Secrets of Successful Forex Traders
Forex is perhaps the best place to start a trading career. And why not? Forex with all its flexibilities has proven to be the largest trading market in the world with an average daily trade of US$2 trillion and more. A trader with an urge to trade can find gold in forex. But forex trading is not just about playing cards and waiting for what you are destined for. Many things on your part decide your success in forex trading. Below are the secrets of successful forex traders. Take them to heart and you will definitely be on your way to success.
1. Trade with a plan:
Set goals before you venture into Forex trading. Define the results, not only what you will do when you get it right, but also what you will do if you get it wrong. Determine the amount of capital you are willing to lose and, conversely, define when you will make a profit. Letting the market take your profits by holding a losing trade is not a good strategy. Write a business plan on paper and stick to it. Don’t become a victim of emotionally involved buying or selling.
2. Nobody wins 100% of the time.
Many people enter the forex market focused only on profit and do not consider losses. If you think for a minute that you are going to win 100 percent of the time, you are wrong. Losing is only part of the cost of doing business. Your goal should be to make sure you control risk and not blindly risk your money. You must realize that you will never learn how to win until you first learn how to lose. How you handle loss psychologically is really the difference between an amateur and a professional. Professional forex traders do not react the same way as an amateur to loss. When a professional trader loses, he simply says next. They don’t take loss personally.
3. Always use the stops.
Proper use of stops will protect profits and limit your losses. Consider the stops as a profit and loss insurance. When you enter a trader, place a stop to limit the loss in case the trade goes against you. When the trade becomes profitable, you use them to lock in a profit.
4. Be patient and let time be your friend.
Earning money safely takes time. The only time to hurry is when you’re in trouble. Remember: “Not every day is a trading day. Just because you want to trade doesn’t mean you should. Only trade when the odds are in your favor and let the market come to you. The market will do what it’s going to do “. to do and what you want is irrelevant. Be patient and make time your friend instead of your money.
5. Learn from your mistakes.
The most successful forex traders learn from their mistakes. Many even go so far as to write down what went wrong and analyze the problem. Mistakes can be costly, so use them as learning experiences and don’t make the same mistake twice.
6. Measure your results.
Too often, forex traders may have a good plan, but then lose sight of measuring their results on a regular basis. What happens is that 90% of your trades may be successful, but it is those 5-10% of your trades that eat you up with huge losses. If you monitor your results closely, you should begin to develop a “success profile” that defines what your best trade should look like. Once a trade no longer fits this success profile, you should look to exit, either profit or loss, as your edge is no more.
