Making a livelihood from the Forex market is very real and achievable if one puts all factors into place when it comes to trading. A lot of beginners might be going through difficult times trading and making consistent profit from the currency markets. Do not worry or rebuke yourself because every professional trader has been through this phase. 85% of beginners end up blowing there 1st trading accounts, so this is not new. However developing yourself over this trying phase and being where you want to be is what is most paramount. To become a consistent profitable trader is not as easy as it sounds but non-withstanding implementing these important Forex trading tips could be very useful, rewarding and life changing.
REALIZE THAT FOREX TRADING IS ALL ABOUT PROBABILITY:
Forex is all about risk analysis and probability whether you like it or not. There is no single method or trading system that will generate profits all the time, this is why there is no ‘Holy grail system in trading the currency markets’. The key to success is positioning our psyche in such a way that loss trades are inevitable; hence you have to program these loss trades to be harmless, while the profits are multiplied. Such a positioning is only possible by managing our risk allocations in accordance with an understanding of probability and risk management. So please if you analyse a market and it negates your analysis, please do not be hard on yourself. This will cause you more harm on the long run and affect your trading decisions.
DEVELOP AND CHOOSE A TRADING SYSTEM THAT SUITS YOUR PERSONALITY:
After accepting tip 1 as a fact about trading the Forex market, researching for adequate knowledge about the market is the next step to take. There are several trading systems all over but one factor beginners fail to comprehend is that you have to develop and choose a trading system that suits your personality. We have 3 major types of trading styles in the market which are technical trading, fundamental trading or combination of both. A trader must decide which is best for his emotion, all trading method are very profitable if well understood and mastered. Do not try to copy what others are doing because it might not work for you, make sure you develop your own personal trading methodology.
PLAN YOUR GOALS. STICK TO IT THROUGH THICK AND THIN:
Once you know what you want from trading, you must systematically define a time-frame, a target and a working plan for your trading career. What constitutes failure, what would be defined as success? What is the time-frame for the trial and error process that will inevitably be an important part of your learning? How much time can you devote to trading? Do you aim at financial independence, or merely aim to generate extra income? These and similar questions must be answered before you can gain the clear vision necessary for a persistent and patient approach to trading. Also, having clear goals will make it easier to abandon the endeavor entirely in case that the risks/reward analysis precludes a profitable outcome.
START WITH LOW DEPOSITS, INCREASE THE SIZE OF YOUR ACCOUNT THROUGH PROFITS NOT BY ENORMOUS DEPOSITS:
It is a clear fact that the same result generated on a small deposit size account is the same result that will be generated on a large deposit size account. In other words the output on the management of a $100 account is the same output that generated when equivalent to a $1000 account. This means if you cant manage and make consistent profits with a $100 account, you can never manage and make consistent profits on a $1,000 account. A lot of beginners have a wrong mindset about not having enough capital in their trading account and blame their ill luck on it. There is no justification to the idea that a larger account will allow greater profits. If you can increase the size of your account through your trading choices, perfect. If not, there’s no point in keeping pumping money to an account that is burning cash like an furnace burns paper.
CONTROL YOUR EMOTIONS:
Greed, excitement, euphoria, panic or fear should have no place in traders’ calculations. Yet traders are human beings, so it is obvious that we have to find a way of living with these emotions, while at the same time taming them and minimizing their effect on our lives. That is why traders are always advised to begin with small amounts and also using proper money management. By reducing our risk, we can be calm enough to realize our long term goals, reducing the impact of emotions on our trading choices. A logical approach, and less emotional intensity are the best Forex trading tips necessary to a successful career. A 70% balanced emotional trader with just 30% of trading skills will most times out shadow a trader of 70% trading skills with 30% balanced emotion. Emotional management should not be joked with in trading because your trading career depends solely on it.
HAVE A DATABASE. RECORD YOUR SUCCESS AND FAILURE:
An analytically approach to trading does not begin at the fundamental and technical analysis of price trends, or the formulation of trading strategies. It begins at the first step taken into the career, with the first dollar placed in an open position, and the first mistakes in calculation and trading methods. The successful trader will keep a diary, a journal of his trading activity where he carefully scrutinizes his mistakes and successes to find out what works and what does not. How he can improve his trading and also correct his mistakes.This is one of the most important Forex trading tips that you will get from a good mentor.
DO NOT RELY ON FOREX ROBOTS, SEARCH FOR HOLY GRAIL METHODS AND OTHER SCAM PRODUCTS:
Surprisingly, these unproven and untested products are extremely popular these days on the internet, generating great profits for their sellers, but little in the way of gains for their excited and hopeful buyers, very funny indeed. The logical defense against such magical items is in fact easy. If the genius creators of these tools are so smart, let them become millionaires with the benefit of their inventions, its simple as ABC. If they have no interest in doing as much, you should have no interest in their creations either.
KEEP IT STUPIDLY SIMPLE. BOTH YOUR TRADE PLAN AND ANALYSIS SHOULD BE EASILY EXPLAINED AND UNDERSTOOD:
Forex trading is not rocket science. There is no expectation that you be a mathematical genius, or an economics professor to acquire wealth in currency trading. Instead, clarity of vision, and well-defined, carefully observed goals and practices offer the surest path to a respectable career in Forex. I know of a lot of traders that have been stagnant for over 5 years of their trading career due to over-indulgence. Most traders believe the winning system should have a complex setup and analysis. This is also a wrong assumption, in fact the best profitable trading systems are most times the simple ones. A good trading system should be easily explained and understood by all. Yes it is good to search for knowledge to improve one’s trading but there should be a limit to this. Too much of everything can be disastrous as the saying “analysis paralysis”. To achieve this, you must resist the temptation to over-explain, over-analyze, and most importantly, to rationalize your failures. A failure is a failure regardless of the conditions that led to it.
BE HUMBLE AND PATIENT. DO NOT TRY TO GET BACK AT THE MARKET:
The market is not human or physical, hence it does not care about who you are, your back ground, financial status, educational level, religion etc. Recognize your failures, and try to accommodate them if they can’t be eliminated completely. Above all, resist the illusion that you somehow possess the alchemist’s stone of trading. Such an attitude will surely be ruinous on your career eventually. Do not ever try to get back at the market when your analysis go wrong. Live today and fight tomorrow.
DO NOT GIVE UP ON YOURSELF
Finally, provided that you risk only what you can afford to lose, persistence, and a determination to succeed are great advantages. It is highly unlikely that you will become a trading genius overnight, so it is only sensible to await the ripening of your skills, and the development of your talents before giving up. As long as the learning process is painless, as long as the amounts that you risk do not derail your plans about the future and your life in general, the pains of the learning process will be harmless. “Winners never quit and quitters never win”.