We’re already well into the first month of the new year and that means that you have had plenty of opportunities to trade on the forex markets. With a new year come new resolutions and goals and importantly forex trading tips that can be the difference between major gains and major losses. Whether you are new to trading or an experienced “City Boy”, we have some excellent tips for you to use when you make your next forex trade.
Consider a managed account
This can be especially helpful if you are just starting out as you will use a broker to help you set up and then manage your account. Furthermore, your broker is likely to offer a number of trading tips to ensure that your bids on forex currency pairs are successful. Keep in mind that when you opt for a managed account you are no longer considered a forex trader but a forex investor as you do not manage your account or have to spend time analysing the markets. This means that you have your free time to yourself while still taking advantage of the forex markets.
Be Wary of Leverage
As exciting as it may be to trade large amounts, with a high percentage of leverage there is the risk of large losses and you, as the trader, risk losing all your capital in one quick go. While you can take the risk, a regularly featured forex trading tip is to avoid getting an extremely high percentage of leverage.
Use a Demo Account
Just about every broker and trading system provides a free demo account and if it doesn’t then consider an alternative system or broker. Demo accounts are not just for the newbies dipping their toes into the trading pool; they are also used by experienced traders to test new strategies and formulas without the risk of financial losses. Practise your forex trading tips and tricks in your demo account and once you’re certain they work you can use them in your real account and enjoy the profits.
Use Margin Wisely
One of the tips that forex trading pros share with beginners is that you can use margin to boost your profits quite significantly. By keeping a close eye on your margin you can minimise the risk of losses; although if you do not keep a close eye on it then you risk greater losses than previously expected. However, once you have a stable position and there is minimal risk of loss you can then use margin to your advantage.
With these forex trading tips you can enter 2012’s forex markets with confidence.