A beginner currency exchange trader is very enthusiastic and often anticipates making huge profits for a short time of trading. Only a few novice Singapore traders show rationality and ask themselves a question, “Why there are so many traders, but only few of them are really profitable?”
In this article we will talk about the path of a novice trader and try to help him avoid some mistakes.
1. Keep on training!
By training I mean trading on a demo account, and after successful testing of your trading system with demo money, you can move on to a mini real account. Most traders will agree that trading on a real and demo account is very different from a psychological point of view. So start getting used to it by trading with little but real money.
By trading on a demo or mini account a beginner Singapore trader has the following benefits:
● keeps himself in a form
● learns how to feel the market
● can test new trading strategies
● can analyze his mistakes
● expands his comfort zone and increases his trading balance.
Don’t underestimate mini accounts. Even if you are an experienced trader, you will greatly reduce the risk of losing money if you test your new strategies in the mini account first. Once you make sure that your new strategy is working, you can switch to your real account and increase your profits.
2. Search for new strategies.
The main feature of the currency exchange market is that the rules of the game are constantly shifting. Due to the new economic conditions the market is constantly changing. Therefore it is better to use not one, but several trading approaches to trade the currency exchange Singapore market.
There are 4 main trading approaches:
1. Scalping; when a trade closes after a few minutes with a profit of 1 or few pips.
2. Trend trading within a day when the market makes a transition from one trading session to another (European, American and Asian).
3. Trading within one session, with a goal of 30-50 pips.
4. Long term trend trading, where you keep your trades for weeks and months. Requirements: a clear trading system and a big capital.
3. Don’t be greedy
Despite a popular belief, you can not make enough money trading with a minimum lot. On the contrary, a minimum lot is psychologically comfortable solution for a novice trader. Later, you can gradually increase the volume of your trading balance.
4. Do not trade against the crowd
Once you realize the “market’s sentiment” you should open the most of your positions in the direction of the market. A trend is always your friend. Do not try to catch short drawbacks, it requires experience and skill. First try to learn how to make small profits on strong movements.
5. No schedules
You should have a trading plan, but you can not expect making a certain amount of money every day. If the situation in the currency exchange market is not clear at the moment and you don’t understand where it is going, do not trade. Also, do not enter the market just because you are tired of waiting. Some traders say: “Being out of the market is also a trading position.”
Before entering the market it is necessarily to define the desired point of entry and the level at which you take profit or loss. You should have a good reason for each of your actions. Therefore awareness and determination are very important features for a novice Singapore trader.
6. The ratio of profits and losses
At least they should be equal in the beginning. Then try to increase profits while reducing the losses. Very often newbie traders take the profit immediately after achieving a small gain, while experienced traders let profits grow.
By placing the stop orders, try to make the possible profit higher than losses. Otherwise, your deposit will slowly melt away. If you see that the market goes against you quickly close a losing position and don’t let losses grow.
7. The margin of safety and limitation of risks
You must be ready for some potential losses. Apply a good money management when you open positions and stop orders. When the price goes against you, your account must be ready to survive such moments.
8. Limit the information
Read only good and quality information. Ignore various analysts and “gurus” saying different things. You have your own head, so use it. There is a lot of information over there, but a beginer trader should choose only reliable and useful sources of information. There is an abyss between different opinions about the market and opening a trading position.
Also we don’t recommend using sophisticated currency exchange trading strategies. An ideal trading strategy should be the one that you can explain to another trader in 3-5 minutes. All genius is simple, isn’t it?
9. Keep a diary
This is a simple and effective method to improve your trading. You should analyze not only the future but also the past (your actions and the market). If you understand why you had profit or loss in certain situations, you will trade better in the future and will make fewer mistakes.
10. Psychology and emotions
A trader must always be calm. Don’t be in a hurry, excited, greedy or scary. Keep yourself under control, and it will pay you off. Rejoice your profit after closing your trading platform. As for the losses, it doesn’t make sense to grieve. Find the reason of the losses and draw conclusions.
The currency exchange trading of any successful Singapore trader is based on rational decisions (sometimes on intuition), but never on emotions.
You, your knowledge, skills, thoughts and actions – that’s the main thing in trading. The market itself is a secondary element.
We wish you successful trading, and remember that your trading profits are very much depend on the broker you choose!
If you liked this article, share it with your friends. Sharing is caring 🙂