinking strategies. If possible, reach out to them and ask how they’ve found their success. The best tips come from those who are clearly using them successfully.
Day Trading is Not That Profitable
Although the opposite is generally hyped up in popular media, day trading is simply not as successful as other types of trading strategies. The best way to make a decent profit off of currency trading is by allowing trades to play out over extended periods of time, sometimes weeks or even months.
Instead of purchasing thousands of shares all at one time, it is much better to accumulate everything slower.
As a beginning trader, you may become bombarded with information from seemingly “reliable” sources, including certified brokers, friends and family, mentors, and even blogs or YouTube channels that you’re highly familiar with. The human thing to do is trust information that generally sounds right completely at face value.
However, this is a good way to get your foot stuck in a hole, tripping you up. Just because the information is delivered from a reliable source and “sounds good,” doesn’t mean it is. Research and question every piece of advice you receive. Some of it is going to be sound; most of it is not. Typically, if a piece of advice sounds like a “shortcut” or too good to be true, it likely is.
Worry More About Profits than Losses
Psychologically, the majority of people are more affected by one negative event or comment than they are by five positive ones. The same truth holds for currency trading. As your emotions begin to take hold, wracking up losses may be scary, causing a trader to begin selling wins quickly to ensure they turn some type of profit while allowing losses to continue wracking up in the hopes that they’ll turn around.
This only makes a bad situation worse. In order to succeed in the field of currency trading, you’ll need to shift your focus away from cutting losses and towards simply ensuring your profits exceed your losses, even if only by a small margin. As long as you’ve won the war, it doesn’t matter if you lose a battle here and there.
Learn to Master Your Emotions
This brings me to my second primary point: It’s important to learn how to make decisions based on facts and statistics and not on “intuition,” “gut feelings,” greed, or fear. Once you start learning the patterns of trading, you can make better-educated decisions based on past experience with tried and tested statistics.
It’s also important to understand what percentage of your money you’re willing to risk and learn basic financial management. If you allow your emotions to dictate your decisions, it will cause your trading strategy – and ultimate success – to unravel extremely quickly. Base your decisions on math and science, and not on temporary, human feelings.
Focus on Yourself
Finally, your last piece of advice is to focus on yourself. Focus on learning from your own successes and mistakes, and on learning from those of others. Don’t attempt to compare your experiences to others except in an attempt to learn from them. If you follow this, along with the above tips, you can find yourself developing your trading skill much faster than the average trader.