When it comes to forex trading, there is no one-size-fits-all approach or guaranteed formula for success. In order to reap lucrative rewards, traders need to be disciplined about applying sound trading principles and strategies.
Ever wanted to know how successful forex traders do it? Forex s traded not only by big banks and financial institutions, but individuals are also coming in constantly into Forex trading. I like it because of fewer options you have to trade Forex, as foreign currencies are limited in quantity.
10 habits you should start adopting if you’re new to Forex trading
Acknowledge your needs & goals
People trade forex for different reasons. Some people treat it as a side hobby to earn some extra cash, whilst others want to turn it into a full-time job. Whatever the reason may be, it’s good to identify your objectives early on as your goals will help dictate the way you trade. Once you’ve established what you really want to get from trading, you can start devising a plan on how you’re going to get it.
Read as widely as possible
Nailing the foundations of forex and doing the prep work is crucial to trading success. Before you start trading, familiarise yourself with the way the forex market works and take advantage of education resources available online. Read as widely as possible on forex related books, blogs and videos and opt for reputable sources only. Observing how the market works will help you form an idea about the types of trades best suited to you.
Read as widely as possible on forex related books, blogs and videos and opt for reputable sources only. Observing how the market works will help you form an idea about the types of trades best suited to you.
Have a trading plan and stick to it
It’s important to devise a trading plan that you can stick to. Ensure your plan isn’t emotionally driven or formulated based on speculations. Rather, your plan should be backed by good research, appropriate market observations and sound logic. If ever in doubt, before launching into a trade, take half a step back and try to look at it objectively. Make sure the trade fits in with your broader strategy and that it is done based on sound information as opposed to a ‘gut feel’.
Pick a broker and platform that’s aligned with your trading style
Different trading platforms are designed to suit varying styles of trading. Don’t rush the process of finding a broker. Rather, review a variety of regulated brokers and trial demo trading on different platforms to compare offerings and the pros and cons. For beginners, look for online trading platforms like
For beginners, look for online trading platforms like AxiTrader, who make trading very simple, giving access to trading tools, analytics resources, education and 24-hour support.
Practice with a forex demo account…but not for too long
Beginner traders should leverage demo accounts to test the waters and practice trading in a risk-free environment. Often with demo accounts, you trade in a replica of the live trading environment with virtual money, including access to real-time spreads and execution speeds. However, don’t stick with a demo account for too long as you won’t learn any real money management skills. When you’re ready to move into live trading with real money, start small and trade one or two currency pairs to get a feel for things.
However, don’t stick with a demo account for too long as you won’t learn any real money management skills. When you’re ready to move into live trading with real money, start small and trade one or two currency pairs to get a feel for things.
Track your trading activity
Track your daily trading activity and results, no matter what skill level you’re at. This is a good habit to adopt because it allows you to monitor and analyse your successes and failures. Review your records regularly so that you can observe what’s working and what’s not. A little effort each day can amount to something very meaningful in the long term.
Have stop losses in place
Trading is inherently risky as every trade has the potential to be a losing way. As a result, it’s important to mitigate that risk and establish a safety net where possible. Always have stop losses in place to protect your capital and manage risks. A stop loss automatically closes a trade if it reaches a pre-determined point that’s too far out of your comfort loss. This can be either a dollar amount or a percentage – either way, a stop loss limits the risk that a trader is exposed to for each trade so that your losses are also limited.
Be patient and avoid overconfidence
If you’re pursuing forex trading with the hopes that you’ll win big and get rich within a fortnight, it’s time to rethink your decision. Trading requires a high level of discipline, patience and persistence. Successful trading takes time and must be viewed as a long-term strategy. If you’ve experienced a few consecutive winning trades, that’s great news, but avoid getting overly confident. Remember – having a run of favourable results has no effect on the outcome of your next trade.
If you’ve experienced a few consecutive winning trades, that’s great news, but avoid getting overly confident. Remember – having a run of favourable results has no effect on the outcome of your next trade.
Observe the markets
Keep your finger on the pulse and pay attention to the markets. World politics, significant events, economics and finance news can all affect your trade. The more up to date you are, the better prepared you will be. Note down patterns, trends and observations over the weekend so that you can plan your upcoming trade week ahead. Remember – failing to plan, is planning to fail.
- Constantly reevaluate your trading plan and know when to stop trading
No one wants to think about losses, but they can happen. An ineffective or unsuccessful trading plan isn’t the end of the world, but it is a problem that needs to be solved. If you experience a loss, remain calm and reassess your strategy.
Identify what contributed to the problem and then adjust or re-address your risk management. Don’t let your emotions get the better of you and focus on the bigger picture.
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