4 Sure-fire Forex Trading Tips That Will Make You a Better Trader

Forex trading is tough. Most websites will try to tell you that it’s easy, and that everybody can do it…

But that is simply not true.

If you want to be a Forex trader, you need a strategy, you need a trading plan, and you need the right trading psychology. In this article, I will help you out with some Forex trading tips to improve your trading psychology.

If you need help with your strategy, check out my free price action strategy. If you need help with a trading, and money management plan, check out the free Forex course.

Four Forex trading tips that will make you a better trader

Trading psychology is one of the most important aspects of Forex trading. So let me help you get your psychology on the right track, with these four sure-fire tips, that will help make you a better trader.

1. Start small, baby

Ok, you know the basics, you have been studying for a year, and now it is time to open a live account. How much money should you open an account with?a newbie Forex trader hugging a teddy

The experts say around about $5,000 but they are very wrong. If you open your first live account with a significant amount of money, you’re dooming yourself to failure…

… Why?

Well, professional traders are in control of their emotions, newbies aren’t. The longer you trade, the better you will become at controlling negative emotions. Trading psychology is tough to master, as a new trader, you will probably let emotion get in the way.

One of the most destructive emotions you will face is fear. Fear of losing will make you do stupid things. So if you’re trading a large amount of money, fear of losing will kick in quickly. Imagine you have $1 on the line, you would not be very scared of losing, right? Well, if you have $1,000 on the line, you would be much more scared of losing.

For this reason, it is smart to start your live account with only a small amount of money. You need to train yourself to deal with negative emotions, and bolster your trading psychology. As time passes you can add more money to your account. If you start off with only a small amount, it will give you time to harden your trading psychology.

2. Be fluid & think on your feet

Empty your mind, be formless. Shapeless, like water. If you put water into a cup, it becomes the cup. You put water into a bottle and it becomes the bottle. You put it in a teapot it becomes the teapot. Now, water can flow or it can crash. Be water my friend.Bruce Lee

A trader, above all else, must be able to adapt to changing market conditions.

If you have a trading strategy, you should never follow it religiously. You should always be ready to make changes on the fly, and adapt to current conditions. The Forex market is very fluid, and you need to be just as fluid to trade it. When the market throws something unexpected at you, you need to be able to analyse the best course of action, and make a decision quickly.

3. Only trading when you are sure

Do you ever enter a trade just because you think you should be trading? A lot of newbies do that exact thing. They take trades because they “believe” they should be in the market. Instead of waiting for a good opportunity, they jump into any trade (even if the chances of it working out are slim).

Trading just to be in the market is reckless and dangerous, it can cost you your whole account. So before you enter a trade ask yourself these two question.

  • Why am I entering this trade?
  • Is my strategy really telling me to enter?

Never enter a trade unless you’re sure you should be in the trade.

4. Set Targets

Setting overall weekly and monthly targets is very important to your trading.

Why is it so important?

  • It gives your trading structure and allows you to plan ahead, long term.
  • It gives you a goal to aim for instead of trading aimlessly.

The urge to over trade is a common problem among newbies. If you set targets, once you reach it your target you can relax, and take it easy for the rest of the week. Setting targets helps you to remove the pressures that can causes you to overtrade. It also keeps you disciplined because it gives you a structured plan that you can stick to.

If you have any questions, ask below

If you enjoyed my Forex trading tips, or if you have any questions, feel free to leave a comment below. I will try my best to answer.

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14 thoughts on “4 Sure-fire Forex Trading Tips That Will Make You a Better Trader
  1. Any newbie who does not belive what Nick has said above is going to lose their first account, and maybe second. I did. Listen to what he says and you will be better prepared for the hard work ahead – and good luck!

  2. Thanks Nick. Great post. A quick question regarding your example of jumping out of the trade that was moving against you. It seems like there is a fine line between getting quickly out of a trade that is moving against you versus exiting a trade too early ? I guess the art is determining what is a move against you versus a small reversal before continuing on in your direction.

  3. Thanks Nick. I have been schooled to trade the system, as you have said here and found it a good idea. What I have trouble with is this, and it is something I have tried to work out for ages now: trading the system means to me, allowing the trade to hit the stop-loss and not exiting early, as you have recommended here. Most good traders do what you do, and very effectively, and exit before the SL is hit. Some refer to the SL as a Catastrophic SL. Backtesting with a firm SL is possible but backtesting with an adjustable SL is not so easy. My expression is not good, but could you please comment on this Nick. Thanks

  4. Nick,

    Great article. Wouldn’t be in such bad shape today if I have read this 1/2 year ago. Nevertheless, you got to go thru it in order to appreciate what you are reading. Thanks again and keep it up. Cheers!

  5. Great points all of them. One thing I’ve noticed with both your trading and Fetor’s is that both of you have a feel or maybe enough ego strength to admit a trade has gone bad and toss in the towel at 10-20 pips. Fetor does it by entering at or near suport and resistance points and you do it with voodoo and price action knowledge. Good stuff to model for us since I’ve never really seen it stated how it’s done in any forex book. Both of your courses deal with this subject at length.

  6. Hi Nick,

    Good post!

    I must agree with the posts of Peter and Russ above.

    I would be curious as well on what you have to say, as I agree with both comments.

    Thanks & Cheers!

  7. Great post Nick we all need reminded of our failings and as for getting out when it’s not going your way, it’s always the safe bet, as you said be fluid you can always re-enter

  8. Another excellent post, Nick.

    I’ve been trying to learn trading on and off for over a year and without your articles, I don’t think I’d have a clue what I am doing.

    Thanks for your clear, concise advice and training.

    Mat