It’s difficult to be a novice forex trader. Once you learn the basics of how this market works, it only gets tougher. The competition gets stiffer. It is important to realize that no one can become a complete expert by reading just one blog or studying just one book.
You must constantly keep learning and staying on top of your game if you want to be successful at trading currencies for profit in Dubai. You can read more here and learn from trusted brokers.
So how do novice traders stay informed without wasting too much time? By following these simple steps, hopefully, you will avoid making some of the common mistakes made by novice traders.
Use EAs (Expert Advisors) wisely
If your broker offers an EA or automated trading software program, make sure you are using them wisely. We can build EAs to exploit certain strategies, detect patterns, and automatically execute trades without your intervention. The problem is that not every strategy works perfectly all the time.
Use free educational resources
There are plenty of free websites or social media sites where you can learn how to trade currencies in Dubai. One example is YouTube. There are many videos on there showing people’s real-time forex trading activity, including successful trades and losing ones. If others don’t know what they’re doing, then neither do you! Another example is Twitter, where many traders offer advice for novice currency traders daily, so make use of it!
Analyze the charts
All novice forex traders should always go through price analysis to make sure they are trading at the right time. You can do this by looking at key areas on your chart, such as the 50 EMA (the blue line) and 200 EMA (the red line) which are indicators of market stability, or the RSI (Relative Strength Index), which is a momentum indicator. This will give you an idea if you should enter or exit a trade.
Do your research before every trade
You may want to make trades based on gut feelings, but it is important to not let emotions impede using good judgement when engaging in currency trading in Dubai. Base your decision off of fundamental and technical analyses, and always make sure you back up your decision by placing the trades only when the market is in your favour.
Always have a stop loss
It may seem to go without saying, but many novice traders cannot set a stop-loss for their trades. Let’s say you enter a trade expecting it to go in your direction, but suddenly there was no movement after 10 minutes. They designed stop losses to limit losses when things go South. If this happens, exit the trade immediately and look at what happened before entering another. It is the best medicine for failure!
Avoid trading during very volatile periods
It gets tricky sometimes, because if everyone knows that a certain market will be very active, then they will want to trade that market. This drives prices up, which can be very tempting for novice traders looking for quick action. Novice traders should avoid trading during these periods because you’re just asking to get burned! If it’s too good to be true, then it probably is.
Don’t give in to greed or fear
Many novice forex traders make the mistake of giving in to their emotions when things are not going their way. When this happens, stop yourself from entering a trade immediately if you feel like it might go against you instead of with you. Remember, you must constantly remind yourself that your priority as a trader is to protect your capital at all times!
No matter what, never forget that trading forex should be fun! If you are constantly losing money or feeling stressed out, then maybe trading is not for you. Remember, every trade does not have to be a home run because being consistent with your gains can lead to profits in the long run.