Should New Traders Rely on Forex Signals?

It is a common trait of all rookie and junior traders to make the biggest and most stupid mistakes when they begin Forex trading. I’m not that experienced myself, but I have learnt quite a bit from being fascinated with trading penny stock shares on a platform for high net worth individuals to the present state of my trading knowledge and experience with Forex signals in my MT4 trading account.

Among the many notions of a new trader, is that you are going to make tons of money trading manually. Well, it’s not impossible, but you really have to be good at it and have an in depth understanding of the subject. So, I’d like to go through some errors that I made when I had just started trading Forex on a trading platform, that could have been resolved by trusting in Forex signal providers, and trading analysts as I built my personal trading approach.

Risk management

Risk management is significant. I personally have learnt that Forex trading is not completely about making money, but about risk management. Placing profitable positions and managing risk efficiently. Most rookies tend to place trades that consist of half of their portfolio, probably in the hopes that they will make huge profits. Real Forex traders, and signal providers will usually risk 2% of their portfolio on each trade and through this they minimize their risk and maximize their profits.

Technical analysis

An integral part of trading that if not used in the right way can be disastrous. It is important to note that every traders trading personality is different, so it is different strokes for different folks. I used to fill my page up to with 3-4 Forex indicators and one on the price action graph, despite being inundated with a lot of information about the direction the market was moving, I didn’t make a lot of trades because some of them didn’t confirm the trend. However, now I simply use trading signals, trend lines and channel lines with one indicator, which just makes things much easier for me.

Trading strategies

Having just learnt a bit about Forex strategies, there is one thing all traders must remember, if you can’t explain or write your trading strategy on paper, you might have a problem in your trading pursuits. There are many strategies one can use, but identifying which ones work for you and which ones don’t is bound to make trading a whole lot easier for you.

Financial markets

The financial markets contain a wide variety financial instruments ranging from spot markets (commodities, stocks, Forex etc.) and derivatives (options, futures, CDO’s, CFD’s etc.). So no, the financial markets doesn’t just stop at buying shares in a company. You can trade a variety of things on the financial markets, it’s like a buffet of financial instruments. However to trade in a specific discipline would require knowledge, understanding or a Forex signal service that already has this knowledge and can guide you properly.

Fundamental analysis

Fundamental analysis is the analysis and interpretation of economic news and information that affects whichever instrument you are trading. There is the great debate amongst traders about whether to use fundamental analysis or technical analysis to trade. It is advisable to use both, to get an in depth feel of the market, but as mentioned earlier with trading strategies, different strokes for different folks. If you prefer using technical, fundamentals or both, that is totally up to you and your trading personality.

Don’t be afraid to make losses

You won’t always beat the market, the markets have a heart and a mind of their own, totally based on how traders are buying and selling. I won’t lie, it sucks when I take a position that loses me money, but my stop loss takes me out of that position and I look for better trades. Yet, I’ve been able to mitigate a lot of these issues by using a combination of Forex signal providers to help guide me via trade alerts. It isn’t perfect, but it’s a way to implement more than one trading approach, and diversify your trades.

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