How to become a successful forex trader? Are you ready to take the plunge into forex trading and see it as a legitimate career for you?
In order to become a successful forex trader, create a trading plan, use risk management and develop a daily routine that is right for your trading career. Once you have the foundation, you can begin to develop as a trader and generate a steady income.
In this article, we have given you the tools and how to implement them in order to succeed as a forex trader.
It is important that you learn the key skills you need to succeed in forex trading, which means creating a winning trading strategy.
Here are some essential things you must keep in mind if you want to be a successful trader in forex:
If you follow these essential points, you will have everything you need to become a successful forex trader. You must remember that you will experience a lot of stress and losses in forex trading, but if you are passionate and put in the effort, you can overcome the bad experiences and achieve success.
Not everyone manages to find success in forex trading. However, there is nothing stopping you from developing a successful forex trading career.
There are several important steps that every trader must adapt, let’s break them one by one:
1. Do your homework before you begin trading
Begin your preparation before the market opens, learn what is going on in other markets around the world.
2. Skill Assessment
Self-awareness of your trading skills. Are you ready to trade the market? Do you feel confident in understanding the market?
The experienced forex portfolio managers are always prepared. you must have a clear set plan, so you’ll not throw your money away.
3. Set Risk Level
Know and set a risk level that you are convenient to avoid expensive errors.
4. Be mentally prepared
Know when you are not in a position to trade mentally.
If you’re nervous or you didn’t sleep well, if something bothers you, take a step back.
A good trader has high self-discipline and knows when he or she is not supposes to trade.
5. Trading Preparations
Write down before you begin to trade important points such as minor and major support, resistance levels, alerts for entry and exit signals.
6. Set trading plan goals
Set weekly, monthly and yearly profit targets for yourself and, of course, Determine how much you can lose weekly.
Maintain self-discipline for losses, if you are not disciplined and not using stop loss, you will find yourself losing all your money quickly.
7. Keep your trading Records
Be organized, and keep records of all your trades, winning and losing. It provides a reference point for future trades. you’ll know what you did right and what not.
You should write down essential details such as:
Record: write down why you made the trade, and what lessons you learned from it.
It’s important to review your trading records to analyze your profit or losses, what was the average time per trade, the drawdowns, and other important factors that you want to follow.
8. Set Entry Rules & Exit Rules
You need to be very careful about what conditions you enter into the trade, where you place the Stoploss and under what conditions you exit.
If you do not do it, not only that you don’t have a trading plan, which is a recipe for losses, you will have no ability to check whether the conditions you place to trade are successful or not, and if not, then how to improve them.
9. After every trading day:
It is important to understand that we have no control over the direction of the market, so we need to control our emotions and act in a disciplined way, where to place Stopploss and where to take profit.
Increase Your Position Slowly
Traders should start from a small position and only increase the size of there position, as the market moves in the right direction.
You can always increase your position, but you must first make sure that you are in a certain amount of profit before you increase the risk. Secondly, you should change your stop loss so that you can exit the position at least evenly.
Some traders prefer to use the Set And Forget method, which has its advantages and disadvantages, but if you prefer to manage your position, you should work with these principles.
We need to modify our trade with new information that comes up.
Important events can occur at any time by surprise. political events, central bank interventions, natural disasters, etc.
Unexpected events will always surprise you, we need to have a plan on how to deal with those situations.
If you are not sure how, we have a great article about how to protect your order.
Learn From Your Trading History
Write unexpected scenarios that happened to you during a trade or all kinds of trades that you tested. Write down what the outcome was, and how you should change the course of action if any. So you are actually creating a very powerful tool to help you in the future when you are in a similar situation.
Beware Of Your Ego
After you’ve succeeded to manage a few trades, don’t think you already know everything.
Always follow the market, and continue to study and test yourself, don’t be afraid to make changes, if needed, in your work plan.
Most importantly do not let the loss grow, just because you are sure the market will change for your benefit, work wisely free of emotions.
Accept Your Losses
Learn to accept your losses, understand that they are part of the “game”.
Try to learn from your mistakes, and understand how you could act differently next time according to your plan.
The ability to learn from losses improves you as a trader and will reward you in the future.
Keep leverage at minimum
Using leverage in forex is very tempting and very easy to get. You don’t need to have a big bank account, and the thought that you could make a very big profit in a very short time is tempting investors.
Be careful about that! In most cases, the trader will lose a very large loss that will be difficult to recover.
Try to use minimal leverage If any, today there are ways to make a profit, nice amounts, even without the risk involved in leverage, if you don’t know how to do it, we wrote an article called The Lower Hanging Fruits that explains how to make a profit with low risk.
Use software programs
Today in the Internet age you can find quite a few tools and trading software to help you with your Risk Management.
Use them, they will make your life easier and make you a better trader. If you find it hard to find the right tools on the Internet you can check our recommended free money management tools in this useful guide.
Every successful trader has a daily routine, they know what time they needs to get up, and how to prepare themselves for the day of trading. To be a trader is a job, you can’t wake up whenever you want and “go with the flow”, you must be prepared!
We have an article that explains more in-depth, how to create a daily routine.
But, here are some key points:
The night before, check your trades and your conclusions for the next day, so that you know what your goals are, and what you need to do or change in order to achieve them.
Check if you are updated, check the forums and news sites you are following, check if anything significant happened during the night, check again what significant events are supposed to happen during the day that can affect the markets.
Open the graphs, check for opportunities, which way you should trade them, and what scenarios you should be prepared for.
Professional traders usually like to sit at the beginning of the trading hour and just watch the graphs, try to understand the behavior of the market at the first hour, and how it reacts to events that happaned since they closed yesterday.
After half an hour or an hour, they start trading according to their trading plan, writing the trades and following them.
At noon you should take a break, rest a little, relax, everyone is out for lunch, so you should too. When everyone returns, expect an increase in the market volume and a reasonable possibility of volatility, you should already be prepared for this with an orderly trading plan.
After the trading day ends go over the actions you made, where you succeeded and where you didn’t, and in what ways you can improve. Prepare for the next trading day, mark where you have opportunities, how to act and how to respond to unexpected scenarios.
Take the time to practice, work with a demo system, test your ability and new ideas that you have, if the ideas succeed think how to start implementing them.
Go to the forums, the blogs or the YouTube channels of traders you follow, see how they summarize the days and get ideas, be up to date on the news, and prepare if something should happen during the night.
After we have gone over the important points that each trader must build in order to have a strong foundation, there are a few other points that every trader should know:
The statistics back that up, because a trading job is difficult, and a high percentage of traders are losing money in the forex market. To become the best forex trader, you will need to learn how to trade properly on forex, which means studying the different market dynamics that influence your trades. That is hard work, especially if you have no prior experience as a trader. However, you don’t need to worry, because we are going to provide you with the basics of forex trading, along with simple points that will help you become successful in forex trading.
The fact that you’re reading this article already means that you are concerned about your forex trading career and are actively looking to become better at forex trading. A lot of people tend to think of forex trading as an easy way to make money, but you hardly find any successful forex traders. The reason that is the case is that like any other profession or industry, you need to be at the top to make serious money or get rich through forex trading.
Forex trading is a profession that requires skill, therefore, your performance and delivery must be top-notch if you want to be successful. You can compare it to sports, because in professional sport, only the best and finest, manage to achieve success, while the rest languish in mediocrity. What I mean by that is you must struggle and learn consistently to make steady money from forex trading and find success. Fortunately, for you, I have in-depth knowledge of what it takes to become successful in forex trading, and will share some more crucial keys that will help unlock success for all forex traders:
A lot of traders never seem to find success in forex trading, because they tend to follow trading systems and signals. This means that they never understand the intricacies of the market and don’t know when they should trade or hold. Therefore, they end up relying on the expertise of someone else, and never manage to improve their own trading skills.
If you want to achieve success in forex trading, you must ditch trading systems and study the market to understand how it works. This will teach you how and when you must use your trading skills to find success in the market.
One of the biggest mistakes newbie traders make is trying to predict what the market does, which invariably sets them up for failure when they get it wrong. Forex trading isn’t about taking chances or getting ahead of yourself, because the market is volatile. Instead of trying to be clever, you should be realistic, and show patience, instead of trying to make profits quickly.
The biggest problem with predicting the market is that you are going to get it wrong more often than you get it right. If you trade with that strategy, you will lose more than you win, and that is no way to forge a successful forex trading career. You need to let the market dictate the direction, and then trade based on the changes.
The key to success isn’t in anticipating the market but reacting to the different changes to find success.
You need a thicker skin and the ability to handle losses if you want to become the best forex trader since losses are an inevitable part of forex trading.
All traders lose money, but that is how the market works, and irrespective of what trading plan you have, you can’t avoid it.
Traders, who don’t think rationally about their losses, set themselves up for failure since that will result in higher losses. Revenge trading and denial black spot trading are the worst outcomes when you don’t trade with sense and react to emotions.
The best way to find success is by treating your losses as a business expense or a learning curve that will allow you to focus on making the right moves.
If you don’t have any passion about forex trading and have no interest in landing a trading job, then there is no point in trying to make a career in this field. You will not understand the different dynamics in place and will get bored with all the numbers and different terms. When you’re a forex trader, you must be interested and passionate, because you will not find success in any other way.
Invest in serious learning This is one of the key steps in finding success in forex trading. You need to find a mentor that will teach you everything about the market and different trading styles.
It is important that you are willing to learn from a professional so that you develop your own personality and trading style.
You can certainly succeed as a Forex trader, once you have an organized plan and disciplined, all you have to do is make improvements over time.
Save this post link, work according to its guidelines and you are in the right direction.
Remember to develop a professional career in Forex, you must treat it accordingly.
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