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Forex trading is accessible, exciting, educational, and offers traders lots of opportunities. Despite all this, many traders fail to learn how to become successful traders, and don’t achieve good results in this market. In fact, a high percentage of Forex traders are losing money. Learning to trade Forex and learning how to trade in general can be difficult, and that’s why we have created this article for you.
This article will teach you how to become a successful Forex trader, and how to trade on the live markets. Additionally, it will show you the best trading practices for beginners. In fact, since you’re reading this, you are already on the right path to becoming a successful Forex trader. Below, you will find actionable advice for beginners and pros alike. Without further ado, let’s dive right in.
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What is a Trader?
A trader is someone who places orders on the market, sometimes on behalf of financial institutions (big banks, investment funds, hedge funds), or other times, as an independent trader. Exchange orders, such as purchasing or selling stocks, are either in the trader’s own name, or on behalf of clients or for the financial institution or broker that employs them.
There are several categories of traders depending on the traded markets: foreign exchange (forex), equities, bonds, metals, coffee, meat, etc. In today’s world, there is a trading market for almost all goods (meat, coffee, etc.) and commodities. Most existing contracts are settled in foreign currency, and do not deal with physical delivery.
For example, a professional money market trader manages the cash needs and surpluses on behalf of the bank or clients for which they work, in the short or medium term. A forex trader manages currencies based not only on client needs, but also on the various fluctuations expected in the short and medium-term. An equity trader, on the other hand, trades shares in anticipation of market behaviour, as the trader’s goal is to buy before the share price increases and sell before they fall.
Types of Successful Traders
As we mentioned previously, there are two general types of traders:
- Those who trade on behalf of clients
- Those who trade on a personal account
Traders who work for financial institutions or brokers buy and sell shares on behalf of their employer’s clients, and not with their own money. This means that rather than making a profit or a loss on the trading itself, they earn a salary as a trader. In this case, the trader takes virtually no risk in the market – it is on the customer buying or selling financial instruments to cover the risk. The trader’s clients may be anything from individuals to companies that do not have a trading room of their own.
Those who trade on their own personal account are using their own money to earn profit for themselves on each individual trade, and not through a salary. These accounts are funded with their personal funds, and trades are executed through online trading platforms. Even though online brokers offer leverage, the amounts traded by home traders are much smaller than those of a professional trader. Since online trading is often done on the OTC (Over the Counter) market, the success of traders in their own accounts are only estimates.
How to Become a Trader: Defining Success
Now that you know what a trader is, how can you become a trader? Better yet, how can you become a successful trader?
The first thing that you need to do when it comes to trading Forex is to understand what you want to achieve, and how you define success. What do you want to achieve?
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In deciding what you want, you have to be realistic. Set yourself a realistic and quantifiable goal. This could be something like: achieve 20% annual return on investment, earn 5000 USD of profit, get a total of 100 pips per month or something similar. Whatever you decide, your goal should also be easy to measure. What is also important is to set a goal that can be achieved over a long time frame – it is recommended to set an annual goal to achieve rather than a monthly goal.
Once you have set your main trading goal for the year, it is now time to start learning how to achieve it. The best way is to identify which resources are available to you. This may include the size of your deposit, the amount of time you are willing to spend on trading, and the amount of available funds you are willing to spend on trading-related matters (software, etc.).
Once you have a clear vision here, it is time to make an action plan. This action plan should include the currency pairs you are planning to trade and the number of trades you are going to commit to.
This can feel a bit overwhelming for new traders, so the good news is that in this article we share our top 10 tips to help you become a successful trader.
But first, if you’re a rookie trader looking for a place to learn the ins and outs of Forex trading, our Forex 101 Online Trading Course is the perfect place for you! Learn how to trade in just 9 lessons, guided by a professional trading expert. Click the banner below to register for FREE!
10 Beginner’s Steps to Become a Forex Trader
1: Set aside expectations
Problems arise when new traders become obsessed with chasing profits, and this anxiety can lead to mistakes that cause losses.
So the first rule to become a trader is to forget unrealistic goals and objectives. The prospect of earning money in Forex with just a few quick trades is extremely unlikely. Operating in a risky and overconfident way can lead you to lose your initial investment.
By setting a high profit objective, you create great emotional pressure, which could result in one of the biggest errors people make when trying to become traders: falling into excessive actions or overtrading. We will return to this concept in tip #7.
Generally, most veteran traders focus on a single thought: “Earn the money you need and don’t stress about earning more.”
As an alternative to focusing only on how to earn money in Forex, try to focus on learning a trading strategy and researching all the trading tools that are within your reach. This will help you establish a lasting approach so you can become a successful Forex trader.
2: Define your trading risk profile
Before making any substantial commitments, get a good understanding of the fundamental aspects of the market. Assess your capital at hand, read trader testimonials so you have realistic expectations of returns, and research the markets and currency pairs you’re interested in. If you don’t feel comfortable with the dynamics, don’t invest in forex, even if it’s profitable. This applies to any market.
If, on the contrary, you think that your investment approach is in line with the Forex market, go ahead!
But keep in mind the following:
- Invest only what you can afford to lose without affecting your standard of living.
- Diversify your investment, it is recommended that you do not invest more than 20% of your total investment funds in any one market.
- What is your risk profile: Moderate? Aggressive? Conservative?
- Prepare to lose. If after a series of bad trades you are willing to keep trying, forex is your market!
3: Choose a trading strategy
Once you’ve chosen to become a trader, the next step is to come up with a general strategy. There is no right or wrong way to trade, what really matters is that you define the strategy you will use in different situations.
Sometimes you will see that one trading strategy works well for a currency pair in a given market, while another strategy is more suitable for the same pair in a different market, or in other market conditions.
To become a successful Forex trader, try to focus on harmonising your online trading strategy with your risk profile. Research all the trading tools that are within your reach. Study the techniques that seem logical, and think about how they can be used in your strategy. In addition, you can study how markets behave and learn how the industry works.
Finally, if you want to succeed in trading, don’t forget to do extensive tests by backtesting your favorite markets until you feel secure in your strategy.
4: Set aside your emotions
This may sound very simple, but it is necessary. Emotions are the worst enemy of people who want to become traders. Some traders try to see trading as a game where they try to beat the market, and then when they start losing, they feel overcome with disappointment.
First of all, trading is not a game, and you should never treat it as one. Forex trading is a financial activity that is a mix of analysis and discipline. You should not blame the market, or worry about your losing trades.
To become a successful trader, you must understand the mechanics of forex, trust your analysis, and follow the rules and strategy you set. This is the definitive key to reaping the benefits of forex. Emotions can ruin a trader’s experience, so it is vital to set them aside and not involve them in trading.
If you are down, do not trade. The same goes for being excessively confident and excited: refrain from trading, or be knowledgeable about your mental state. Excessive trading confidence can cause great losses.
One of the best ways to prepare yourself for the emotions of trading is by testing your skills on a free demo account.
Instead of heading straight to the live markets and putting your capital at risk, you can avoid the risk altogether and simply practice until you are ready to transition to live trading. Take control of your trading experience, click the banner below to open your FREE demo account today!
5: Set your stop loss and take profit
No matter what your trading strategy is, you should always set a stop loss. This type of order allows you to define the closing price of your trade. Your trade will close once it reaches that level, even when you are not present. In other words, setting a stop loss will give you the peace of mind of not losing more than the limit you defined.
Note that stop losses are not a guarantee, as there may be occasions where the market behaves erratically and presents price gaps. If this happens, the stop loss will not be executed at the predetermined level but will be activated the next time the price reaches this level. This phenomenon is called slippage.
The take profit is the most frequently used order in the forex market. This order allows the trader to close a position automatically when prices reach a predefined level.
In the video below, you can learn how to set stop losses and take profits in MetaTrader 4 and 5.
6: Keep up with the markets
How can you become a successful trader? Staying up to date with market news is vital. Many market movements are driven by news, central bank announcements, political events, or the expectation of any of these. This is what’s called fundamental trading.
Even if you are a technical trader, meaning someone who makes trades based on chart analysis of a market instrument, you should still pay close attention to the fundamentals, since such events are a key factor in market movements. For example, if you have a reliable trading strategy and several technical indicators that indicate a long trade, check the forex calendar anyway to make sure your order matches current events. Even if your technical trading strategy works perfectly, the fundamental news can change everything.
7: Avoid overtrading
Overtrading is the result of seeing opportunities to make money in forex where there really aren’t any. Some people who want to become traders look for opportunities to reach their goal, but on many occasions they may or may not realise they are deceiving themselves, and this wishful thinking and is putting their money at risk.
There are two common types of overtrading:
- Trading too frequently, and
- Trading with too much volume.
Trading too frequently, outside of scalping strategies, is a sure way to lose more money than can be made.
To explain why this can be detrimental, In this Warren Buffett speech entitled ” How to stay out of debt“, Buffett espouses the need for strict discipline when investing:
“In investments, you have to wait until the opportunity is clear, because the markets are not a game. In baseball, sometimes you have to swing at many balls that you don’t expect to hit, but this is not necessary in the financial markets.
There is no harm in waiting for more than a day for an opportunity to arise. You can simply wait until favourable price action arrives, and this shows that you really know what you are doing, and that is when you enter the game. You just need a couple of trades.”
When you’re thinking about becoming a trader, it makes sense to follow this same principle in the forex and CFD market. The lesson is clear: a trader does not have to make a lot of trades to be successful, they just need to make the correct trades.
When you are trading on a live account, you must have a strategy with specific, pre-established conditions for the entry and exit of trades. Simply follow your plan and do not trade on impulse. Trade carefully, and with a lot of volume
The other context for overtrading is to operate with too much volume. For many people, leverage is the culprit.
But is this true?
As we know, forex brokers and CFDs offer significant leverage in their trading accounts. In principle, this exists to give traders the opportunity to earn money in CFDs and forex with small investments. This gives more people the possibility to become Forex and CFD traders, and thus use the services offered by these brokers.
However, in practice, abusing high leverage is still very common among beginner traders who are tempted to maximise their profitability in forex. In reality, what they are doing is maximising their real loss.
High leverage does not inherently mean falling into error. Leverage is simply a tool that allows you to operate with larger trading volumes, resulting in the trades having a larger margin. This is a double-edged sword – if the market moves in your favour, your profits are amplified. If it moves against you, the same is true for your losses.
Trading with excessively high volume makes an account more susceptible to margin calls. The important thing is to learn to avoid overtrading and understand leverage. You can learn more about leverage, you can read all about it in this article, and empower your trading knowledge.
8: Accept that, eventually, you’re going to lose
Every trader wants to become a success. In reality, ‘success’ does not mean that you always win in each trade, but that the average across all your trades end up with a positive balance. Closing each and every one of your trades with a profit is simply impossible. Some professional traders may be consistently profitable on a daily basis, but none can show a trading statement that does not include a single losing trade.
If you lose a trade, do not despair. Some of the most successful traders with decades of experience have confessed that less than 40% of all their trades are profitable, and some even cite less than 20%.
The trick to being a successful trader is for the winning trades are profitable enough that they produce enough profit to cover their losses and maintain a net positive. Keep in mind that this is very common with traders who have participated in the markets for a long time. It takes a lot of mental strength to admit mistakes in decision making, and to close an order with a small early loss.
On the contrary, it also takes a lot of strength to trust oneself and not close an operation with benefits too soon. You need to be patient and follow the trend.
9: Develop a trading plan
There has been much talk about discipline in trading, but very little about being an organised trader. It all starts with your trading routine. You need to have a strict trading plan that covers most of your trading activity, which will help you reduce risk from unforeseen shifts in the market.
Many beginning traders develop negative trading habits. One example is the aforementioned overtrading, in which once a trader starts getting lucky and they continue to trade until they overdraw their account.
On many occasions, some traders have good trades due to chance or luck, which ends up reinforcing the negative habits in trading, resulting in it being nearly impossible to break these bad habits. How can this person become a successful trader if they repeatedly leave the result of their trades to luck?
Many traders believe that luck will not abandon them, but as everyone knows, luck is not infinite and one it runs out, it will create consistent losses. Therefore, it is important to reinforce healthy trading habits, as these will help you achieve your goal of becoming a successful Forex trader.
10: Choose a broker that matches your risk profile
If you are worried about the financial security or reputation of your Forex broker, it can be difficult to focus on your trading. If, on the other hand, you have confidence in your Forex broker, this will free up mental space for you to devote more time and attention to analysis and developing FX strategies.
Research prior to committing to a specific broker can go a long way, and can improve your odds of being a successful trader in the competitive foreign exchange market.
So who is the best broker?
The best broker is not the one that promises to help you become a successful trader. The best broker will have the best answers to these questions:
- Are they regulated by any government entity?
- Will your money be protected and insured?
- How will the customer service be once you open an account with them?
- Are they a good Forex broker for beginners?
- Do they have a good trading platform?
You should take time to research the best broker for you, as will find a lot of reviews on forex brokers and all kinds of online forex broker rankings. When it comes to online forex trading and CFD trading, as well as dealing with forex brokers and CFD brokers, you should always trust yourself, as deciding who is the best Forex broker and who is the best CFD broker will ultimately come down to you.
When it comes to our thoughts on the best Forex broker, we might be biased, but we think that Admiral Markets does a pretty good job.
Admiral Markets offers over 8,000 unique instruments to trade, with industry-leading offers in spreads, low commission, as well as negative balance protection to give clients the best possible experience and chances for success.
Over 100,000 traders have chosen Admiral markets as their broker, and it’s thanks to their continued faith in our product and offering that Admiral Markets has been given numerous awards.
Admiral Markets UK Ltd. is a regulated broker, and you can read reviews of the services provided on the FPA website.
Admiral Markets also offers extensive educational resources, such as free webinars where you can learn to trade from successful professional traders discussing market movements and the fundamentals of trading. Beyond the webinars, we also have an extensive library of educational articles for you to learn every detail, strategy, and fact about the industry and market.
So, if you’re ready to trade the live markets with Admiral Markets, you can open a live account by clicking the banner below!
Bonus tip: The importance of Forex education
The Forex market is constantly changing, so traders need to be able to understand the ups and downs of this market. There is no patterned formula or set of rules to guarantee success in Forex. Instead, it is a combination of many things all at once – and to succeed in this market traders need to be patient, talented and mindful.
Understanding this is the first step in Forex learning. If you are interested in beginning your Forex education, why not consider taking Admiral Markets’ Forex 101 course, so you can learn how to trade on Forex and CFDs with online lessons from experienced professional traders, completely free of charge.
Being able to talk about ratios, charts, indexes and trading should be regarded as a skill to aspire to when you start to learn about Forex trading. In the beginning, it can be tempting to rush through your learning, but it’s important that you step back, take the time you need, and advance at a sensible rate. You need to be able to constantly evaluate your performance, and understand the reasons behind your wins and losses. Now let’s see why should you learn how to trade Forex the right way.
Now that we’ve covered the basics, let’s take a look at the steps you need to become a professional Forex trader:
Professional Forex Trading Tips
Pro Step 1: Develop your trading strategy
The most significant step in preparing and protecting long-term participation in the market is to build your personal trading strategy and to stick to it. Once your feel confident that you’ve done enough research on the instruments and technical aspects, gotten a feel for the market with a demo account, and defined a realistic risk profile, it’s time to develop your strategy.
Whether you choose to be a forex scalper or long-term investor, the point of your strategy is to develop consistency and routine. As with every other trade, practice makes perfect. The deeper your knowledge and experience with an instrument or technique, the more you’ll be able to make more consistently successful and thoughtful decisions within it. As you grow as a trader, your strategy will likewise grow with you.
Pro Step 2: Do not overtrade on a demo account
Many people want to become Forex traders, but most never move beyond trading on a demo account. The truth is that, in order to become a successful trader, your trades should consistently be making you money. And the only way they will make money is if you are trading with real money on a live account.
For this reason, it is vital to switch to a live trading account as soon as you’re ready. If you’re going to use a demo account, your goal should be to use the demo account to learn the ropes, with the intention of switching to a live account once you understand how to trade.
For new traders who are trading consistently using their demo accounts, usually a month is enough time to understand the mechanics of the trading platform and to start becoming a professional trader.
It is advisable that traders should not postpone live trading for more than three months after they have started trading on a demo account.
Pro Step 3: How to Become a Successful Trader in Forex
Finally, once you’ve established your trading strategy, and switched to a live trading account, you should move on to the next step—or steps, rather:
- Develop a trading plan and always adhere to it.
- Set stop-losses for every trade. Otherwise, failure is almost certain.
- Don’t risk more than 2% of your margin per single trade.
- Keep your emotions separate from trading.
- Never trade to compensate for your losses.
- Only trade when you feel it’s the right moment.
- Don’t be afraid of losses, every trader has them.
- Try to achieve more profitable trades, and have less unsuccessful trades.
This is the right path to follow in order to become a good Forex trader. You will be facing lots of losses and stress along the way, but don’t give up. With effort and passion, you can make up for any bad experience you may have.
If you would like to learn more about professional Forex trading, you can do so with any of our educational webinars – many of which provide you with the opportunity to learn about advanced trading psychology and candlestick trading in the Forex and CFD markets.
It’s not difficult to begin trading, and you can begin with a demo account from Admiral Markets within minutes. Simply create a Trader’s Room account, download and install the trading platform software of your choice, and begin trading! If you feel confident in your trading ability, you can instead go straight to a live account and upload your funds and start trading the markets in real time.
Being a Forex trader allows you to work from nearly any place with an internet connection. Hotel rooms, cafes, and—thanks to the latest technological developments—even more distant corners of the world. Forex traders are blessed with strong growth potential, and their lifestyle can certainly offer a lot of enjoyment. But if you’ve ever taken this path, you know this gift does not come easily. The sooner you start, the faster you’ll get there. So why not start trading now?
About Admiral Markets
Admiral Markets is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world’s most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.
How To Become a Successful Forex Trader In 2020
How To Become a Successful Forex Trader In 2020
Depending on who you ask, chances are you’re going to get a different response, of course. The average daily amount of trading in the global forex market.
When people feel emotional, greedy or fearful, that is when they make mistakes with risk, and it’s what causes failure. When you look at a trading chart, approach it with a logical, objective mindset that only sees the presence or lack of potential; it shouldn’t be a matter of excitement. If pulling the trigger on a trade feels emotional in any way, you should re-evaluate why you’re not able to be objective. So now that you know how to calculate pip value and leverage, let’s look at how you calculate your profit or loss.
Forex is the largest financial marketplace in the world. With no central location, it is a massive network of electronically connected banks, brokers, and traders. Once a trader has done their homework, spent time with a practice account, and has a trading plan in place, it may be time to go live—that is, start trading with real money at stake.
Considering Leverage in Forex Trading
With $1500, you are going to have to risk too much of your account on each trade, even when taking only one micro lot (the smallest position size). You could opt not to trade, but then you may miss out on some great opportunities. Start with more money in your account than you expect you will need, that way you can trade with greater confidence knowing that your risk is properly controlled. Those who trade on their own personal account are using their own money to earn profit for themselves on each individual trade, and not through a salary.
If you want to make an income from your forex trading then I recommend opening an account with at least $3000 for day trading, or $4000 for swing trading or investing. Play with the scenarios to find an income level and deposit level that is acceptable. The starting balance also affects our income potential. If risking 2% per trade that income estimate doubles (assuming a profitable strategy is being used). Double the starting balance, to $8000, and the income in dollars doubles again.
If this happens, the stop loss will not be executed at the predetermined level but will be activated the next time the price reaches this level. No https://en.forexdemo.info/profit-group-company-review-investor-reviews-of-dc-profit-group/ matter what your trading strategy is, you should always set a stop loss. This type of order allows you to define the closing price of your trade.
This is just something you have to keep in mind, if you want to know the best days for Forex trading. When you’re usingtrading software, you can easily track volatility. All of the data is available to you and you don’t have to search for it – especially if you’re using a powerful trading platform like MetaTrader 4 (MT4) Supreme Edition.
You should be prepared to lose whatever amount you deposit into a Forex account. If you answered no to the two questions above, you should not pursue that offer to start with $100.
I know many traders who do this, or make more than that per day consistently…but I also know even more traders who lose money everyday. To make 1% or per day, we risk 1% of our account on each trade, and make about 4+ trades per day. Overtime, assuming a decent strategy where our wins are our bigger than our losses, and say a 55% win rate on trades, 1%+ a day is very feasible. The same risk management concepts apply to longer-term trades, which means risk should be kept to 2% or less of the account.
- It is not possible for investors to profit or loss to affect their budget.
- Properly used, leverage does provide the potential for growth.
- By the way, I am only part time traders, just deposited USD2.25 into my trading account, 1 week its gain nearly 300%.
- In fact, since you’re reading this, you are already on the right path to becoming a successful Forex trader.
- John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets.
- A lot of people keep losing money every day by trading Forex.
How Much Leverage Is Right for You in Forex Trades
To put it simply, a swap is overnight interest paid by traders who hold their position between daily sessions. For instance, holding a position at the end of Wednesday’s session means a triple swap has occurred. However, this is true only in the case that the position was open over the previous weekend.
What a person needs for success is simply proper education and emotional intelligence. This means that currency prices are constantly fluctuating in value against each other, offering multiple trading opportunities. Manyintraday traders never even bother with swaps, because they never trade overnight.
Starting with $100 sounds great until you realize that it puts you at a disadvantage compared to those beginning with $1,000 or more. Becoming a consistently profitable Forex trader is hard enough without the pressure of starting with insufficient capital. Lose too much of it while trading and you may be put off by the notion of risking money in financial markets altogether. Forex brokers have offered something called a micro account for years. The advantage for the beginning trader is that you can open an account and begin trading with $100 or less.
You can learn more about leverage, you can read all about it in this article, and empower your trading knowledge. Once you’ve chosen to become a trader, the next step is to come up with a general strategy. There is no right or wrong way to trade, what really matters is that you define the strategy you will use in different situations. Once you have set your main trading goal for the year, it is now time to start learning how to achieve it.
Those who make an investment in Forex are not the only ones who can gain profit. Notably, though, if you want to earn huge amounts of money at Forex you should invest money. On the same note, you should have the knowledge and experience of trading in Forex. It’s hard to find short-term opportunities where you can deploy large amounts of a capital. And I am short-term trader, so I don’t know about things that may last longer than a week.
This calculation shows that while the trader has winning and losing trades, when the trades are averaged out, the resulting profit is one tick or higher. A trader that averages one tick per trade erases fees, covers slippage and produces a profit https://en.forexdemo.info/ that would beat most benchmarks. Currency trading is great because you can use leverage, and there are so many different currency pairs to trade. Probably not, and this is an example of why you need to know and understand what you buy and sell.
How can retail traders with the right discipline and education deal with such unjust acts by the brokers? I am an advocate of compounding on an account and would not like to victimized by my brokers for trying to grow my investment on their platform after all they are making a lot of money from spreads. Now retail traders in the US have even fewer choices while the remaining brokers rejoice over the demise of one of their largest competitors so they can consolidate even further. Most people think that they can learn to make money through Forex trading within a short time, and become a full-time Forex trader who makes thousands or even millions of dollars. There is no consistently profitable and professional currency trader who trades through the retail Forex brokers.
Developing these traits takes months of work, implementing a strategy in a demo account for months, and never wavering even when times get tough or the trade looks like it won’t work. These are just examples; you need to work out the math for how much capital you have. Spend a few months in a demo account making sure you understand the market, the risks and your own profit potential (making sure you can make a profit each month consistently) before trading any real capital. When you trade EUR futures, you are trading the EURUSD.
An order is an instruction to automatically trade at a point in the future when prices reach a specific level predetermined by you. You can utilise stop and limit orders to help ensure that you lock in any profits and minimise your risk when your respective profit or loss risk targets are reached. This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
For this post’s purposes, there are four common types of Forex accounts. I’m sure there are others, but these are what most Forex brokers will offer. If they didn’t need your name to open an account they wouldn’t ask, because they simply don’t care. Once you know the lingo, you can read a few forex books, take a few online forex courses or join an online forex trading community.
Learn How to Become a Successful Forex Trader
You have heard it said that those who make it in life take risks that pay off. Trading is all about risk. This is why you are advised to trade with disposable income. You cannot or should not risk everything you have because the odds are not always favorable.
Trading the Forex market gives traders many lucrative opportunities to make money. It is not only exciting but also available to just about anyone that is interested. Nevertheless, lots of traders start and then fall by the wayside.
Forex trading can earn you handsome profits. However, it is not easy to navigate the trading journey, especially if you are prone to impatience.
Becoming a Successful Trader
What do you hope to achieve in Forex trading? The answer to this question should inform your choices when you start trading. These choices include your preferred time frame as well as the strategy you choose.
As you figure out what you plan to achieve, you must be realistic. If you have listened to hyped up notions about Forex trading, you will lose momentum when reality hits. Set logical, achievable goals that you can meet in, say, a year.
You will then be encouraged to carry on and start seeing the possibility of achieving your long-term goals. You can then start planning how to achieve that annual goal by identifying the resources you can use.
These resources include the following:
- Your deposit
- The time you can dedicate to trading
- How much money you plan to spend on trade-related resources such as software and commissions
Your Action Plan
Once you have everything that you need in place, it is time to take action. This includes identifying the currency pairs you plan to trade. Also, you must indicate how many trades you plan to commit to.
Here are some tips to help you feel less overwhelmed as you begin your Forex trading journey.
- Determine Your Risk Profile
This should be done before you risk your first deposit. Analyze your commitments and look at the capital you have to begin with. Do not pick on currency pairs out of the blues. Read up on the ones you are interested in and figure out how much you expect to make.
If you feel queasy about the information you get, hold onto that deposit. You should not risk your money if you do not feel iffy about any of the dynamics. Only invest money that you can afford to lose.
- Select a Trading Strategy
You want to read up or even consult the experts on the strategies available. However, there is none that can be said to be right or wrong. All you need to do is to understand and define the strategy you opt for.
Coordinate your trading strategy with your risk profile and find out what trading tools are available to you. Look at the various techniques and pick the ones that appeal to you. Also, analyze the markets and how they behave.
- Do Not Trade with Emotions
You may be tempted to laugh at this one with a ‘duh’ sounding in your head. However, there are traders who go in with the notion that they are going to beat the market. If that does not turn out the way they planned, they become emotional.
Do not approach Forex trading as if it were a game; because it is not. It is a financial activity and money is serious business. Expect to lose sometimes and avoid blaming the market.
To be a successful Forex trader in HK, you must stick by the rules and strategy you set for yourself. Moreover, you must be disciplined and patient. Strive to comprehend the dynamics of Forex trading and avoid being emotional even if you suffer a loss. Most importantly, only trade with money you can afford to lose. Set achievable goals and analyze the currency pairs you want to trade in before risking your capital.
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