The overall concept for forex trading is simple. Buy low, sell high. When you are just starting, it feels like you can never quite pinpoint how high is high enough to sell and how low is low enough to buy.
If this is you, don’t feel bad, it’s an eternal question for forex traders.
Take some perspective
In the beginning, it’s good to get a little perspective. Forex is all about timing, but your timing does not have to be perfect. If you are conservative with your lot sizes and can avoid the pitfall of tight stop trading while also avoiding trading too much, you really can survive your first month without blowing an account and having to start over. The first thing to remember is that you need to start out very small, and look at larger timeframes. For beginners, the 4 hour timeframe is a good choice. This will help to keep you from jumping in and out too often during the day.
Learn from your losses
It’s a good idea to keep a trading journal tracking your trades. Be honest with yourself and write down your reasons for each trade as you make it. For example, I went long EUR/USD because the 4 hour trend was up. Mark down what price you got in and what price you got out and any notes. This will allow you to look back at your track record as a whole after the first month and see what mistakes you might be making with some honesty.
Get over your losses quickly
Forex trading presents opportunities on a regular basis, there is no need to get beat down by a loss or two. If you feel like you are making too many losses, let your clicking finger take a rest and review your trading logs and see where the problem is. Trade on paper or on a demo account to get yourself back on track. This is difficult to do when you want to make money trading, but if you are just making losing trades anyway, stepping away can only save you money.
Remember your experience
Keep in mind that this is only your first month trading. Forex trading requires some level of experience and this is what you are working on. You will not make a million dollars trading in your first month, no one does. Losing and regrouping is part of the process that you may repeat many times before trading starts to feel second nature.
Take some downtime and keep reading
It’s very difficult to get over the excitement of the forex trading world when you are first starting. Remember to take some downtime to read and to sleep. Trading forex while you’re tired will not get you anywhere you want to be. Keep reading up on forex concepts and apply them to your trading as you master them. This is the beginning of a long road and it takes a strong level of persistence.
While forex isn’t for everyone, it is something that everyone can succeed at if they really wanted to. It takes persistence and a willingness to tackle your own psychological barriers. Forex trading success can be yours if you are willing to do the work.