In this article we will give beginner forex traders a list of important forex trading tips for getting started with trading the forex market. This list trading tips will help beginner traders avoid the normal pitfalls and problems that forex traders face when getting started. It is important that beginner forex traders start the trading journey going in the right direction. If a beginner trader drifts off course, it could cost them years of time and effort.
The first trading tip for beginner forex traders is to choose your trading system wisely. Find a trading system that works, and is effective at producing pips. The information traders see on the internet and forex websites makes this difficult. It is easy for a beginner forex trader to get into a loop of chasing bad trading systems and the same old techincal indicators that are worthless time wasters. Beginner forex traders can get lost quickly in a sea of websites, robots and technical indicators.
We advise avoiding technical indicators completely, and using the individual currency analysis techniques that we will present in this article. Beginner traders should also avoid forex forums and obviously poor websites. Characteristics of poor sites include auto generated content, lots of click ads, websites with no trading system, emphasis on standard technical indicators, etc.
Look for websites that have complete trading system and complete documentation, and specific trade entry methods. If you would like an effective forex trading system that is based on individual currencies, check the Forexearlywarning trading system, and methods like parallel and inverse analysis for market analysis and trade entries. Beginner forex traders can easily compare this trading system to technical indicator based systems and robots and you will quickly determine the Forexearlywarning individual currency system is far more effective.
See one of our individual currency indicators below for trade entries, it is called The Forex Heatmap®. This is obvious CAD strength on our real time heatmap pointing you to the correct pairs to trade.
When you see a forex website, make sure is has a lot of high quality content, and all details of an effective, complete trading system. Most forex websites have a lot of advertisements and content that is weak with no details, not useful, or just a sales pitch. A great forex website will have specific money management methods, along with high quality forex education articles and videos.
If you are using a paid signals service the prices should be reasonable or inexpensive and be for a large number of pairs, not just a few. With paid signal services the signals should be obvious and you should know what a good trade entry signal looks like before subscribing. We have this at Forexearlywarning.
Beginner Forex Traders Must Demo Trade
Whatever trading system you choose, make sure you demo trade the system to prove that the system works well for you at making pips. Another trading tip for a beginner forex trader. Demo trade the system to make sure you are consistent with profits and only small losses. If your forex demo account trading is going well, you can start live trading with 2-4 micro lots trade size with stop orders and practice your money management and scaling out lots. Learn the process of placing orders, setting stops, and scaling out lots on profitable trades. Learn to make $50 first before moving into the larger number of lots.
Evaluate your losing trades, even losing demo trades. Did you get stopped out and the trade eventually went in the direction of the major trends? This is why using trend based system works so well. Did you ignore something important in your trading system or entry management system when you entered your trade? Create a written forex tradng journal to track your progress.
Beginner Forex Traders Need Education
Great forex education at no cost is available to beginner forex traders. It is not necessary to pay for forex education. There are a larger number of websites that attempt to charge forex traders thousands of dollars for training and education. There are also many forex website that might have some free education, but the information is faulty and mostly based on technical indicators, which are worthless time wasters.
What traders need is great information about how to trade the forex market, either free of for a reasonable cost. We invite all traders to check out our illustrated forex lessons package, which is totally free. We can teach beginner forex traders the right way to trade across 8 currencies and 28 pairs.
What Makes Pairs Move
As a beginner forex traders you must understand what causes currency pairs to move. Without fairly strong price movement up or down daily or weekly, traders cannot make any pips or profits. Currency pairs move because one currency in the pair is strong and the other one is neutral or weak. Another possibility is that one currency is weak or the other is neutral or strong. Strong versus weak.
Compare this simple reasoning behind why currency pairs move and you will immediately and completely avoid technical indicators and robots. Study parallel and inverse analysis and individual currency strength and trends well and you will always know why the forex market is moving at all times, and on what pairs. The Forexearlywarning trading system will help to get you there. See the example below.
In this example the Swiss Franc CHF is weak. Due to some slight New Zealand Dollar NZD strength, the NZD/CHF moved much higher on this trading day. Beginner forex traers need simple but effective live signals like the signals provided by The Forex Heatmap® forex heatmap to succesfully trade, then they can start to practice trade management and moving stops. These signals work for 28 pairs, including popular currency pairs like the EUR/USD.
Beginner Forex Traders Need To Analyze The Market
If you are a beginner forex trader, a great skill to learn would be how to analyze the market condition across the 8 major currencies and 28 pairs. We have some great tools for you to become a great forex market analyst. Check out our forex market analysis spreadsheet for analyzing currencies. This rpfessional market analysis tool will show new forex traders how to analyze individual currencies that compose the top 28 pairs. This great spreadsheet tool will give beginner traders you a picture of the forex market and get them pointed in the direction of the bet trends available at all times. Better trade decisions and market understanding will then follow.
Beginner Forex Traders Need A Set Of Trade Entry Rules
Beginner forex traders need a clear set of rules and guidelines for your trade entries, here is a short list. Do not enter forex trades randomly, even demo trades. Make sure you are following a entry management system, including high quality, real time trade entry management tools that are easy to interpret. For our trading system we use The Forex Heatmap ®. It works for 8 currencies and 28 pairs.
Always trade in the direction of the higher time frames and trends, H4 and larger, that is where the pips are at. Scalping the smaller time frames will eventually crush any beginner forex trader due to the upside down money management ratios. If you want to know more about rules based forex trading and you need a set of rules for trade entries we can provide you with a set of rules for each and every trade entry.
Beginner Forex Traders Might Need Live Account Funding
Beginner forex traders always ask “How much money does it take to fund my trading account” In some cases the answer is zero. The first thing you will do is to trade a demo account, which reauires no funding. Then, if successful at demo trading, you should consider a live trading account. But do not let not having any trading capital be a deterrent to having a forex trading career.
If you are a beginner forex trader, and you do not have any money to fund a trading account, it does not matter. Third party capital and funding providers are numerous, and funding providers will provide forex trading capital to fund your live trading account with up to $1,000,000 or more in currency buying power. All you have to do is trade well and profitably in a demo account and you will be ready to apply for funding. So as a beginner forex trader you should focus on trading accurately and don’t worry about the money, it is available. A forex areer is a real possibility for anyone who has great trading skills.
Beginner forex traders trading tips, summary and conclusions:
Becoming a professional forex trader is a possibility for almost anyone. Having access to a great trading system and free education is s great starting point. Traders can demo trade their way to success. When you are ready to trade live, lots of third party capital is available for traders to get their accounts funded, if they need it. We hope that the tips in this article will convince beginner traders that the opportunity to trade the forex is within reach. Did you like this article, beginner forex traders should also check out our complete trading course for new forex traders.