Updated from its original posting on 2012-05-25
In most of the blog posts I write, I usually pull from my expertise and personal experiences to help both budding and experienced traders in their trading. But this time, I’d like to do something different.
Ananais, one of our lovely moderators, has been interviewing some of the most respected and experienced traders in the BabyPips.com community. I thought I’d go through their answers in hopes of learning a thing or two from them. After all, the learning never stops here at BabyPips.com!
After a quick read through, I was extremely impressed at the quality of insight they gave on forex trading. I have compiled some of the best ones below. Take a look:
1. Don’t give up.
I have several pieces of fairly good advice, but if I can choose only one this would be it: Learning to trade is not a sprint, it’s a multi-year marathon. Don’t give up. – Magnus a.k.a. o990l6mh
2. Go for consistency
I would urge newbies to learn the power of compounding modest, but CONSISTENT, daily profits — and, then, letting those profits grow exponentially to build wealth.
There are three elements here:
1) modest profits: don’t take huge risks swinging for the fences;
2) consistent profits : this means accurately following a trading method which has a high win-ratio; and
3) compound profits : let your profits accumulate in your account; and, as your account grows, increase the size of your trades in proportion to the size of your account. – Clint
3. No shortcuts and no excuses!
There are no shortcuts if a person is really willing to do whatever it takes to make it happen. They can become the trader of their dreams. That’s what I’m shooting for.
Why not? There’s no excuse not to become a great trader so many free websites like Babypips.com with excellent educational threads for traders to take advantage of. – Wendy Pablico
4. Proper risk management is key
Recognize that learning a trading setup is not the end of the road, it is just the very start. You must learn how to manage that position with proper risk, with a clear target, and with the trust that you must trade it every time for success. – Scott Cisco
5. Know thyself
My one piece of advice I have for newbie traders is to find out who you are as a trader! There is no quicker path to losses and frustration than to trade who you are NOT. Discover who you are as a trader and trade YOU. – Lydia Idem Finkley
6. Plan your trade and trade your plan
Plan your trades well before they happen, meaning it should have an entry, stop-loss and take-profit. Make sure you stick to your plan through thick and thin, meaning of course, win or lose…stick to the plan!
Your entry can be S&R levels, SMAs or EMAs, bounces or breach, Fibonacci levels, pivot levels, anything for that matter, but your entry is a prerequisite to knowing your stop-loss and profit target.
Without knowing these 3 key elements, there would be no guaranteed success, but of course, one could get lucky a few times, but if you want to stay in this business for the long haul, I would strongly advise to know these points before entering a trade.
All of the above means do not enter a trade on impulse, or based on your hunch or gut feeling that it will go your way. – Butch Belano
7. Start small
My advice to newbies: keep it small. Too many newbies start with way too much money. I say keep your account size small while you learn. – Casey Stubbs
8. Leave room for error
Don’t risk too much of your account at once. That’s the fast lane to burning out. Risking less means gaining more experience and becoming more profitable.
Experience with trading on a live account is no less important than acquiring knowledge of technical indicators and no less important than knowing what moves the markets fundamentally. So, giving yourself enough margin for error means that the margin call will be further away. – Yohay Elam
9. Follow your system
Write out your trading system. Whether on a Word document or Excel sheet, write out your rules, trade requirements, goals, and details of your specific trades. Additionally, have this document open at all times.
You need to have a plan and follow it consistently. I believe that having it in your face the whole time helps you not sneak in that “different” trade. – Rafael Rosa
10. Respect the market
Never be afraid to admit you’re wrong. As much as you think you know, the market always knows more. Always respect your risk & never compromise your defensive circuit-breakers. They’re there for a reason & designed to check you out of your position if changing circumstances invalidate the trade. – Tess
What about you? Do you have any forex trading tips you’d like to share with your fellow traders? Post them in the comments section below and let’s start a discussion!