Let’s say you are living in the 18th century. You want to go to a distant place and you are riding on your wagon. You will put the horses in front of the wagon that will carry the load and also you. This is the way horses have been pulling wagons for a long time and it has not changed ever since. When you are trading in Forex, you also have to keep in mind not to put your live trading before the demo trading. If you do, you will lose all your money. There are common fundamental techniques of every trading that are old but still effective. People have invented new ways to get rid of the analysis like the automated software, the Holy Grail but still, it cannot replace the role of practice. Whenever you are trading or you are planning to trade, you need to practice to get an idea of the trend.
Identify your mistakes
Identifying your mistakes is the most crucial things to become a profitable trader. Being a new investor you will have access to a high leverage trading account. It’s very obvious you will try to recover your loss after losing a few trades. Majority of the rookie traders increase their lot size to cover up the loss. At times they become lucky but most of the time they blow up their account. On the contrary, the successful traders in the United Kingdom always embrace managed loss. They never become frustrated with the outcome of their trade. They wait patiently for the next trade setup.
Losing or winning doesn’t really matter. You have to start with the demo trading account to understand the nature of the Forex market. Try to create a simple but profitable trading system based on your skills. But always focus on proper risk management factors for the safety of your investment.
Practice before you go live
People are often fascinated by the Forex industry and they do not want to waste their time practicing. They believe this market is easy and they can win money all the time. There is no movement or trend as the chart is always showing up and down of the price level of the currency pairs. If you think like them, you will find there is no signal or trend that you need to analyze. This a common misconception and it is why many people do not practice in demo trading. They deposit money and start trading in the live account.
You will need many hours of practice before you can successfully complete one trade. Remember, it is a sophisticated industry where every moment is important. Even if you late for a moment, the trend will go and a new trend will take its place. You will have to start your analysis from the beginning and it will take a long time. Imagine what will happen if you do not practice. You cannot understand the trends, how the volatility is changing and all these will effect on your performance. This is true for every level of traders and always practice before you go live. Never think of the industry as weak and it will reward you with money. It is very hard and it will try every way to take your capital form you. You have to use your own skill to get back your investment.
Test drive your trade before you risks
People get a chance to test drive their dream car before they buy. The reason is very simple because the manufacturers want to give the test of their new cars before people get to choose them. It will help them in making their decision and also increases their chance of selling cars. Before you want to take risks, do some demo trading to know the risks. If you think these trends are volatile and you may not have profits, practice ion other markets to get pour expected profit.
Disclaimer: This content does not necessarily represent the views of IWB.