Rule One: Demo Account First, when you start thinking about entering forex trading, everyone should open a demo account and trade with virtual money before starting to trade with their real money, as the movement of the markets must be well understood.
How long does it take to train in the demo account?
The answer to this question is “more period than you think.” The education period does not have a specific time, it varies from person to person. The goal of demo trading is not only to prove the success of the trading method used and its ability to achieve continuous profits in the real market, it is also about knowing Better yourself as a trader!
The second rule: Never risk an amount more than you can afford to lose, because you will inevitably lose some money, as is the case with most traders, as the loss is part of the forex world and cannot be completely avoided, as there is no absolute profit and no 100% expectations for the success of a transaction The forex market is known for its highly volatile nature. Correct capital management is part of risk management, and the amount of the transaction size must be known relative to the amount of your trading account.
What is the appropriate lot size to enter the trade?
Never risk more than 2% of your trading account in a single trade, and here we will explain some recommendations in trades for the contract size in relation to the capital:
$100 = 0.01
$500 = 0.03
$1,000 = 0.06
$2,500 = 0.16
$5,000 = 0.30
The third rule: Always use the stop loss order, as it is the easiest way to exit any transaction with the least losses and adds more protection to the trader’s account and limits the risks, as the stop loss order can be modified at any time when the deal is open, and it is of two types: fixed stop loss and moving stop loss.
How can I place a stop loss order?
Placing the order and how many “PIP” points is far from the opening price of the deal. This depends on the trader’s trading style and the amount of risk he follows in his trades, as well as the capital. It is not preferable to place it close to the market price at which the deal was opened, or in an area where the price is difficult to reach!
Fourth rule: Be aware of the exit point before you enter the deal. risk of your trading account.
What are the ways to determine entry and exit points for a transaction? There are many methods used to determine entry and exit points when starting to trade in forex, the most important of which are: identifying the trend, using support and resistance levels and technical indicators.
The fifth rule: Take a break when your balance declines significantly, the forex market is more volatile and is affected by news more than the stock market, so some traders feel frustrated at the loss and return to take revenge on the market by opening random and completely unthoughtful deals, and this is the biggest mistake that most traders make, especially beginners.
What do I do when I lose the deal?
The most important tips that you should know before opening any trade:
Determining the trend: The market direction must be understood, as it is the most important element for determining the pairs chart, as it is easy to identify the trend through the technical indicators “moving average” and “Fibonacci channels” and many others and can be identified on our YouTube channel.
Determining levels of support and resistance: Support lines are always located at the bottom and resistance lines are at the top, and they can be identified through the technical indicators “Bollinger Bands” and “Pivot Points” and many others and can be identified on our YouTube channel.
Determining price patterns or patterns: Many movement patterns are formed during a period of time and form a model that is adopted by traders and the future price movement is predicted through these models, the most famous of which are the “head and shoulders” and the “triangular pattern” that can be identified through the article on our website.
The sixth rule: Do not let your feelings control you, stay alert, calm and able to collect your thoughts. The psychological state of the trader is one of the basic ingredients for the success of the trading process, so the psychological state of the traders must be stable, and since trading is a work that contains risks, the psychology of the traders must be disturbed because of this, giving in to emotion and feelings may eventually lead to losing an account or missing out on trading opportunities that you didn’t seize.
What feelings should be avoided during trading?
Patience and a pure mind win the game. Traders should avoid fear of trading and not understanding the chart, multiple trading strategies, technical indicators and economic news, greed to increase profits in an exaggerated manner, worry about making the right decision to enter and exit the deal, hope for big profits and that all Trading strategies will achieve 100% profit, regret from entering the deal late or withdrawing from the deal too soon and did not achieve the desired goal.
