Forex trading offers some of the most exciting global trading opportunities one can expect to get in 2021. This huge platform, as one of the world’s most liquid markets, enables traders to leverage tight spreads and dramatically boost their earnings. However, just like with any other business opportunity out there, your success with Forex will largely depend on how well you know this market and what type of information you’ve managed to gather through analysis and research.
To help you out, I’ve put together a list of the top 20 Forex trading tips for you to be aware of in 2021 and beyond. Use these strategies and ideas to boost your confidence in trading Forex and to design a comprehensive strategy that will help you make more money in the long run.
Remember, the best traders out there always hone their skills through constant discipline, practice, and research. Make the most out of these 20 Forex trading strategies to gain an edge over your competitors and understand the best methods you have at your disposal to create winning trades, reduce risk, and keep fear & greed in check.
1. Make sure you know your trading style & behavior
Before you set out on your journey with Forex, it is mandatory to have some idea of what you want to achieve. You want to be aware of your trading style and understand how your trading behavior will impact future trades. Because every single trading style has its own risk profile, you need to get to know yourself.
For instance, if your style does not allow you to get to sleep having an open position, you should probably consider sticking with day trading. Conversely, if you think you can easily let your position stay open for a few days and you tend to be a little riskier, you should probably consider yourself as a position trader.
2. Define your goals
To become successful with Forex trading, you need to know precisely what your goals are. Understanding your trading style & behavior is just the first step of the process, which must be followed by a clear focus on your goals.
Think of what would look like failure in your own eyes, or what success would mean to you. Do you aim to become financially independent within a strict timeframe, or do you just want to make some extra bucks? Are you willing to go above and beyond to reach your goal, or you just want to test the waters at first?
Make sure that you answer all of these questions so that you’ll have a clear understanding of what your goals are and gain a clear vision necessary for a patient and persistent approach to Forex trading.
3. Choose your trading platform & broker
Choosing a reputable trading platform and broker is paramount for your success. Investing your time in researching the differences between the main brokers on the market is definitely a smart thing to do. Unfortunately, most beginners ignore this step.
An unreliable or scam broker can quickly invalidate all the gains you’ve acquired through your hard work. Thus, it becomes imperative to choose a reputable trading platform that has good reviews. At the same time, you want to work with a broker that matches your expertise level and your expectations.
To top it all, you need to factor in other details regarding the broker, such as customer service, bonuses, features, and the list goes on.
4. Choose the right account type for your needs
After you have determined your goals and chosen a reputable trading broker, it is time to look at the account type and leverage ratio you’ll want to select. As a rule of thumb, lower leverage is better.
Also, it is recommended to begin with a standard account if you already have a clear understanding of how Forex works. On the other hand, if you’re a complete beginner, you might want to start with a demo account at first and then migrate over to a mini account.
5. Start small and ramp up
It’s always a smart choice to focus on low risk and low gains at first. Invest small amounts of money and be conservative when making your trading choices. Begin small, with low leverage, and ramp up once you begin generating profit. You’ll most likely make a whole lot more mistakes in the beginning than you’ll make after one or two years of experience.
The bottom line? Start with a few hundred dollars and increase the size of your account by making smart trading choices. Once you manage to get at least 20% more, start pumping up more money, so you’ll be able to make more money.
6. In the beginning, focus on just a single currency pair
At this point, you have to realize that the world of Forex trading is complex and quite deep. Due to the chaotic nature of trading markets, it’s pretty difficult to master all the trading tools and currency pairs at once. You need to specialize yourself in a single currency pair, one that you are familiar with and understand.
Normally, you want to begin with the currency of your own nation. In case your country doesn’t have a main trading currency, you should probably stick to one of the most liquid Forex trading pairs, which all includes USD, followed by EUR, JPY, and GBP.
7. Grow your knowledge
It’s never a smart thing to trade based on rumors. You should only act based on facts and strategies that you’re confident with. In case you’re unsure about a certain strategy or you simply cannot defend it against critics, then you should probably step back and try something else that has been proven to work.
To accomplish that, you want to expand your knowledge and increase your capacity to innovate. Read as many books and articles as possible and learn from other people’s mistakes.
8. Never add to a losing position
Carelessness or the desire to turn a negative position into a positive one might make you add to a losing position. While there might be some educated guesses and your strategy might pay off in the end, it’s always common sense not to lose more money than you’re already losing.
9. Keep your emotions in check
Another important Forex trading tip for 2021 is to make sure you restrain your emotions, as they can become your greatest enemy. Greed, excitement, euphoria, fear, are never good, especially if they drive you to make mistakes. A logical, less emotional approach will always get you higher in the ranks and enable you to minimize your losses.
10. Learn from your mistakes
Becoming better at trading involves learning from your mistakes and studying your successes and failures. A professional trader will keep a journal of his trading activity and a diary, writing down his mistakes and scrutinizing the successes in order to find out what does work and what doesn’t.
11. Focus on automating your trades
Another smart Forex trading tips in 2021 is to automate your trades as much as possible. If keeping your emotions in check and learning from your mistakes can be considered an improvement on your “soft skills”, automations enable you to enhance your “hard skills” and create for yourself a profitable, highly-successful career.
Once you discover a few patterns that really work, you’ll be able to automate your trading behavior and save a whole of time in the process. One of the best ways to automate your trades is to use the correct Forex trading robots for your needs.
12. Be smart when working with Forex robots
While there are a lot of robots and automation tools out there, you need to be careful when selecting the tool you want to work with. It’s paramount to conduct your research to ensure that you choose a reliable, trustworthy Forex automation platform. There are many tools out there, but some of them might not be suitable for you.
When choosing a Forex robot, make sure to look at the reviews, study its features, and also discover the author and find out if he is trustworthy. I have reviewed some of the top Forex robots. You can find more info here (note: add here some links to some of the articles I’ve written for you, reviewing various robots)
13. Keep things simple
Another crucial Forex trading strategy for 2021 that will go a long way to ensure your success is simplicity. The truth of the matter is that Forex trading is not rocket science. Most successful traders out there are not some kind of mathematic geniuses or economic professors who have found methods to stay ahead of the curve. Instead, they are simply people just like you and me who have a clear vision, have well-defined goals, and like to keep things simple.
14. Try not to go against the markets
If you’re a beginner, this is a mandatory step for success. However, even if you have some years of experience under your belt, it’s still unwise to go against the markets. Betting against the market momentum or trying to discover new trends is quite difficult and could come with huge downfalls.
Join the trends so you can relax and gain the peace of mind that you won’t lose money in case of a mistake. Only go against the markets if you like to gamble and you have a pretty high level of confidence that you’re on the right track.
15. Make sure to understand that Forex depends a lot on probabilities
Forex is quite dependent on probability and risk analysis. The key to success is not always choosing the right strategy or embarking in the correct trading style, but in positioning yourself in such a way that losses are minimized, while profits are multiplied. To get there, you need to have a proper concept of risk management and understand more about market probabilities.
16. Recognize your failures and learn from them
Becoming successful in Forex in 2021 and beyond involves a certain degree of humility. You need to be humble enough to recognize that you’ve made a mistake, and then move forward with your lessons learned. On the other hand, if you manage to get a few successful trades, your attitude should be one of humbleness and modesty.
17. Share your experiences with others
Being a trader does not necessarily mean that you need to live alone and do your stuff, being stuck in your own void bubble. On the contrary, as a trader, you can get a real shot at helping other people. If you end up making a lot of money out of Forex trading, you should offer precious insights to other traders stuck in certain situations. This will offer you a whole new sense of self-esteem and will enable you to be perceived as a true expert.
18. Dive deeper into the study of money management
At this point, you might wonder what is the correlation between Forex trading and money management. The naked truth is that these two terms are interconnected. Once you start having a profit, it is time to minimize your losses and maximize your profits. However, to ensure that you don’t lose your hard-earned money, you want to consider investing in money management courses, which will prove invaluable in the long run in growing your wealth.
19. Always study the markets and the technical factors
This might be surprising, but many traders prefer to invest no time in studying the markets, and simply choose to go with the flow or listen to all the trading tips Forex robots offer. Once you get past the category of “newbies”, it is time to do some research on your own and gain an edge over your competitors by performing throughout market analysis.
20. Never give up
The last Forex trading tip for 2021 and beyond that I want to leave you is a quick reminder to never give up. While it’s highly unlikely that you’ll become a trading expert overnight and you’ll become financially independent within a few months, you can definitely get there with continual learning and improvement.
