2019 is coming to an end. You are probably going to spend much of December trying to figure out how much did you win -or lose- this year. You’ll want to figure out what you did wrong. And you are probably going to spend some time trying to see what you did right to continue doing it next year. December is the perfect month to start planning your long-term trading strategies for 2020 – and for the next decade as well. As we head into the 20s, here are 10 forex trading tips for success in 2020.
1. Understand cryptocurrency is here to stay.
When Bitcoin reached its highest price ever back in 2017, everyone was going crazy about it. Soon after, the price took a heavy fall and everyone thought crypto and Bitcoin were over. But cryptocurrency is merely at the beginning of its shelf life. Bitcoin is slowly but surely going back up (especially if you consider the 2020 halving that’s coming up) and other cryptocurrencies like Ethereum are making huge progress platform wise. Cryptocurrency is going nowhere but up. Anyone who thinks 2017 was its highest point is going to be incredibly surprised in the near future.
2. Start thinking long term to win more.
New forex traders want to make quick money following random strategies or are trying to make huge profit margins in a small window. Truth be told, most beginner traders would be better off going to a casino and putting it all on red. If you truly want to make money in 2020, you need to start thinking long term. One, five, ten years into the future. It’s going to take a lot of time, patience and knowledge. But it’s going to be completely worth it.
3. Read the data, avoid the news.
If you decided to start thinking long term, there are a couple of things you need to get under control. First of all, your anxiety levels. Second of all, how much you believe the news. Mainstream media makes money off shocking people and not necessarily on telling the truth. Believing everything they say is the worst strategy you can use in forex trading, especially if you start to panic-sell. If you want a reliable news source, you need to start looking at data charts. Study how they evolved throughout the years and what triggered ups and downs historically.
Also Read: How to Read and Use Forex Factory Calendar
4. Old trends die hard.
Once a trend cements itself and starts having a long-term life expectancy, you can choose two options: Follow the trend and make smalls profit that will accumulate over time — or you can bet against the trend and make a huge profit margin in one single move. There’s a difference between each one. The first one is smart investing, as long as you have the data to prove the trend will continue to exist. The second option is akin to betting and you’ll probably continue to lose until you get it right — by that time, you could’ve made more money following the trend.
5. Be stop loss ready if things go south.
If there is something every investor can agree upon is markets can get crazy from time to time. Especially when one tweet can make everything collapse overnight. You can only be ready for a disastrous event if you decide how much you are willing to lose — and set a stop loss right before it. Once you set a stop loss, believe it’s set in stone. Otherwise, you might remove it in the heat of the moment and regret it deeply after.
6. Hard work is good, smart work is better.
Forex trading and technology go hand in hand. Every single operation you do is digital nowadays. Because of that, you are probably at least a little bit tech-savvy. Expand your knowledge on everything technology-related and make sure you are working as smart as you can work hard — look for tools and resources online to help you earn more money more efficiently. Or you’ll be left behind by everyone else who decides to do so.
7. Take some time to know who and what you are dealing with.
Investing money can be a complicated subject matter. It’s not complex, but it’s complicated. If you have been doing this for long enough, you might have started to move on “auto-pilot”. You don’t really know what you are doing, and you haven’t been doing enough research to understand it anyways. Forex trading moves fast, and you need to learn faster. Take a step back and start checking your movements, what you are buying and what you are selling. What’s the reasoning behind every move you are making? You should also check the broker you are using and wonder if there’s something better out there.
8. Create a unique strategy.
If you have taken a moment to check your latest decisions, you can try to figure out where to go next. There are hundreds -if not thousands- of online YouTube channels, experts and money gurus waiting to tell you what to do, and you cannot listen to them all. You have to take what you like from them, whatever they do that works and make it your own. Create your own strategy and don’t blindly follow other people.
9. Use demo accounts first.
Once you know what’s your next strategy going to be, you shouldn’t use it right away. Even though demo accounts are for beginners, most veteran traders use them to see how things would do before putting real money on it. You should do the same. It doesn’t matter if it’s your strategy or a “sure thing” you borrowed from someone else, double and triple check everything using demo accounts before you put your hard-earned cash to work.
10. Set a little money on the side you are willing to lose.
You should have a little fun when you are doing forex trading. Set aside a small amount of money and go crazy with it. Use it to invest in things you never would’ve done if you were serious and forget about it if you lose it. Who knows? You might make a killing if you take it lightly.