I have been working with Nick and Forex4noobs for quite a few years now and seen a wide range of traders join our community. During that time I have primarily focused on helping newer traders find their feet in the world of forex trading – something that is deceptively difficult to do.
I myself have transitioned from a beginner trader into a moderately experienced one (5-6 years) and learnt many lessons throughout this time that I think would be useful to pass on.
Whether you have just started checking forex trading out or are 1 – 2 years in, the tips I have listed below will help you in becoming a better trader in a shorter amount of time, hopefully propelling you to financial independence and freedom.
1. Look Forwards, Not Backwards
Forex trading on a daily basis is inevitably going to bring about some mistakes, lost trades, or missed opportunities. Simply put, you will not be able to avoid these things and they will have an impact on your trading.
So what to do about it?
A mistake is only a mistake if you don’t learn anything from it. Nick himself makes mistakes regularly but the difference between an experienced trader making mistakes and a new trader making them is that the experienced trader will be unphased.
More opportunities and more trades are right in front of you – all you need to do is keep looking forward at the next trade opportunity.
Succeeding in trading takes requires practice, time, and a bit of experience, all things that you won’t rack up if you simply stop trading. It happens. Paralysis by analysis, fear of trading, fear of losing – these are all problems that a lot of new traders struggle with.
You have to keep looking forward and apply the skills you’ve learnt and come to understand your own style of trading. Everyone has different strengths and weaknesses and part of the learning process is figuring yours out.
That being said, don’t neglect looking backwards. You can learn from your mistakes, but the key is to not let those mistakes sit in your mind and corrode your confidence and trading mindset.
The best way to do this is through a trading journal so you can look back at your collective results and make adjustments based on your collected data. So don’t fret over every detail of every trade – if you have made a mistake take note of it and apply what you have learned to the next trade.
2. Best Time Frames to Trade
One of the most common problems I see in new traders is the issue of what time frame to focus your trading on. Some of us prefer higher time frames, others prefer lower time frames – both of these are fine but the key is to choose one and stick to it.
If you are flip-flopping between the two then you will stunt your growth by a considerable amount.
The reason is that, whilst price action is still fundamentally the same, there are key differences between higher and lower time frame trading that will confuse you (unless you have some experience under your belt).
The first year of trading is the most important year of your trading career. This time period is the one that you are most likely to drop everything and walk away from trading.
You do yourself no favours by slowing your progress down and that means you need to choose the best time frames to trade for you and stick to them for your first year.
Your schedule may also make it necessary to pick one or the other which is fine! You have time in the future to explore other time frames once you have found your feet. But make sure you learn how to walk before trying your hand at running.
3. Transitioning From Demo to Live Trading
One of the more subtle aspects of forex trading is changing from demo trading into live trading.
There are quite a few obstacles here that are worth noting so that you can avoid making mistakes that will make the transition more difficult.
The first of these is that your trading will change slightly, simply because demo trading is not the same as live trading. We encourage demo traders to take a trade versus not taking one if it looks a bit risky. This is because you are testing the limits of trading on your demo account.
So live trading will typically exercise a bit more patience and risk management consideration – don’t be trigger happy in live trading because that is a quick way to lose your capital.
The second obstacle is a mindset one which is harder to pin down. Let’s face it, when you trade with real money, you are going to be in a different headspace as it will impact you much more when you win and lose trades.
Problems of overtrading and overconfidence come about through strings of wins, and fear of trading/losing and paralysis by analysis come about through losing streaks. Be aware of how your mindset changes when you live trade and you can prevent these problems from taking over your trading process.
The third obstacle is looking back at your results and deciding whether or not to live trade.
Based on hundreds of Mastermind students, I have found that a gradual switch is better for new traders.
So let’s say you have looked at your 50 demo trades and had good results with a 50% win rate. You don’t need to scrap your demo account and exclusively focus on your live account.
Keep taking trades on your demo account and when you feel you have some strong setups, take them on your live account. Gradually, you can fully transition over to your live account, and doing so will help you adjust and keep your momentum.
4. Invest in Charts!
Look, a frustrating reality about forex trading is that most brokers have sub par charting software.
It is not a smooth experience, it often does not have enough customisation, and generally slows down and harms your analysis.
If you have an unfulfilling and cluttered charting experience, your analysis is likely to suffer as a result. So take a look at TradingView or brokers that have their own platforms and try them out.
You can try TradingView on a 1-month free trial here if you want. If you already have TradingView, check out our guide on it – there are a lot of features so we have highlighted the best ones for price action forex trading.
It is definitely worth your time to look at multiple brokers and see how their charting differs, what you prefer, which ones give you the best experience.
A lot of your trading time is spent looking at charts so make sure you are not holding yourself back by being restricted in your charting software. More often than not it is worth the investment into better charting software as you will be using it every day you trade.
5. You Are Your Own Worst Enemy…
This final tip is the most important and relates to all aspects of trading. Forex trading is often a solitary and independent endeavour, and as such, only you know all the mistakes, wins, losses, ups and down you go through.
It can be quite overwhelming if you have no outlets or methods to process your work in this regard.
One of the biggest problems I see in newer traders is a lack of confidence in themselves and their progress. You have to realize that you are your own worst enemy, your biggest critic.
Negative thoughts can pile up and chip away at your confidence and ultimately prevent you from trading at your highest potential.
Find some way to process your trading and the emotions around it – and believe me, you will have a wide range of emotions, in both directions, so make sure you acknowledge that fact so you can prepare yourself.
In addition to confidence problems, you are your own worst enemy in that your mindset will dictate your trading behaviours unless you dedicate time to understanding when you are vulnerable to trading poorly.
For example, if I have just lost a trade that was very close to hitting my target but turned around and stopped out, I know that my mindset after something like that will effectively be in the toilet. Revenge trading was something I struggled with a lot, and by chasing lost trades I became my own worst enemy and was solely responsible for further losses.
Understanding yourself and your weaknesses is more important than understanding your strengths. The name of the forex game is to protect your capital and if you are aware of your weaknesses, you will excel in protecting your capital and growing your account.
There you have it, my top 5 tips for beginner forex traders. Let me know in the comments down below what you have struggled with and I will be happy to answer any questions and help out where I can. Forex trading has such low barriers to entry in today’s digital world so if you have been thinking about giving trading a try, I say go for it – you have nothing to lose!
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