Achieving success with the nuanced forex market takes lots of know-how. Thankfully, the educators at IM Academy have five tips that will help you develop confidence in forex plus some new tools to consider for your plan.
1. Study the forex market
Before you put money into forex, it’s best to first learn about currency pairs and how they’re influenced. It’s a time commitment, sure. But this knowledge can earn and save you a lot of money.
Currencies are affected by various factors, such as the economy and financial markets. Let’s look at an example:
The value of the Canadian dollar (CAD) and the Australian dollar (AUD) are heavily influenced by commodity prices, as natural resources and mining account for a substantial portion of their GDP. Meanwhile, the US dollar is highly vulnerable to fluctuations on Wall Street because the index drives massive growth and revenue.
Understanding the market correlations between one’s preferred currency and other associated markets can help traders make more informed decisions.
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Do as much research as possible and learn how movements in other markets can affect your forex experience.
2. Keep your emotions out of forex
The Forex market can get intense, especially when the market isn’t going your way. Naturally, most newbies’ first instinct would be to take action in a way that isn’t in line with their overall strategy. This is a common (but big) mistake that should be avoided at all costs.
Never let your emotions get in the way of your strategy. When you know you’re losing a trade, stop yourself from going in deeper. It’s better to keep to your plan and limit your losses where you can—no need to add more cash to the burn pile.
Discipline is a learned skill. And the ability to prevent your emotions from getting in the way of engaging in the forex market is likely one of the most important foundations any successful forex trader needs to know.
IM Academy has developed an online learning portal where traders can educate themselves on every aspect of the forex market. There are different courses available, from the basics to more comprehensive coverage, and they’re affordable enough not to make a hole in your pocket.
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3. Develop a strategy and stick to it
IM Academy stresses the importance of developing a strategy and sticking to it. Your plan should tell you when to engage, how much to engage, and what to engage with. Your particular strategy will be unique and personal to you, as no two traders have the same risk tolerance or goals. Everyone has a different attitude towards risk when it comes to engaging with forex.
You can add anything you want to your plan, but you need to ensure you have the following covered as a foundation:
- What’s motivating you?
- How much time can you commit to forex?
- What are your goals?
- What is your risk tolerance?
- How much capital do you have?
- What currency pairs do you want to trade?
If you need guidance in creating a plan, register for one of our IM Academy’s forex courses. They provide you with the necessary tools to identify and stick to your goals.
4. Choose the right broker and platform
When choosing a broker, you need to do some research and compare the differences. Pricing, performance, and quality of customer service can all have an impact on your mt5 liquidity bridge experience.
Familiarize yourself with each broker’s policies and consider their procedures for creating a market. Engaging in the over-the-counter market, commonly known as the spot market, is not the same as with an exchange.
An excellent platform will also have a free demo account you can register for, where you can engage in real market conditions with fake money.
Lastly, your broker’s platform must accommodate your analysis of choice. For instance, if you prefer engaging with Fibonacci retracement levels, your broker’s platform must be able to draw Fibonacci lines.
Don’t settle when it comes to your broker platform. Find the one that’s perfect for your needs.
5. Practice Practice Practice – Then Do!
Once you’ve informed yourself and feel confident in your abilities, you can put what you’ve learned into practice. Your chosen platform will have a free demo account where you can trade with fake money in real market conditions.
Practicing with a demo account will help you build confidence in yourself and practice with various currency pairs. It will also allow you to test out the different strategies available. Remember to use this opportunity to refer to your plan when needed.
Keep educating yourself
These tips will help you develop an organized approach so you can bring your A-game to the forex market. Engaging with forex is both a science and an art — and the only way to enhance your abilities is to practice consistently.
You can register for one of IM Academy’s forex courses on our website. There are courses designed for every level of forex and forex liquidity. IM Academy aims to empower all of its students with new skills to take on the forex market world by storm.
Note: IM Academy is an educational forum for analyzing, learning,
and discussing general and generic information related to markets
and strategies. IM Academy does not provide personalized
recommendations or views as to whether a market approach is
suited to the financial needs of a specific individual. Before deciding
to participate in the forex or other markets, you should carefully
consider your objectives, level of experience, and risk.
Most importantly, do not risk money you cannot afford to lose.
You should take independent financial advice from a professional in
connection with, or independent of, research and verify any
information you find on the IM Academy website.