2020 is just around the corner and it may be time to start formulating your resolutions. And, if one of your resolutions is to become a better trader and build wealth in 2020, you have come to the right place.
There are two kinds of traders out there in the Forex market. While some traders believe that a little bit of luck and a few bucks is all you need to be a successful Forex trader, others understand that success comes with planning, constant analysis, and improved strategies. And, if you are part of the second group of responsible traders, these trading tips for 2020 will help you prepare to become a better trader.
1. Stop chasing profits
One of the most important things you need to understand in order to become a better trader in 2020 is that you must first focus on the process rather than the profits. Every Forex trader wants to build wealth and become a billionaire. And, you’ll most likely want that too.
However, this approach is actually the one that stopped you from gaining enough profit in 2019. So, you may want to reconsider your main goal next year. You need to shift your focus from making bigger profits to becoming better at trading and profits will follow too.
The best way to change your approach is to focus on the quality rather than the number of your trades. It is all about choosing to not risk more than you can lose and about choosing trades that can really teach you something about becoming a better trader.
Why is focusing on the process more important than focusing on profits? Simply because it helps you avoid setting high profile objectives that can create great emotional pressure. And, it isn’t new that emotional pressure can often lead to huge errors.
2. Embrace cryptocurrency trading
The Forex market is always changing and traders need to make great efforts to stay updated with all the new trends that can change the game forever. And, for 2020, experts forecast that the digital assets will be more popular than ever before on the Forex market.
According to Statista, there are over 328.000 daily Bitcoin transactions worldwide this year. And, since the cryptocurrency market is also expanding rapidly, experts believe that traders should take digital assets more seriously next year.
For example, Facebook’s new cryptocurrency, Libra, will be launched next year. More and more stores and businesses have introduced cryptocurrencies as a form of payment for their products and services, and Bitcoin’s price is on the rise again. So, why wouldn’t you take advantage of all these new opportunities that will reshape the market?
3. Choose your broker wisely
Choosing the right broker is like winning half the battle. Your broker isn’t just an online platform that allows you to trade currencies. It is also the one you will be reaching in case you encounter any problems during your trades.
It is highly important to choose a Forex broker that can provide you with the best customer service, a highly-functional trading platform, and the best tools that will help you become a better trader. However, when choosing your broker, you must also understand your trading needs and strategies. For example, if you want to trade with MetaTrader 5, you should choose a broker that can provide you with this platform. There are many Forex brokers offering MT5 platform for clients, so you can choose the best one from a pool of choices.
4. Work smarter than harder by using technology
Forex trading and technology go hand-in-hand by the market’s nature. The Forex market is a decentralized market in which all transactions and trades take place on online platforms. So, by default, you need to be a little bit of a tech-savvy to be a good trade.
Yet, as the market continues to develop, so is Forex technology in order to help traders work smarter rather than harder. So, these days, new and veteran traders have a number of tools and technologies to help them improve their trading decisions. We are talking about Forex trading apps, pip calculators, trading automation, and software to analyze the volatility of the market for a particular trade.
How can these technologies help you become a better trader? Well, each of them has a specific use in your trading strategies. While some may help you get a better understanding of the volatility and history of a specific trade, others can help you stay up-to-date with the latest market, financial, or political news. Whereas, other technologies can help you enjoy a “hands-free” approach to trading by doing all the work for you in trading currency pairs. That being said, in 2020, you may want to take better advantage of Forex technology.
5. Test strategies with a demo account
Profitable trades rarely start with a random pick. They usually require a well-detailed strategy that will bring the expected results. So, like it or not, you may want to get better at building and executing strategies.
There are many strategies that can be used to gain profits but it is advisable for each trader to test each of them and choose the one that fits their goals and needs the best. Moreover, apart from the large number of trading strategies to choose from, some traders decide to build their own strategy. So, whether you want to focus on Forex position trading strategies, swing trading strategies, automated strategies, seasonal trading strategies or to build your own strategy, the good news is that you can test them out using a demo account.
Most brokers offer a demo account so that novice traders can test their trading skills with no or very little loss involved. However, even veteran traders can use demo accounts to try new strategies without losing money.
What is a demo account for trading Forex? It is a copy of a real live account that gives traders all the access to all the features and functions that a real live account would have. So, traders can test their strategies by trading without risking losing any money.
The Forex market can be a little bit intimidating, especially if you are new to the game. Luckily, the tips and strategies above can help you improve your trading skills and earn a lot of profit throughout the coming year.