Tip 1
Since you are a beginner in forex trading, it is advisable that you start focussing on only one or two pairs of currency. Although it is really tempting to see so many opportunities in each pair, it is always recommended that you stick to one or two pairs only. Also another piece of useful advice is to watch all sorts of news events from all the possible countries. You must also analyze all kinds of charts and alerts as and when you get your hands on them. When you work in few pairs at a time, make sure they are usually the overlapping pairs like the euro and dollar or the euro and yen etc. This will help you in developing the trade in a sooner manner and you would thus be able to take a lot of advantage from them and also be able to manage them well.
As a newbie in the forex trading, you should ideally stick to those currencies that the other beginner forex traders are trading in.
Tip 2
Always choose a currency pair that is adjudged as a potential winner. Check and review the success rates of various currency pairs with good volumes and check thoroughly whether they are successful for the FXCM mini forex trading. Usually the worst is when the seven deadly pairs have one common point and that is the high level of volatility. It means high opportunities for huge profits, but on the other hand, it also means large losses too. One of the seven deadly pairs is the Pound and yen combination. It is also the fourth most popular currency amongst the mini forex trading. It is highly volatile but at the same time, it is also very popular as a carry trade. All these factors make the pound- yen combination a deadly and a tempting one, but you must not forget that it can also be very brutal.
In the last few years, the pound- yen combination has moved up to 1000 pips in a single day. Whoever was able to bet rightly has earned a huge profit. But at the same time, whoever was wrong with his bet probably fetched a margin call. Thus always approach the seven deadly pairs with great caution while forex trading.
Tip 3
You must have a good reason for trading a pair of currency that is not in the friendly five pairs. There are always some patterns that are formed by the carry trade. Speculators all over the world borrow low rate of interest yen and buy the high rate of interest Australian dollars or the British pounds thereby earning the differential interest. Thus it is always advisable that you follow a single pattern and get familiar with all the characteristics of the trade even when they keep changing over the years. This will help you in successful forex trading.
