Newbies get started with foreign exchange speculation, understand the rules of foreign exchange trading mechanisms, understand the factors that affect foreign exchange fluctuations, learn basic technical indicators, open an account and a simulated account, first familiarize themselves with the operating process with a simulation, and then the real account deposit operation.
The most urgent thing for a novice trader is to find a suitable trading strategy/skill. One of the biggest features of the foreign exchange market is that it can make a profit by buying up or down (two-way trading). It sounds easy, but to achieve such a goal, traders need to have sufficient knowledge of the market and a good trading attitude.
Any investment, everyone starts from a novice. For foreign exchange transactions, new investors can first get familiar with the basic knowledge of foreign exchange and the definition of professional terms, understand the time of the foreign exchange market and platform selection, and avoid entering the pit.
In foreign exchange transactions, novices often make many mistakes because they do not know much about foreign exchange speculation. Novices need to master some skills when trading foreign exchange, so that they can reduce mistakes in the transaction process.
What skills should novices master in foreign exchange trading?
Tip 1: Seek profit from the trend, and lose money against the trend
Before investors enter the market, they must carefully observe the foreign exchange market, add their own basic analysis, and find a reasonable entry point to find a profitable foothold.
Technique 2: The market is not clear, do not move rashly
In the foreign exchange market, there are often times when the market is not clear. At this time, it is best for novices to speculate foreign exchange rashly. You can wait and see for the time being, and then place orders when you are sure.
Tip 3: Don’t expect to buy the lowest price, don’t delusion to sell the highest price
For novices, do not have such delusions, especially foreign exchange experts cannot reach such a point. We’d better leave some leeway in our transactions and not be greedy.
Tip 4: Make good use of stop-profit and stop-loss
I believe everyone has used stop loss and take profit, but they can be used very well. Therefore, if you want to not lose too much in foreign exchange trading, you must learn how to set stop loss and take profit correctly.
Tip 5, learn to use short positions
Some investors are very good at using funds to carry out short-term operations of chasing ups and downs, so that they can obtain high returns in a short period of time. But for a retail investor, it is difficult for them to watch the market every day, nor can they track hot spots from time to time. Therefore, when conducting foreign exchange operations, novice investors must not only learn to buy foreign exchange in an upward trend, but also learn to short positions.
Tip 6. Let it grow when you make a profit
Because everyone says that stop-loss and stop-profit are very important, many novices are particularly afraid of losses, but don’t know how to keep the art of making profits and allowing them to grow. Although the foreign exchange market is volatile, if there is already a profit, just wait patiently for your target price and set a take profit at the target price. You can get more profit when you follow the trend.
The above skills for novices to speculate in foreign exchange are not unique, but when investors have not fully mastered the technical analysis of foreign exchange, they can learn some skills and experience of others and use the essence for their own use, so that they can operate in foreign exchange. To avoid greater losses.
What should novices pay attention to when speculating in foreign exchange?
In the process of foreign exchange trading, there are many places to pay attention to, especially for novices. If novices do not pay attention to these areas when speculating in foreign exchange, then losses may already be coming.
- Excessive leverage: Although currencies may fluctuate, sharp fluctuations are not common.
- Asymmetric risk return:
Experienced foreign exchange traders control the loss to a small extent and offset it with the profit gained when the price trend is favorable
- Platform or system failure:
Imagine if you have a large position that cannot be closed due to platform failure or system failure, it may be due to power outages, Internet overload or computer crashes, and also include periods of abnormal fluctuations such as stop loss orders and other failures.
- Exchange rate fluctuations:
High leverage means that trading capital may quickly dry up during periods of abnormal exchange rate fluctuations.
- OTC market characteristics:
The foreign exchange market is an over-the-counter market, not as centralized and regulated as the futures market. This means that foreign exchange transactions are not guaranteed by clearing institutions, which increases the risk of counterparties.
- Fraud and market manipulation:
Frauds occasionally occur in the foreign exchange market. Market manipulation of foreign exchange interest rates is also rampant, and some of the largest participants are also involved
What should newbies pay attention to when speculating foreign exchange?
When novices speculate in foreign exchange, there are often some imagination or fantasy. Fantasy or imagination sometimes becomes reality. Even if it can’t become a reality, it often produces a driving effect in practice, although we are not aware of this. When a novice is speculating in foreign exchange, he may have some illusions. He considers how to defeat the market and how to distribute and use the fruits of victory after success. But in specific transactions, one must never be controlled by fantasy. Carefully analyze the various factors that affect market fluctuations, carefully study and judge a lot of information from different channels, and formulate a practical trading plan after careful consideration. It is the novice that needs the most attention.
Novices in foreign exchange speculation should pay attention to the cultivation of psychological quality. Foreign exchange is a game market. When someone makes money, someone loses money. If you want to make money in foreign exchange, you must have excellent psychological qualities. Make yourself not influenced by the market. Foreign exchange transactions are often subject to high mental stress, so you have to stay calm when exchange rates fluctuate and have a clear idea to analyze the impact of various news on the foreign exchange market. Therefore, people with poor psychological quality are not suitable for foreign exchange investment.
Holding a prejudice against a certain currency when conducting foreign exchange speculation, insisting that the currency trend is developing in a certain direction. Afterwards, gambling and making orders, the result is generally unfulfilled.
In the initial stage of foreign exchange speculation, investors in foreign exchange transactions must exercise self-restraint, because there are risks everywhere in the transaction, and investors have considerable freedom in transactions, and only strict self-discipline can ensure the safe conduct of transactions.
The first problem that novices need to understand when starting to speculate in foreign exchange is to plan and move later. That is to say, behind any foreign exchange transaction, there must be an executable trading plan. When the market is uncertain, you should rather not trade or trade at will. Don’t be misled by your own intuition. The only thing you can trust in foreign exchange speculation is the rationality of investors.
For novices who are just starting to speculate in foreign exchange, the biggest problem is that transactions are easily affected by intuition. In this case, even if you look at the direction of the foreign exchange market, you cannot get the results you want. The foreign exchange market changes rapidly, so before every transaction, foreign exchange investors have to work hard to find its operating point and then enter the market.