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Forex Tutorial: Forex Trading Tips

Here are time-tested tips for success in forex trading:

Learn the basics about forex and demo trading first.

Choose a good broker with low spreads, fast execution, solid system and quality services.

Starting trading with smaller size first.

Compute the risk/reward Ratio before opening a trade. Apply at most 1 to 3 risk/reward Ratio to a position.

Do not risk more than 5 percent of a forex account on a forex position.

Make a trading plan before starting a trading day.

Check with multi-timeframe charts.

Timing of entry and exit is crucial for profit in forex trading.

Support and resistance levels are often good entry and exit points.

Let profits run, cut losses short.

Use protective stops.

Avoid placing stops at round numbers such as 50, 100.

Support and resistance levels are often used as stops.

Add to winning forex positions.

Start analyzing the market by determining the general trend: uptrend, downtrend, or range.

Diversify your forex positions to a proper degree.

Be patient in trading.

If the price fails to move up to bullish news, it is a bearish warning. If the price does not go down at bearish news, a bullish reversal may be pending.

It is often a good strategy to buy the dips in upward trends and sell bounces in downward trends.

The more time it takes to form a pattern, the more significant the pattern is.

Avoid overtrading.

Evaluate trade performance, and take lessons from losing trades.