Forex trading has one goal: to make money. Unfortunately, like any speculative venture, there is the possibility of losing money. The same is true of the stock market, the commodities market, and the money market. Any investment that tempts you with great profit comes with a certain level of risk. As a forex trader, you want to minimize your chances of risk. Follow the following Best Practices:
– Stay current. Browse current events magazines and political journals. Learn how the global political and social landscape is changing. is changing.
– Improve your knowledge of economics. A refresher course in college can keep you from tiring. Journals by economists such as John Maynard Keyes, Kenneth Galbraith, and Walter Williams can help you second-guess potential uptrends in the forex market.
– Read magazines such as the Asian Wall Street Journal and Business Investors Daily.
– Start a practice demo account and learn the rules of the game before entering the market.
– Make friends with a broker you trust.
– Cultivate friendships with other traders for active trading.
– Understand historical trends and how they affect the charts.
– Take a short course on forex trading to improve your skills. They cost less than $200 and can help you avoid $20000 in losses.
– Look for Forex information on the Internet. Forums are great sources of information.
– And finally, invest money that you can afford to lose if the worse happens. Then you won’t be out of the game completely.
– Cut your losses early. When your portfolio loses week after week, get rid of it. It can take months to recover, which means tying up your money unproductively.
– Invest in multiple currency pairs, such as EU-GBP, GBP-USD, and CHF-USD. This frees the trader from the monumental losses that result when all eggs are put into one currency pair.
– Don’t stick to one position for an extended time. This is not a stock market, where stocks tend to rise over the long term. Sell positions when small upward movements occur and reinvest in other currency pairs.
Good luck and happy trading!