Everyone loves a good tip, right?
Whether you’re an expert trader or just a beginner, a good tip can have measurable impact on your bottom line.
A few of the world’s most successful forex traders we're asked to reveal the top three tips, tricks and tactics that help them trade profitably.
And here’s what they delivered: 17 insanely actionable forex trading tips to help you become a better trader:
1. Have a Trading Plan
As the old saying goes in this industry: "Fail to plan and you plan to fail."
Any successful trader will tell you that if you don’t follow a plan systematically, you’re bound to be unsuccessful.
2. Follow a Forex Trading Strategy
While the idea of successfully trading on whims and hunches might sound good, the reality for most traders is far from that.
Develop a forex strategy. Test it thoroughly. Make adjustments. Then repeat.
3. Manage Your Risk
Practical capital management is integral to your success a forex trader - you won’t last long in the market without it.
Every trade you take inherently has some element of risk. Managing these risks in a sensible way will certainly help to keep you in the game longer.
4. Keep a Clear Mind
Your trading failure or success will largely be determined by your mindset. To put it another way, if your trading psychology isn’t what it should be, you have no hope of turning a profit.
Sadly, most traders disregard this fundamental truth or aren’t aware of how crucial having the appropriate mindset is when it comes to successful forex trading.
5. Exercise Discipline
As a trader, you have to be disciplined. This is one of the most important aspects of trading wisdom we regularly hear.
Why? Because it’s correct.
A lack of discipline will result in trading errors. And if you make to many errors... Game over.
6. Do Your Research
Prior to the opening of the market, ask yourself what is happening in the world? Are foreign markets up or down? When are earnings or economic data due?
Determine whether you want to trade prior to the release of an economic report, or after.
For many traders, it is prudent to wait until the report is issued before taking taking the trade. Professionals don’t gamble.
7. Keep a Trading Journal
Smart traders are also meticulous record keepers. If they place a winning trade, they want to know specifically how and why. More importantly, they want to know the same details upon losing, in order to avoid an unnecessary repeat.
Take note of details i.e. the exit and entry conditions of each trade, targets, resistance and support levels, the time, market close and open for the day, and the daily opening range.
Document observations about why you made the trade, as well any lessons you’ve learned from doing so.
8. Study Price Action
“Price Action” describes the characteristics of a symbols price movements.
In layman’s terms, price action allows a trader to assess the market and make intuitive decisions based on current and definite price movements, as opposed to relying only on technical indicators.
9. Be a Patient Trader
It’s a virtue… Especially with forex trading.
Developing your currency trading plan will take time. Developing skills will take time.
Waiting for the right trading opportunities to appear requires patience. Entering and exiting a trade at the right moment requires patience.
Basically, forex trading equals patience.
10. Learn to Accept Losses
There's a reason it's called forex trading and not forex 'winning'.
Unfortunately, losses are an inevitable part of forex trading and you cannot improve your trades or become a consistently profitable trader if you can’t accept that.
There is no point in obsessing over a high winning percentage; instead you need to focus on cultivating your trading skills and seeing the bigger picture.
11. Develop a Strong Work Ethic
A robust work ethic means taking essential actions to move forward and get better, regardless of whether you want to or not.
It involves being prepared for each forex trading day or week with proper research.
If you’re an automated or mechanical trader, it involves back-testing systems, continuously attempting new strategies, and adjusting settings as the environment fluctuates.
12. Don't Overtrade
Over-trading in the forex market can be indicative of either two things, (1) you might be trading too frequently in a short window of time, or (2) you might be risking too much money at any one time.
Sometimes, you might do both at once.
Regardless, both examples of over-trading have the potential to be extraordinarily harmful to your trading account.
13. Implement a Prudent Money Management System
How much of your portfolio is worth risking on an individual trade?
On any given trading day, that number can range from as little as 1% to as much as 5% of your portfolio. This figure will be determined on your risk tolerance and trading style. If in doubt, risk less and live to fight another day.
14. Follow Experienced Traders
Learn from those who are more experienced than you and surround yourself with talent. By keeping an eye on how veteran traders invest, you'll begin to understand how they think and make crucial trading decisions.
Following other traders in real time gives every trader - beginner or advanced - the ability to learn with a ‘hands on’ approach - eliminating time spent learning theory.
15. Find a Trading Buddy
The journey to becoming a professional and profitable trader can be a long and lonely road. Invest time upfront in finding a trading partner for whom you can be accountable to.
16. Be Consistent in Your Execution
Becoming a successful trader involves sticking to your proven edge. And that means being consistent.
17. Be Self Aware
Sound trading decisions are the product of continual self-awareness. You must be conscious of your own thought processes in order to evaluate (1) how they affect your view of the financial markets, and (2) how potential bias weight your decisions.
Trading tips and tricks from professional traders
Read on to discover each professional’s top 3 forex habits (in their own words) along with explanations and key insights.
Thanks to these successful forex traders for taking the time to contribute:
Andrew Barnett from LTG GoldRock
Use a strategy that has stood the test of time.
Lose small and win big.
Patience & Discipline.
Don’t lose money.
The market is rarely going to give you exactly what you want. It’s only going to give you windows of opportunity and we need to be careful which windows we step through. Traders generally continually want to see “perfect” or “just what they want” but in reality this will rarely happen.
You need a strong work ethic.
As a trader you are paid as a direct recognition of your talent.
You need to be a self starter, you need to want to seek information for yourself and want to figure it out for yourself not be spoon fed from someone else. You have to seek out the wisdom yourself and have an entrepreneurial mindset.
The best traders are seeing out trades and taking those trades before the rest of the market has realized its good value.
Knowing how to interpret the information flow is critical because information is everywhere, wisdom is not.
And finally realize that not everyone can trade.
For more visit: www.ltggoldrock.com
Three things I believe all forex traders need to have :
1) Ability to take a loss and move on.
2) Defining the loss on any position before entering a trade – how much money am I prepared to lose & not how much am I going to make.
3) Being comfortable with uncertainty.
For more visit: www.annacoulling.com
Chris Capre from 2nd Skies Forex
My Top 3 Habits:
1) I put the learning process first
Most elite level performers put more time and effort into their learning/training process than they do the actual event.
I took the same mentality and spent a lot of time training, focusing on the process more than the result.
When process, training and technique are done well, the results follow.
I never had the attitude of ‘when will I become successful’. My mentality was ‘however long it takes is however long it takes’.
So when obstacles, challenges or tough moments came, my goal was simply to find a solution, no matter how long it takes. I think this allowed me to survive the corrections and drawdowns in my performance (mental or monetary) that most give up during.
3) Mindset over Strategy
For the last 14 years, before I do anything in my day, I practice yoga/meditation. So before I traded each day, I always made sure my mindset and brain were in an optimal state.
I think too many struggling traders today focus 90% of their time on strategy and the charts, while spending 10% on their mindset. I reversed this equation, and spent more time on my mindset than anything else.
We now know through Neuroscience how meditation and exercise can increase pattern recognition, memory, neural imprinting and focus…all critical elements to a trader’s mindset.
Hence I think by sharpening the axe (enhancing my mind-state) before trading each day improved my developmental process tremendously.
For more visit: www.2ndskiesforex.com
Hugh Kimura from Trading Heroes
"I wouldn't call myself successful yet :)"
For more visit: @TradingHeroes
Jamie Saettele from SB Trade Desk
Process, preparation, and discipline come to mind as the 3 most important ‘things’ to successful trading.
First, one’s decisions must be governed by a process. The process should provide signals that you react to. You must decide whether or not to take that signal.
Second, you have to be prepared to make decisions based on the process. For me, this means marking my charts with buy, sell, and reaction levels. If/when the market trades to these points, I’m prepared to make a decision. Since the market levels are based on a process that I trust, I can make the decision quickly and confidently.
Finally, you must exercise the discipline to follow the process and do the work required so that you are prepared.
For more visit: www.sbtradedesk.com
Jared F. Martinez from FXChief
1. Always stick to my trading constitution 2. Live a well-balanced life 3. See every trade as a learning experience
For more visit: @FXChief
Joel Kruger from JKonFX
1) Don’t use a lot of leverage: This allows me to see the picture clearly and sleep well at night – both of which are critical if you want to be successful.
2) Only take trades I love: This acts as a wonderful qualitative filter for screening positions and prevents me from overtrading.
3) Know how to take a loss: You have to know that taking a loss is a part of the game and you need to embrace it. If you can’t take a loss and accept you were wrong, you will never be successful trader.
For more visit: www.jkonfx.com
Johnathon Fox from Forex School Online
To turn the question around a bit; I have conversations with aspiring traders everyday and the three things that are commonly regularly missing for them are:
2) They think in individual trades rather than a profitable edge and so they then stress and change everything including all their plans every time they have a loss instead of letting the edge work out and become profitable and
3) The biggest by far “Overtrade”.
For more visit: www.forexschoolonline.com
1) Develop a Trading Strategy and Stick with it! You have no business trading without a trading plan.
2) Find a Trading Buddy! I trade with my business partner Boris Schlossberg and the ability to discuss and swap ideas is invaluable.
3) Always, always, always stay on top of the economic events because thats what really moves markets and you NEVER want to be blindsided.
For more visit: www.kathylien.com
Lean from @leanco
If you dont have a GoodPlan, you are a GoldMember others plan. After that,stick to your plan as to the letter, be in control
For more visit: @leanco
Malte Kaub from Traders Leadership Council
My top 3 are:
1) Mastering Trading Psychology
2) Flawless Trading Strategy Execution
3) Designing a Strategy with positive Expectancy
For more visit: www.tradersleadershipcouncil.com
To be successful in FOREX Trading, mastery of the following 3 elements is critical:
Great traders DO NOT risk more than 1% – 5% of their capital per trade. However, it never fails to surprise me when I speak to some students to find out that only a handful actually follow this golden rule.
Prudent money management rules should be observed by ALL traders at ALL times for ALL trades. This helps to protect a trader’s capital and keeps him in the game for the long-term, which should be the prerogative of every responsible trader.
There are 7 basic ways to profit from the FOREX Market:
7) News Release
A trader can use one or a combination of these strategies in his trading portfolio, depending on his personality. There is no “one” strategy that is better than the other. A trader needs to have a journal that specifically records all trades, including strategies used and reasons for executions.
A trading journal should include:
– date and time of trade entry
– entry price, stop loss and take profit levels
– trade result (win/loss)
– chart snapshot when you entered and exited the trade
– explanation on why you took the trade (fundamentally/technically)
– how you felt after you entered and exited the trade
State of Mind
State deals with a trader’s thoughts and emotions. It is by far, the component which will present itself as the biggest stumbling block to a trader’s success. Four human characteristics of fear, greed, hope and ignorance will always rear its ugly head in every trade. The most difficult emotional interference in trading occurs when long-standing emotional patterns and conflicts spill over into handling the risk and uncertainty of trading.
Therefore, creating and following a trading plan is truly crucial for a trader’s success since he or she will be more objective in making trading decisions.
A trading plan should include, but is not limited, to the following:
1) A daily trading routine
2) Sources for market news and events for an overall market view, to form a fundamental analysis
3) Chart time frame for analysis and time frame for entries and exits, to form a technical analysis
4) Entry and exit criteria
5) Market conditions to trade in, e.g., trending market, ranging market, significant news events
6) Trading strategies for the above market conditions
7) Currency pairs to trade and pairs to avoid
8) Market conditions to stop trading
9) Mental conditions to stop trading
10) Amount to risk per trade – i.e., money management
For more visit: www.mariosingh.com
Navin Prithyani from Forex Watchers
I would say, record keeping (Journal), patience (avoid trigger fingers) and keeping track on what the big players are doing.
For more visit: www.forexwatchers.com
Raul Lopez from Straight Forex
1) Daily analysis
This one is probably the most important of them all, every morning, before I start looking for trade opportunities I do my analysis and try to choose the currency pairs that have the clearest conditions of them all.
Trading successfully is not about trading every day, but about trading when the odds are in your favor. And the odds are in your favor only when the market has clear swings, S&R levels, etc.
Make sure you trade only the currency pairs that have a clear market condition.
2) Loss acceptance
Once you understand that losses are part of the game, you’ll see the market from a different perspective, you’ll stop blocking useful information that could help you take better decisions.
Every morning I tell myself that its alright to lose, its our raw material, we can always learn something from our losses.
3) Adapting to the market conditions
I stopped trying to guess where is the market heading every single day. It doesn’t work.
Instead, I try to follow it, if I see the market going up, I look for long opportunities, if I see it going down, a look for short opportunities. If I have no idea of what the market is doing, I don’t trade it.
For more visit: www.straightforex.com
Rimantas Petrauskas from EA Coder
I would name these to be my top 3 habits that made my trading profitable:
1) Full automation
2) Fixed profit levels
Let me explain my habits a bit in detail.
Habit #1: Full automation: For years I have tried to become a successful manual trader with no luck. I found that a number of psychological factors draws me back and I got to do something to change this. That is why I tried fully automated trading using my own trading strategy and rules. I am a programmer so it wasn’t hard for me to code an Expert Advisor for MT4. Obviously it took me months to create a winning trading robot, but once I did that I soon realized that a fixed take profit level was a game changer in my trading. So using fixed profit levels is my 2nd habit.
Many traders try to catch and squeeze every pip there might be in a trend, but believe me, no one will ever be able to buy at the bottoms and sell at the tops consistently. When I simply switched to use fixed take profit of 100 pips I found my trading robot to make consistent profit month after month after month. Obviously that is not the best world-class trading rule, but it made difference for me.
The 3rd habit is a consistency. For two years in a row my trading robot doubled my account, but this year, 2014, it is not doing well. This was a big lesson to me which costed me hundreds of pips and thousands of dollars. The mistake I made is that I began to change trading rules and improve my strategy after a few losing months. I did that on my first trading account and it is in a drawdown at the moment. However, my second account, which still runs the same unchanged strategy, has already recovered from the drawdown. For two years my habit of being consistent with my trading rules paid off well, but unfortunately I cannot say the same about the trading results in 2014. I was not consistent with my trading rules and that was a big mistake.
For more visit: www.ea-coder.com
Steve from No Brainer Trades
1) Effort to understand trading environments and common yet discreet price behaviors. Easier said than done. Took me many years to get there and I am always finding more.
2) Longer time horizon in terms of trade length, thus reward to risk scenario.
3) Ability to switch off the opinions of others and only focus on what works statistically.
For more visit: www.nobrainertrades.com
Tim Ikels from I Trade Naked
Top 3 habits: 1) risk management no1 job! 2) pay attention to price & volume – only price pays! 3) continuous self-awareness!
For more visit: @ITradeNaked
1) Never giving up. Which mainly means close the ears when surrounding will try to take you down.
2) Never trade money that you can’t afford to lose because then the pressure of losing it won’t allow you to have the patience to profit.
3) Forget about dreams of fast cash. It’s good for dreams and sellers.
For more info: www.vladimirribakov.com
Yohay Elam from Forex Crunch
1) Never risk more than 2% of your account.
2) Dedicate more time to research than time to following your trade on charts with your nose glued to the screen.
3) Analyze also the successful trades to see if it worked as planned or if you were merely lucky.
For more visit: www.forexcrunch.com