Forex for beginners and experienced traders can be very attractive and lucrative in terms of making money but almost all of the traders don’t exactly win each and every trade. Previously we have seen that almost 91% of the traders don’t make it to the top and they tend to lose more money on a trade than they actually make profit from a win trade, and various reports have been released by different companies which points out the same thing that is almost 51% of the trade were win trades but they lost more money on a losing trade.
One of the main reasons behind failure for so many Forex for beginners is that they do not have a proper logical system or a Trading Plan that can guide them through ups and downs. You need to have a set of rules that you can follow easily and those rules should have worked for you in the past. For example if you decided to enter into a trade and it turns out be a bad trade as the price of that currency pair continues to fall it is wise to keep the risk at minimum instead of taking a bigger risk hoping that the trade will come around and turn into profitable one. Most people end-up losing great amount of money from a single trade as they cannot get out at the right time and instead of losing 12 pips or less they ultimately lose more than expected.
Next step for Forex for beginners is that before investing money in live trading accounts you should go through technical chart analysis and price action analysis. Set a schedule and give proper time to those charts moreover, look for patterns that can turn into your favor. Setup a risk reward ratio, if you decide to enter into a trade then your reward should be greater than your risk or it should equal but not less than one and this is the key to making profits consistently without losing a lot of your investment.
Once you have setup your own risk and reward ratio then you need to follow it, and do not make psychological or emotional mistake that is if you’re selling or buying too early or late. Most common blunders that are made by beginners are related to trade size as normally fresh traders do not have a perfect idea on trade size, sometimes they go for a bigger trade or a smaller trade size without any reason or logic. If they lose a trade then it creates a negative sentiment in the mind of traders.
One of the great things about currency trading is that you don’t need to have a large capital and Forex for beginners can just start trading with just few hundred dollars in their live accounts. However, before you can start trading it wise to take educational courses on Forex that will help you in reading charts, and all the basics related to currency markets.