Success is quite an attractive term and there is absolutely no one in this world who does not like to have it. Forex traders are not far behind when it comes to aspiring for success, but they often find that it eludes them no matter how hard they try. Today’s post is going to point out the 7 important points that can assure forex trading success for newbie traders.
Have the Right Perspective
Unless you look at forex trading as any other money making business it is impossible to even think of having any success in this field. The usual tendency is to consider forex trading as a type of gambling where you either lose all you money in a single trade or if Lady Luck is particularly happy with you, you become a millionaire overnight.
Sorry, but this gambling attitude is a guarantee to your downfall rather than your forex trading success, so be practical and start having the right perspective. Plan and build your forex trading business with the right risk reward ratio and you should be fine.
Plan Your Trades Effectively
You must have a good understanding of how positing sizing and risk to reward ratio works if you want to taste forex trading success. You must successfully calculate the right amount of lots to trade at each setup without jeopardizing or risking your money and at the same time reap consistent rewards too. Stop loss is an important strategy that can minimize losses and you must have a clear idea of your ideal stop loss position for each trade.
Normally you should target a reward double your risk amount and if you can manage a reward up to four times your risk, then it is even more desirable.
Learn to Discipline Yourself
When traders over-trade they invariably reduce the strike rate or accuracy of their trading strategy, this works to lower their monthly risk to reward and thus lower their profit or even cause them to incur losses.
We want to keep our winning percentage as high as possible each month and take full advantage of the power of risk to reward scenarios entering only the best trade setups.
Keep it Simple and Safe
Simplicity often works best and this is true even in the seemingly complex forex trading world. Most of the newbie forex traders cannot help themselves and keep digging on for more complex strategies because of the wrong notion that success is complicated.
No, do not fall in to this trap. You only need a simple but effective trading strategy to succeed. Once you find it you must master it. It is better to be a master of one simple strategy than to be a total jack of many complex strategies that you do not even understand properly.
Once you command mastery over an effective strategy that is simple enough to implement then you can safely vouch that you will be making profits in your forex trading.
Use an Effective Trading Plan
Every successful forex trader has a personal trading plan. He/ she will rigorously stick to it and keep repeating the strategies in this plan to consistently reap rewards. Do not even think of going live in forex trading without creating your own trading plan.
But here is an important advice to keep in mind. One man’s meat could be another’s poison, so do not rely on somebody else’s plan to bring your success. You have to find out a certain strategy/ strategies that will work for you before you can begin live forex trading.
Stay on Track
It is very easy to get sidelined and lose sight of your plan and then nosedive into failures. No matter how tough you think you are, the markets are volatile enough to throw even the most disciplined trader off-track. So do not be over confident and think that you will do fine without any extra help.
Write down some positive affirmations and possibly display it somewhere prominently so as to make sure that it definitely catches your attention every single day and most importantly-right before live forex trading.
This little trick can certainly aid you a lot and help in building the right emotional attitude before and during trading. You can choose what to write down in your stickers / display notes. Just make sure that they infuse a positive mindset and strengthen you emotionally and prepare you to face the rough markets.
Say No to Impulsive Trading
It happens to the best of forex traders. Often they cannot hold themselves back from diving right into a trade without any plans or reasons whatsoever. The best way to avoid this is to say a firm no to your impulses.
Never start a trade based on your impulse. Always spend a moment to ask yourself about the reason to join the trading session. Can you see a market opportunity developing or is there any favorable market signal?
If your answer is negative to both questions then you are jumping nose first into a pit and you must stop right away.