10 Keys to Successful Forex Trading
Trading can be a very exciting adventure for you but can also be very frustrating. A great percentage of retail traders do not succeed in this game. This is because they neglected some of the key necessary for their success. A lot of factors can determine if you will be among the few that succeed in trading or among the many that fail. Here’re some of the keys to a successful trading career.
Get Adequate Training
In trading, just like in any other venture, you must put in the hard work and learn all there’s to learn. Knowledge is power. You must read good books, attend webinars, enroll in a trading course, and even get a mentor. Demo-trade until you’re exceedingly profitable. It takes several years of intense training to be an expert in any field. Trading is not different; learn all you can. You can either go for Full course or simple one strategy guide book like Elite Swing Trader. Then once you have found your strategy, practice trading it… like placing 10,000 trades on it before you even go live trading.
“Man know thyself”, is one thing I always advise. Know who you’re, your personality, your temperament, your predominant emotions, and your default reactions to stressful conditions. For one thing, it will help you choose the trading style that suits you — scalping, day-trading, swing trading or position trading. In addition, it helps you know when you’re prone to self-sabotage. It helps you to manage your emotions and keep them in check. This is very important. If you are a compulsive gambler who cannot control your own temptations, you probably should stay away from trading entirely. It’s probably for the better.
Start small and gradually grow as your experience of the market increase. Don’t be in a haste to start trading full position. Even if you have the money to trade full lot size, start with a cent account. Patience is a virtue. As you get used to the market and can comfortably manage wins and losses, you can start increasing your position size.
Choose a suitable trading time
There is time for everything under the sun — time to trade and time not to trade. In every 24 hours, there are the Asian trading session, the London/European session, and the New York session. Choose the session that suits you best and trade only that session. Avoid the greed of trying to trade all the sessions. You will only burn out. Be smart. If you do not know the time frame that’s best, then just follow what the Real Professionals trade.
Find good broker
Take your time to search for an honest broker that is fully registered with the FCA and has a good business history. A good broker is like a gold mine while a dishonest broker is like a leaking pocket. Your broker must support ECN account and allow you the freedom of setting your stop loss as your strategy allows. You should also have no problem withdrawing profits. You can take a look at some awesome brokers here.
You must have a trading strategy whether fundamental or technical. In the battle of trading, you need a strategy to know when to attack, when to defend, and when to retreat. Whichever style you follow — scalping, day-trading, swing trading or position trading — having a strategy is a must. Keep your strategy as simple as possible though. Do not use too many indicators so as to avoid confusion —analysis paralysis.
Have a Trading Plan
Having a strategy is not enough; you must have a plan for every contingency. You must have plans for taking profits, taking losses, risk management, and money management. If you don’t plan, you plan to fail. Trading is a serious business. Use your strategy to develop a robust and suitable plan that can help you maximize the potential of your trading system. Without a plan, all is doomed before you even start. Take time to sit down to plan and to think before doing anything else.
Keep a trading journal
As bookkeeping is to businesses, so is a trading journal to trading. It helps you keep a record of your trades, when they were taken, how they were taken, their outcomes, and special comments. Reviewing your trading journal will help you see your mistakes, your tendencies, and your efficiency in implementing your trading plan. The essence is to learn from your mistakes.
Control your Emotions
You must be able to manage your emotions to be able to trade effectively. Mindfully focus on the trade at hand, be courageous, and have self-belief. Fear, greed, and anger are some of the most predominating emotions when we trade. You must control your four fears — being wrong, losing, missing out, and leaving profits on the table — so as to avoid: holding on to losing trades, jumping the gun, pursuing trades, and taking profit early. Do not overtrade or revenge trade. If you do not know how you can control your emotions, I can surely understand. Here’s how I did it!
Approach trading like a business
Trading is a business and you should treat it as one. You should have a solid business plan with clearly stated growth strategies and income utilization plan. Are you going to withdraw all your profits, leave them for your account growth, or invest them in another business? Do you have a clear growth plan?
You can succeed in trading if you consistently do the right thing. Consistent winners know the keys, make their rules and keep them. Every professional in any field and any industry require hours and hours of training. Trading is no different. In fact, maybe trading requires way more hours than even a pilot. Because essentially, in the world of trading, you have to compete with other traders to make money. If you still think it’s difficult to learn how to trade, then it’s time to hire a professional trader to trade for you.
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