Forex Trading Tips | The Iron Rules to Start Forex Trading

Like any other business, you have to understand the rules in forex trading to play the game right. These are some forex trading tips that will be useful to keep your account safe while still making profits and playing by the rules:

1. Never Execute a Transaction without Proper Analysis
Yes, sometimes you will see something that looks like a great opportunity, maybe from news or a glance of the trends. These so called opportunities may bring you profits once or twice, but it is only pure luck, you will never survive in forex trading if you let your emotion take over logical decisions.

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This has happened to most traders when they start; they manage to gain profits by guessing, think that they have already mastered the secrets of forex trading, and start giving forex trading tips to their friends. This attitude is the same like a gambler in a casino: throw the dice and pray. You’ll be thrown out from the game in no time with this kind of attitude.

2. Learn Step by Step
Forex trading has many factors and elements; it is impossible to master it overnight. If you have just start trading, don’t throw $10,000 in your account and experiment with it. Trading forex is like gambling; when someone loses, there is always a winner on the other side. These winners will finish your $10,000 in no time.

The best way to go is to take it slow. Start with a practice/dummy account while learning, you can open a good one here. That way, you can test various strategies, currency pairs, robots, and signals there without worries. If you have found a system that works, you can move to a mini account for further testing. However, if you have confidence in your system, go ahead and open a real account.

Please note that a “system that works” means a system that can give you steady profits at the end of the month without fail and without you having to keep staring at the monitors to check your open positions. If you have confidence in it, learn to control your emotion and let it do the work.

3.  Use a Credible Forex Trading Platform
No matter how good your system, trading in a poor quality platform will kill your chance to gain profits. Basically, this is what you need to look for in a trading platform:
- Support all currency pairs that you interested in. At the very least it must support common currency pair such as EUR/USD, GBP/USD, and USD/JPY.
- Support stops and limits; these are important for your risk management.
- Access to charting, news, research, and advice; basically all the resources that you need to decide a transaction.
Each trader has different preferences, but I suggest you learn to get used to Meta Trader 4 interface. MT4 is the world’s most used trading platform and trusted by many professional traders, you can test it in a dummy account here.

4. Use Credible Forex Broker
- Customer support available. If possible, get the one that provide 24 hours support so you can contact them any time when you get problems.
- Forex trading is a global business, so it will be good if your broker accept deposit in multiple currencies.
- Simple procedures applied in their services, including withdrawal.
- Check whether they’re registered at FSA or other official financial authority; if they’re not then they’re scam brokerage.
Check my recommendation for top forex brokers at best forex broker.

5. Learn to Use Stop Loss and Take Profit Order
Stop Loss and Take Profit is orders that you put to close your position at certain price. Example: you buy GBP at 1.678; then you place Stop Loss order at 1.648 to limit your loss by 30 pips. You also put Take Profit order at 1.708 which means you will close it when you get 30 pips profit.

This is important in order to prevent your emotion getting involved with a close decision and screwing it up. When the market is moving against you, you won’t close the position since you are hoping the market will swing back to your side, thus turning potential loss into profits. In most cases, this will only bring you more losses.

The other scenario: The market moves as you wish and you see potential profit, but you won’t close it since you want as much profit as you can get. Nobody knows when the market will turn against you and when it does, it is usually already too late. In both scenarios, greed is the main emotion. But when logic dictates, you can control greed.

Bottom line: no need to rush everything when you learn or trade forex. Take your time to learn, test, practice, analyze, and read various forex trading tips for the day. Once you find a system that works, trading will be a lot easier.

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