There are different forex trading rules and that is the reason why beginners are often confused and do not know where to start their journey in this world. Nevertheless, there are some general points applicable to everyone. As for personal hints and the overall strategy, they appear while you are acting. Let’s consider the six basic steps that will help you at the start.
Step 1. Evaluate yourself
Your character and personal qualities must be your priority in the forex portfolio. The situation can change significantly in a short period of time and your reactions are the key to success or failure. That is why you need to:
- understand your personal strong and weak points;
- think about the strategy that will suit you most;
- plan your first activities;
- learn to stay objective and not be guided by your emotions;
- implement the discipline in your trading;
- set up realistic goals and stay patient.
Altogether, this is not an easy task and you may need help, especially for the proper evaluation of your abilities.
Step 2. Define your goals clearly
It is highly important to clearly understand the financial goals that are related to your activities. Determine the income that you are waiting for and do not forget to count the level of losing trades that is allowable.
Then, after some time analyze the set of your trades and calculate the income. You have to do it regularly to understand whether your expectations meet the reality and there will be no financial problems.
Step 3. Prepare the financial cushion
To start trading you need cash and the process is going to be challenging is there is a lack of liquidity. Moreover, cash serves as a protection against probable losses. Without a financial cushion, it will be hard to sustain bad periods. That is why plan and save some additional funds that can help you in such a situation.
Step 4. Carefully select the lots
After selecting a currency pair try it on the existing timeframes. There are charts for the week, day, several hours, or even minutes. This way, you can determine the behavior of the market and get an idea of how the process occurs.
Choose a lot that is good for you, and read the news and commentaries on it. Compare all the available information and only then start to trade. Step by step, you will learn from mistakes and draw the proper conclusions.
Step 5. Check the methodology
You should keep in mind that there is no such thing as an ideal strategy. Everything changes in trading and you need to stay alert always and check your methodology. Loses are constantly present but they must not upset or scare you. Think about them as indicators that show you the best way to continue to move on.
Step 6. Compare risks and rewards
Be patient and take your time to compare your initial goals and obtained results. Try to stick to the initial plan and follow the basic rules. That is the way towards success.
