27 Forex Trading Tips You Should Know to Be Successful

Want Forex trading tips and tricks? Need to succeed in a market which takes no prisoners? Make sure your Forex trading strategies incorporate these ‘secrets hiding in plain sight’.

Research suggests that about 80% of people fail – and only about 20% succeed at Forex trading. So are you winning? Or are you losing?

What does it feel like to win? And what does it feel like to lose? I know how I used to feel – awful. I vowed to do something about it. And I did. You can too.

Want to get into the winners’ circle? These aren’t just Forex trading tips for beginners. They’re for everyone. I don’t care if you’re a beginner, intermediate or advanced trader. Ignore these at your peril.

But don’t just read these tips. Print them out. Highlight them. Learn them forwards, backwards, sideways. You’ll be glad you did.

Right, with no more ado, let’s get going!

Tip 1. Get a decent Forex broker.

It doesn’t matter who your broker is as long as they’re right for you. Personally I’ve used FXCM for the last 10 years. I like their software and graphics.

Some of the spreads are high but, if the trade’s right, I’ll live with high spreads. If the trade’s not right regarding the spread – or anything else – I simply won’t take it.

But hey, that’s just me. You find what works best for you. If need be, ask around.

(By the way, I have absolutely no commercial relationship with FXCM, no affiliate link, nothing, nada. The only person I’m bothered about here is you.)

Tip 2. Start with a Demo (i.e. practice) account. Do not start with real money.

The first time you got into a car to learn to drive, you didn’t shoot down the motorway at the fastest legal speed (well I hope you didn’t!) Instead you started to learn. It’s exactly the same with trading.

Tip 3. Get the right Forex graphics.

Before I started currency trading, I used to think it was all about masses of numbers on a screen – which sounded unbelievably dull. Once I realised that everything was graphic, it became far more interesting. Personally I use candlesticks.

A glance at any candlestick will tell me an awful lot. In fact a glance at any currency chart of candlesticks will almost immediately tell me what I need to know.

If candlesticks work for you, then great. If they don’t, use something else. Always use what’s best for you.

Tip 4. Don’t be a mug punter

Forex trading is gambling (which also means it’s tax-free). In any form of gambling, professional gamblers generally win while amateur gamblers invariably lose.

In the UK, amateur gamblers used to be known by bookmakers as ‘mug punters’. Conversely professional gamblers spend time learning valuable skills. Yes, of course they take risks – but they’re rigorously calculated risks.

Don’t be a mug punter. Be a professional gambler. There’s a huge difference. One loses; the other wins far more often than they lose.

Tip 5. Check the Forex news.

Always check the Forex news before taking a trade. If it’s high impact, don’t trade. The news might not affect the trade but then again it might affect it. It might push price for you but then again it might push price against you.

Either way you’re blindly gambling – which is a recipe for ultimate disaster.

Worse, increased volatility caused by news can stop you out prematurely and then price runs away to hit your target. Believe me, this hurts. (Just don’t ask me how I know!)

Tip 6. Know your Forex entry point; know your Forex exit point.

Always have defined entry and exit points. These are second only in importance to your stop-loss. Know exactly why you’re entering at point A and exiting at point B.

Tip 7. Always (always, always, always!) use a stop-loss.

If you ever take a Forex trade with real money and without a stop-loss, then you’re stark raving mad. (Sorry to be blunt but it’s for your benefit.)

Trading without a stop-loss is the financial equivalent of driving with a blindfold. You have potentially unlimited financial liability. Don’t do it.

Tip 8. Never move your stop-loss away from the Forex price.

If price comes to your stop-loss and triggers it, you’re stopped out – game over. At least you played the game with discipline. Well done.

But if you move your stop-loss away from the price, then you’ve abandoned discipline (assuming it was in the right place to begin with – which it should have been).

Abandoning discipline may (or may not) win you a particular trade. In the end however – and maybe a whole lot faster than you think – it will financially kill you.

Tip 9. Avoid losing money.

This one may seem a little strange. After all, people go into Forex to make money, don’t they? But the sad truth is that most people end up losing money. So my best advice to you is firstly to concentrate on avoiding losing money.

How do we do this? Well… read on.

Tip 10 . Have strict Forex money management rules.

I have three money management rules which I will never break. The first is not to put more than 2% of the capital in my account on a single currency trade. The second is not to have more than 5% of my trading capital at risk in the market at any one time.

For instance, I might have two trades running concurrently, get my stop-loss to breakeven in one and then open a third trade (so I have 4% of my account at risk).

I’ll never have more than three Forex trades running at once because I simply can’t manage the concentration required. (Really two trades is pretty much my maximum. I’m not a great one for multitasking – I leave that to much more talented people.)

The last rule is that if I lose 10% of my trading capital, then I’ll go back to a Demo (practice) account until I have three consecutive winning batches. Thankfully that’s never happened.

Tip 11 . Get your stop-loss to breakeven as soon as you reasonably can.

Once your stop-loss is at breakeven, you can’t lose. Effectively your Forex trade has turned into a free lottery ticket – i.e. either you win or you get nothing. But – most importantly – you can’t lose.

Tip 12. It’s about the batch, not the individual trade.

One winning (or losing) Forex trade proves nothing. You might be the worst trader in the world and have a lucky win. You might be the best trader in the world and still lose (nobody has 100% success). What matters is a batch. A batch is 10 trades with an identical method in each case.

The result of one trade is statistically irrelevant. The result of a batch is statistically relevant.

When your Demo batches are consistently successful, then and only then is it advisable to start using real money. But please – start small.

Tip 13. Your ‘confidence capital’ is just as important as your financial capital

What do I mean by this? Unless you have confidence in your particular currency trading method, you will be at the mercy of your emotions. Let’s imagine you enter a Forex trade and the price moves massively against you.

Unless you have very good reasons indeed as to why the price should move in your favour, it’s highly likely that your anxiety level will spike. This will give you stress and increase the chance of you abandoning your trade. If you abandon the trade, your self-discipline has gone.

Your ‘confidence capital’ should be founded on one thing and one thing only – the consistency of your track record, i.e. winning batches.

Tip 14. Scale up carefully

With scaling up, you’re putting more money on each trade. (It should still never exceed 2% of your trading account.) But if you go from £5 a point in one batch to £50 a point in the following batch, it’s highly likely that you’ll be a bag of nerves when trades are going against you.

It’s just not worth it. If you’re doing things right, you’ll get there in the end. In Forex trading, patience is your greatest strength.

Tip 15. Never take a revenge trade.

So called revenge trades are ones where the trader gets mad at the market (usually because they’ve lost when they feel they should have won). The trader feels that the market somehow owes him/her a win. It doesn’t. And it never will. If you take revenge trades, irrespective of whether they’re successful or not, ultimately you will lose. It’s simply a matter of time.

Tip 16. Abandon greed and fear.

The Forex markets depend on greed and fear. (In fact all markets depend on greed and fear.) And you are trading the markets. But if you are subject to greed and fear, you will join the 80% who lose. The 20% who consistently win have learned to be dispassionate, to control emotions which don’t serve them well.

Tip 17. Don’t get obsessive.

In Forex trading, there are many ways to get obsessive: e.g. the trade you lost, the trade you missed out on, the trade you didn’t take. But if you become obsessive, then you’ve already lost.

Tip 18 Learn from every trade

Log every Forex trade. Analyse every trade. Learn from every trade. Your losing trades contain your greatest lessons (especially in the early days). Cherish those lessons.

Tip. 19. Accept that the market is never wrong – and never will be wrong.

You may feel that there are compelling reasons why the price of X should move up (or down) against the price of Y. And you might be absolutely correct. But can you move the market? No.

So it doesn’t really matter what you think – or what I think. All that matters is what people with large sums of trading capital think. Sure, they might all be ‘wrong’ according to your point of view (unlikely but possible). Tough. What they say goes. They can move the market. We can’t.

A price is simply the intersection of buyers and sellers. If the price of something is £10, then that’s what some people are happy to sell it for and that’s what other people are happy to buy it for. It’s exactly the same principle for currencies such as the Euro, pound, dollar and yen.

Tip 20. Regard currency trading as a skill – no more, no less.

Forex trading is a skill – like playing the piano. Nobody would expect you to sit down at a piano for the first time and somehow produce great music.

For any pianist, there has to be a learning process, an apprenticeship. Exactly the same applies to Forex trading. You may be the most intelligent person on the planet. You still have to learn the skill.

Tip 21. If a trade’s not there, it’s not there.

We can’t force trades to happen. If they’re not there, they’re not there. If there are no fish in a river, there’s no point going fishing. Best forget about trading for the time being and do something else.

Tip 22. Don’t take marginal trades.

Professional traders move the Forex markets. So we should be copying them. Would they take marginal trades? Would they risk vast sums of money? The answer’s obvious.

If they don’t risk it, then please don’t you risk it either.

Tip 23. Learn from other people’s trading mistakes.

The best learning comes from our own mistakes. But it’s also the most painful. Every mistake that you make in Forex trading will have been made countless times before. A good coach or mentor will help you to avoid what doesn’t work – saving you from emotional pain and financial loss.

Tip 24. Never stop learning about Forex trading.

I’ve rock climbed for 55 years; I’m still learning about it. I’ve traded currency for over 10 years; I’m still learning about it. You’ll find that people at the top of any discipline have committed themselves to never stopping learning. That’s a big part of why they’re successful. Copy them.

Tip 25. Get a good mentor or coach, if you possibly can.

I suspect it’s well nigh impossible to watch a few videos or read a few books and produce consistently winning trades. For instance, a crucial component of my trading method is a ‘secret’ indicator which major market movers set huge reliance on.

I doubt that anyone could work out the importance of that indicator and its precise setting on their own. Somebody confided in me – and I paid a high price for that knowledge. Somebody confided in them – and again a high price will have been exacted. But it was worth it – to them and me.

Your mentor or coach doesn’t need to be the best trader around. But they do need to be competent. And they need to be good at teaching – which is a very different skill indeed to trading.

Tip 26. Your Forex trading should not determine your self-worth.

I’ve known people whose self-worth was dependent on their professional positions and their bank balances. If they lost their jobs and saw their bank balances plummet, their self-worth collapsed. This is no way to be.

You may be a bad trader and a good person. You may be a good trader and a bad person. (Ideally I’d like you to be a good trader and a good person.) Please don’t link your self-worth to your trading ability. There’s more to life than trading

Tip 27. Have a life beyond trading.

The major Forex markets are open 24 hours a day for five days a week. Well I don’t know about you but I don’t want to be sitting staring at a screen for 120 hours a week.

The whole point of trading is to have a better life. If you sit at a screen all the time, you won’t have much of a life. And, chances are, you’ll get so tired that you’ll probably end up losing.

Please – have a life beyond trading!

Conclusion

I hope you found these 27 Forex trading tips valuable. Some of them took years for me to develop. I paid a high price along the way.

The least painful way to learn anything is from other people’s mistakes. So please, when it comes to Forex trading, learn from mine. You will find that these tips are very powerful indeed.

Now take the next step on your journey to trading success and financial freedom.

Grab your FREE copy of the Ebook: ‘My Forex Struggle – What I Finally Learned’.