For beginners in foreign exchange, before starting foreign exchange trading, you need to carefully understand the following things. Then we enter this complex market with both high risks and high returns.

Be careful and manage your money well

Every beginner in foreign exchange needs to ask themselves three things:

How much money can I use?

What is my tolerance for risk?

What is my foreign exchange trading goal?

The answers to these three questions will allow you to choose your trading strategy and manage your funds carefully. Before making any decision on foreign exchange trading, whether choosing leverage or opposing the market, it is necessary to clearly outline your financial goals.

Do not micromanage your foreign exchange transactions

Novice forex traders often make mistakes in managing their trades. This is the wrong way of foreign exchange trading.

With countless trading strategies and a vast amount of information within reach, it is easy to be overwhelmed. However, making oneself anxious and impatient, when trading or positions are unfavorable to you, you will inevitably react impulsively.

Through impulse, you will trade more than you need, and soon you will find that you have abandoned your original game plan. If you have studied the chart and correctly outlined the key objectives, then you will want to stick to this plan instead of trying something else out of the blue.

Here are three better foreign exchange trading methods:

Do not trade with real money without ensuring that you have received at least basic education in foreign exchange

Focusing on daily price changes

Focus on daily charts; Study the high and low points generated by daily fluctuations

Learn to utilize stop loss orders

A stop loss order is an automatic closing order if it is not processed in your way. Stop loss orders will quickly become your best friend in the foreign exchange market.

But how do they operate?

Assuming you have purchased several GBPUSD (GBP USD exchange rate) through a market order of 1.2600. As a cautious trader, you have set the stop loss level to 1.2555. Unfortunately, the price of GBP/USD has rapidly dropped to over 1.2500, but we are pleased that your stop loss order will begin, thereby limiting your financial losses.

There are four main types of stop loss methods:

Chart Stop: You stop your position according to market instructions

Percentage stop loss: A typical trader is willing to lose up to 1.5% of a transaction

Time stop: Stop trading based on the predetermined length of time

Volatility stops: if the price becomes too low, too fast

The advantage of stop loss orders is that they are automatic. You just need to set them up, and then you can easily know that if the market is not favorable to you, they will be activated.