Most beginners simply think in how much can they make in Forex, ignoring the risks they take every time they make a trade. Due to this, most beginners lose their money before they have the chance to learn how this market really works.
If you’re just starting in this market, use the following tips to protect your money:
1 – Remember Forex is a challenging market, so don’t feel any urge to trade in a real account
It takes several months or even years to master this market. If you start trading without the proper knowledge, you’ll probably lose your money before you have the chance to develop a solid system. To avoid this, make sure you take the time to learn to trade and to test your trading for several months in a demo account.
You can learn everything about Forex in books, courses or even in free websites, so take the time to learn everything you can before you start trading in a real account.
2 – Beware with your broker
Many people open real accounts with unregulated brokers, and once in awhile they end up by losing all their money… Avoid this situation at all costs. Make sure you research everything you can about a broker before you send them any money. Call them and ask them where are their offices and who regulates them.
Make sure to google “broker review” to see what people tell about this broker. Avoid trading in a broker where most people complaint about their honesty.
The less money you invest in Forex, the less pressure you’ll feel. Think how much money could you lose without affecting your life or a good night of sleep, and never invest in Forex more money than the money you can lose without affecting you.
In this step you need to think in Forex trading as in gambling: don’t risk anything you can’t lose, or else you’ll have so much pressure that you greatly increase the odds to lose.
4 – Avoid using the most famous systems on the market
Usually the most famous system in the market won’t work in real life. Why? Sometimes this system never worked but plenty of people promote it to get their commissions, other times the system used to work but since so many people use it, it stops working.
Forex, just like all financial markets, works in a simple way: few people make a fortune, and most people lose money. When everyone is using the same system, they end up by losing.
Avoid this by testing less popular systems or courses or simply by developing your own personal system.
5 – Write a trading diary
Write a trading diary where you write all your trades, and the reasons that took you to buy or sell any currency pair. By doing this, you’ll be able to later check out your past trades and find out what can you improve next time