The forex market is one of the largest entities of its type in the world, with an estimated $6.6 trillion globally in this space every single day.
The forex space is also known for offering enhanced liquidity (in relation to certain assets) and inflated leverage, creating an inviting opportunity for investors throughout the developed and developing worlds.
However, this market is also highly volatile and complex, with around 70% of forex traders known to lose money on a regular basis. So, here are a few tips to help you succeed as a forex trader.
#1. Build a Solid Foundation of Knowledge and Determinism
Let’s start with the basics; as you cannot succeed as a forex trader without a comprehensive understanding of the wider marketplace or a keen sense of determinism.
The reason for this is simple; as this understanding enables you to make informed and ultimately effective decisions in real-time, while determinism helps to eliminate emotive trading and recognises the underlying laws that govern change in the forex market.
Both of these elements combine to create an informed and intuitive forex trading strategy, and one that can deliver optimal yields over an extended period of time.
#2. Make Use of a Demo Account
Once you’ve developed a broad base of knowledge and started to cultivate a deterministic investor mindset, the next step is to utilise a demo account through your chosen online trading platform.
This is crucial, as it helps to bridge the gap between theoretical knowledge and practical experience and provides a crucial learning curve that can translate into tangible returns.
Typically, you’ll be allowed to use a demo account for a period of between three and six months, during which time you’ll have access to a simulated, real-time market and can execute orders without risking your hard-earned cash.
This provides ample time to hone and perfect your trading strategy, in a risk-free environment that perfectly replicates daily forex trading.
#3. Never Trade More Than You Can Afford to Lose
It’s interesting to note that the boundaries between investing and gambling remain relatively blurred, particularly when it comes to managing your capital and creating an initial fund from which to invest.
Just as you should never gamble more than you can afford to lose on a daily, weekly or monthly basis, for example, you should also adopt a similar approach when investing and maintain a responsible outlook when commuting your hard-earned cash.
Of course, how you invest will depend on your precise strategy and whether you’re pursuing short or long-term gains, but the bottom line is that you should never invest more than you can afford to lose in a specific period of time.
This will help you to make the most of your capital, and hopefully increase your chances of success over time.