Tip 4: How to make forex trades

Beginners do not understand leverage

Many beginners conduct transactions without understanding the volume at which they are buying and trading.
I once heard a beginning investor claim that he was making a killing by trading at a 100:1 margin on his one million yen in funds, but he was just experiencing positive returns by chance. His returns could turn negative before he knew it.

Cutting losses is the greatest benefit of forex trading

While some investors do not cut their losses, doing so definitely is recommendedA stop-loss system is the greatest benefit of forex trading.
In the case of other investments such as equities, when the price of a stock such as Livedoor collapses, even if an investor wants to liquidate his or her holdings sometimes he or she may be unable to do so for 14 days or so.
Transactions such as credit transactions may all result in losses.
Forex trading is highly recommended because investors can cut their losses whenever they want.

Never set definite goals for returns

While investors often try to set goals based on success theory, trying to meet fixed goals, such as earning a certain amount per month or trying as hard as one can to increase earnings in a month in which they seem low, can lead one to grow more enthusiastic about trading without even noticing it, possibly leading to increased leverage and to holding an unsustainable position.
An investor must not get too enthusiastic.
Setting definite goals for returns can lead to failure in the market.

Sometimes it is good to take a step back from the market

In some cases, when an investment is not generating returns, it is simply because the price itself is not sustainable.
The opposite is true as well: sometimes an investment generates returns without the investor doing anything.

Sometimes it is good to take a step back from the market.

If an investor is doing poorly in the market, it may be a result of the decisions the investor has made, or it could be because the market itself is performing poorly.
In either of these cases, it is a good idea to step back from the market.
It is important to take a break and cool one’s head.

Eight tips for Forex trading in Japan