You may have heard that the majority of aspiring traders who get started on the foreign exchange market end up leaving with less money than they invested. While this still holds true in 2019, that’s not to say you can’t avoid all the major mistakes that beginners make, and actually churn out a profit.
Perhaps the biggest mistake that traders make when getting into forex is starting too soon. Educating yourself on the fundamental, technical and psychological components of this trading method is key to your success. With this in mind, we’ve put together a list of helpful pointers to show you what it takes to earn a profit with forex in 2019.
Have Realistic Expectations
Contrary to what those banner ads claiming you’ll “get rich overnight” with forex might lead you to believe, this is not the case. Just like any investment, success is the result of hard work and persistence. Smaller risk correlates to smaller profits, but these profits are still a step in the right direction, as knowledge is what drives you towards success.
This is why you should be realistic with your earning expectations from day one. Even if it means taking a loss here and there, what you learn in the process will help you avoid making the same mistakes in the future. Of course, a surefire way to avoid feeling the impact of those losses is to use a demo account, which brings us to our next point.
Practice with a Demo Account
The last thing a beginner should do when getting into forex is to start with a real trading account. This simply puts you in the position where losses are harder to learn from and will impact your trading capital. Just about every broker offers a demo account, so be sure to make the most of it and learn new strategies, while trading without any risk of losing funds.
Find the Right Broker
Your broker of choice will determine the trading environment that your forex experience will be based on. Your first step should be to choose a broker that is legitimate and trustworthy as even to this day, forex scammers are abound on the internet. Your broker should be registered and regulated by a reputable organization.
There are a variety of other elements that you should consider when choosing a broker. Your best bet would be to find a reputable website that summarizes what each broker offers and whether they’re suitable for your trading needs. Included here is a comprehensive list with reviews of forex brokers to help you know what you’re getting into.
Learn Risk Management
With any kind of trading method, having a good understanding of risk management strategies will help you avoid making decisions that have too much risk. For example, you should only invest what you’re willing to lose. This will put your mind in a clearer space and reduce the feeling of greed that comes with heavy losses.
There are many benefits to trading on the foreign exchange, but every method comes with its own risks. Being prepared, educated, disciplined and patience is key to minimizing those risks.