20 Survival Techniques for Beginner Forex Traders

In any investment market, the basic investment strategy is the same. But for the complex and ever-changing Forex market, it is necessary to master general investment strategies, but on this basis, investors must learn and master certain practical skills, because some investment skills that have been tested in a large number of practices are not only full of philosophical connotations, but also have strong guiding significance in actual combat. We have summarized 20 Forex trading and investment skills summarized and recommended by many Forex market experts here for readers’ reference, and we hope that investors can benefit from them.

1. Invest with “spare money”

Remember, the money used for investment must be "spare money", that is, funds that have no urgent and accurate use at the moment. Because if investors invest with the necessary expenses for family life, if they lose money, it will directly affect the family's livelihood. Or, when you use money that should not be invested to make money, you are already at a psychological disadvantage, so it is difficult to maintain an objective and calm attitude when making decisions, and the chance of failure in the investment market will increase.

2. He who knows himself is best

Know yourself and the enemy, and you can fight a hundred battles without danger. But in the Forex market, knowing yourself is the most important thing. Investors need to understand their own personality, because people who are easily impulsive or have severe emotional tendencies are not suitable for this investment. Most successful investors are able to control their emotions and have strict discipline, and can effectively restrain themselves. Therefore, only those who know themselves can ultimately win in the Forex market.

3. Face the market squarely and abandon illusions

The market is real. Don't be emotional, look forward to the future or remember the past too much. A senior trader said: A person who is full of fantasy, rich in emotions, and very exposed is a beautiful and happy person, but he is not suitable to be an investor. A successful investor can separate his feelings, fantasy and transactions.

4. Small investors should not invest blindly

Successful investors do not blindly follow the opinions of others. When everyone is in the same investment position, especially when small investors follow suit, successful investors will feel danger and change course. Blind obedience is a fatal psychological weakness of "small investors". As soon as an economic data is released, a piece of news suddenly flashes out, and as soon as the 5-minute price chart "breaks through", people rush to jump into the market. I am not afraid that everyone will lose money together, I am just afraid that everyone will make money. In a sense, sometimes the market trend is misjudged, or the situation suddenly reverses after placing an order, resulting in the order being trapped. This is a normal phenomenon, and even experts are not immune. However, when it comes to decision-making and post-processing, the most stupid behaviors all stem from the mentality of small households.

5. Don’t over-trade

To become a successful investor, one of the principles is to maintain more than 2-3 times of funds at any time to cope with price fluctuations. If you do not have sufficient funds, you should reduce the number of trading contracts you hold. Otherwise, you may be forced to "cut your position" due to insufficient funds to free up funds. Even if your vision is proven to be correct later, it will not help.

6. Once your mind is made, don’t change it rashly

If you have pre-determined the price and plan for entering the market on the day after full consideration and analysis, do not change the decision easily due to the impact of the current price fluctuations. Impromptu decisions based on the changes in the price and market news on the day, unless it is a flash of inspiration by an investment master, are generally very dangerous.

7. Make prompt decisions

When investing in the Forex market, there are many psychological factors that lead to failure. A common situation is that when investors face increasing losses, and even know that they can no longer take chances, they often hesitate and fail to make a decisive decision, so they sink deeper and deeper and their losses increase. When a strong man breaks his arm, it should be broken.

8. Do not implement other people’s opinions

This is not to advocate arbitrary action. You must know that only you among the investors will be responsible for the results of your own investment. When you have grasped the direction of the market and made a basic decision, do not change your decision easily due to the influence of others. Sometimes other people's opinions may seem reasonable, prompting you to change your mind, only to find out afterwards that your own decision was the most correct. Therefore, other people's opinions are always just a reference, and your own opinions are the decision for buying and selling.

9. When you are not sure, wait and see.

Investors do not need to enter the market every day. New entrants are often keen on entering the market, but successful investors will wait for opportunities. When they enter the market and feel doubtful or unsure, they will leave the market first and adopt a wait-and-see attitude.

10. Suspend buying and selling appropriately

Trading day after day may make your judgment gradually dull. A successful investor once said: Whenever I feel that my mental state and judgment efficiency are lower than 90%, I start to lose money. When the time comes, I start to lose money. At this time, I will drop everything and go on vacation. A short break from the market can help you re-understand the market and yourself, and it can also help you see the direction of future investment. Remember, if you stay in the forest for a long time, you won’t see the trees.

11. In times of adversity, take a break from the market

Investors are in a state of extreme mental stress for a long time because they are involved in the gains and losses of personal interests. If you make a profit, you still have a little sense of satisfaction to comfort you; but if you are in adversity, losing money continuously, or even making unnecessary mistakes one after another, you must be careful not to become bloated and lose your sobriety and calmness. At this time, the best choice is to put everything aside and leave the market to rest. By the time the break is over, the temporary gains and losses are a thing of the past, the bloated mind has calmed down, and the mental baggage has been unloaded. It is believed that the efficiency of investment will be improved. There is a saying, "A general who can't rest is not a good general." If you don't know how to rest, you can't defeat the enemy and conquer the city.

12. Patience is also an investment

There is a saying in the investment market that "patience is an investment", but I believe that few investors can do this or truly understand its meaning. For those who engage in investment work, they must cultivate good tolerance and endurance. Patience is often a "multiplier" for investment success, which is related to the final result being negative. Many investors do not have low analytical skills or lack of investment experience, but simply lack patience, which leads to premature buying or selling and unnecessary losses. Therefore, every investor involved in the Forex market should realize from his own consciousness that patience is also an investment.

13. Let the past price go by.

"Past price levels" are often a fairly difficult psychological barrier to overcome. Many investors make wrong investment judgments due to the influence of past prices. Because generally speaking, after seeing high prices, when the market falls, you will feel quite unaccustomed to the new low prices that appear. Even though various analyzes show that the market outlook will fall again and the market investment climate is very bad, investors will not sell their holdings before these new low prices. They will also feel that it is "low" and have the urge to buy. As a result, they will be firmly trapped after buying. Therefore, investors should remember the "past price" and let it pass completely.

14. Stop loss position, cut meat with a knife

Establish a stop-loss position (that is, at this point, you have reached the maximum loss position you can bear). Once the market reverses and the exchange rate falls to the stop-loss point, you must be brave enough to cut it. This is a very important investing skill. Since the risks in the Forex market are quite high, in order to avoid losses in case of investment mistakes, we should place a stop-loss order every time we enter the market, that is, when the exchange rate falls to a certain predetermined price, or may even fall, the transaction will be closed immediately. In this way, the losses incurred will only be limited and acceptable, and will not cause the losses to further expand or even lose everything. Because even if the meat is cut off temporarily, the investment capital is still there, and the green hills are still there, so there is no need to worry about running out of firewood.

15. Don’t be desperate

When engaging in Forex trading, you must act within your capabilities, and never put all your life savings or your entire family into a big bet like the following. Because in this case, once the market trend itself is not accurately predicted, there is a possibility of big losses or even being unable to extricate oneself. At this time, the more sensible approach is to implement the "pyramid overweighting" method, making part of the investment first, and if the market situation is clear and beneficial to oneself, then increase part of the investment. In addition, we must pay attention to preventing the emergence of an all-or-nothing mentality when the market is adverse.

16. Don’t delay things just because of a few points.

In Forex trading, do not blindly pursue round numbers when making profits. In actual operations, some people set a profit target for themselves after establishing a position, such as earning $200 before leaving. They are always mentally waiting for this moment to arrive. After making a profit, sometimes the price is close to the target. At this time, there is a good opportunity to close the profit, but it is only a few points short of reaching the target. You could have closed the market and collected money, but due to the original target, you missed the best price while waiting, and you missed the opportunity. Remember, it’s not worth the delay to argue over a few points.

17. Seeing that the situation is not right, counterattack

Sometimes you buy and sell with the market, but when you enter the market, it is almost over. You must pay attention to it. Once a reversal occurs and you see that the trend is wrong, you must counterattack. For example: after buying in the long market, the market price remains bullish. Then the market price fell sharply. Don't panic at this time, it's better to reflect on it. If you can determine that the current trend is a reversal, you should immediately cut off your position and strike back.

18. Look for market breakthroughs to establish positions

The market situation refers to a situation where the market price fluctuates within a narrow range, the buying and selling forces are evenly matched, and the market is temporarily in a tug-of-war state. Regardless of whether the market is rising or falling, once the market ends and breaks through the resistance or support level, the market price will break through and advance by leaps and bounds. For experienced investors, this is a good time to enter the market and take a position. If the market is a long-term barrier, the profit from the position established when the market is broken will be rich.

19. Be careful of the rebound after a sharp drop and the adjustment after a sharp rise.

In the Forex market, prices will not rise or fall like a straight line. If the price rises too sharply, it will be adjusted. If it falls too sharply, it will rebound. The amplitude of adjustment or rebound is complicated and not easy to grasp. Therefore, after the exchange rate rises sharply by 200 to 300 points or 500 to 600 points, be extra careful. It is better to wait and see than to follow hastily.

20. Learn risk control

The Forex market is a very risky market. Its risk mainly lies in the fact that there are too many variables that determine the Forex price. Although there are various theories and doctrines about Forex fluctuations, the fluctuations in the Forex market still often surprise investors. For investors and operators in the Forex market, it is especially important to learn a little bit about risk probability. In other words, in Forex investment, it is necessary to fully understand the risks and benefits, the probability of winning and losing money, and several major issues to prevent. If you do not have an accurate understanding of risk control and conduct Forex transactions at will, losing money is inevitable.