My Forex Tips

I’ve been trading for a few years now, most of it has been learning through trial and error. I thought I’d write this page to help speed up the learning process a little for new traders.

You’re welcome to accept my tips, or just ignore them, though I think sooner or later you’ll either go broke or come to some similar conclusions.

1. Money Management
   • Keep position sizes SMALL. Try only ever risking 1% of your capital on any single position. Doing this will keep you in the game for a very long time.
   • Leverage is a bad thing, use it with a lot of caution.
2. Practice, Practice, Practice, USING A DEMO ACCOUNT
   • You can create as many demo accounts as you like so you can get a LOT of practice, treat each demo account like you would if you really had $5k, $10k, or $100k of your own hard earned money on the line.
3. Start out small
   • When it comes to opening a live account, I highly recommend (and I’m in no way affiliated with them nor do I get any benefits from you joining, I’m just a big fan of their setup and use them for all my live trading needs) Oanda.
     • Oanda Pro’s:
       • Flexible lot sizes, means you can be very specific in your money management/position sizes. This is by far my favourite feature.
       • You can trade very small amounts. This is great when you’re starting out. I started with an $80 account. If I lost $80 then it wouldn’t be a problem, you can always add more later.
       • Setup sub accounts, this is great when you want to try different strategies, setup hedges etc. I have my account fully hedged against fluctuations in the USD so that I know I’m not actually losing money when the aussie dollar climbs. I also have a short term strategies sub account and my primary account which holds the majority of my capital. I mostly use the short term account for testing my new strategies.
       • They have web capable mobile phone access to your accounts.
     • Oanda Con’s:
       • Poor historical data (you get a years worth for daily data). To get better historical data I use metatrader on a demo account.
       • Their automated trading API is expensive, though that won’t apply to a lot of traders however it bugs me and prevents me from using them for automated trading for now.
       • Their regular trading platform is Java based which has good and bad points, it can be slow depending on your computer, though at least it runs on all operating systems.
4. Ignore technical indicators (eg. RSI, CCI etc. etc.)
   • I’m pretty sure every single reader will ignore this point, which is fine, you’ll come to the realisation that technical indicators rarely work and you’ll spend a lot of time checking them out.
5. Read as much as you can.
   • Books I’d recommend you read are here.
   • How can you hope to understand something if you don’t study it?
   • A view of the big picture is a good thing, it won’t help you much short term though it’ll help give you an idea of where things are going.
   • Don’t believe everything you read.
   • Avoid those make a million dollars overnight type of books.
6. Be patient
   • Slow and steady wins the race. Don’t expect to become a millionaire overnight (OK, maybe if your starting capital is $999999 you can become a millionaire overnight).
   • The aim of the game is to keep making steady profits rather than one big win. If you think that you’ll make one big win then feel free to send me your money. It will save you time and stress.
   • I’m of the opinion that gamblers will not be successful at trading.
7. Learn how markets interact (make sure to look beyond FOREX).

I’m certain there are many tips that I’ve missed and I’ll add them when I think about them, feel free to leave comments if you can think of something that should be added.