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Forex trading tips for beginners

August 24, 2011 by · Leave a Comment 

There has been a significant rise in the number of people entering forex trading. Here are some tips to keep in mind when doing a trade.

1. Focus on one or two currency pairs.
Select one or two pairs only and choose a currency you are familiar with, so that you are aware of what is happening in that market. Preferably choose a pair that overlap such as USD/GBP and USD/EUR.

2. Pick the right currency pair.
As a beginner avoid choosing a currency pair that is volatile. There is opportunity to make big profits and at the same time the high risk of suffering huge losses. Do research on the behavior of currency pairs before selecting.

3. Trade in small lot sizes
Do small trades and keep the leverage small. Accounts offering 1000 unit micro lots would be ideal. Once you have mastered art of trading do the bigger trades.

4. Do your research
You need to be updated on the economies of the countries whose currencies you are trading with. Keep yourself updated with the latest news. Learn to use forex charts and graphs.

5. Choose the right time to trade.
Do not trade immediately after an announcement; wait for the market to settle.

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