At first glance, Forex trading is deceivingly simple. However, the number of bankrupt traders should warn you off hasty decisions and unwise bets. As a successful trader with over 20 years of trading experience, Paul Belogour shares three critical tricks to keeping your trading capital safe and multiplying it.
Be Smart About the Deals
Forex brokers tempt beginner traders with significant payouts. With only “buy” and “sell” choices for every trade, newcomer traders are prone to risking large sums to secure quick profits. Without market knowledge and analysis, these bets can reduce your account to nothing in minutes.
According to Mr. Belogour, it is never wise to risk everything on a single trade, however sure it seems. Instead, the expert recommends setting a maximum trade size and staying true to it. While you are learning the ropes of Forex, keep your bets at 5% to 10% of the trading capital and increase the number in increments until it reaches 15% to 20% once you gain enough experience.
Learn and Try New Strategies
Forex traders think themselves experts after six months on the market. Each of them promotes the winning strategy that works 100% of the time. Unfortunately for beginner traders, these claims are rarely valid, and the number of strategies available online is overwhelming. If you choose one and keep using it indefinitely, you risk going broke when it is no longer viable.
As an experienced trader, Paul Belogour emphasized the value of ongoing learning and experimentation from your first days on the market. Information is the trader’s gold and learning new strategies is equally important to market analysis. If you keep trying out new ways to win the bets, your account will soon match your diligence, and you will be able to come up with your own winning strategies. Demo accounts are perfect for experiments with new approaches, but eventually, you will graduate to live trading. When you do, keep Mr. Belogour’s previous advice in mind and never risk more than you can afford to lose.
Keep a Journal to Analyze Mistakes
In the adrenaline rush of making quick decisions, taking risks, and waiting for positive outcomes, it is easy to forget yourself and your long-term financial goals. Even if you keep your bets reasonable and learn new strategies, you will not see a significant profit until you study and analyze your own actions and derive conclusions about your trading style.
Pavel Belogour suggests you start a trading journal. Besides noting the asset you are trading, record any other factors that influence your decision. These include the price trend, the strategy you are trying out, market data you’ve read in the news, your mood, and more. Look through the journal at the end of the week or the month and consider the reasons behind your biggest mistakes and victories to reevaluate your trading approach.
Making a profit by trading Forex is not a given, it requires careful market analysis and discipline. If you use Mr. Belogour’s advice to learn, analyze, and keep a cool head when placing bets, you will keep your trading capital safe and grow it.