No one is born as a successful Forex trader; they have to work towards it. Among the many that get into Forex trading, only a few succeed. Nevertheless, here are a few steps following which you can achieve complete success in forex trading.
Step #1: Identifying your mistakes
The best way to learn anything is by making mistakes and identifying them. Forex trading is no different. When it comes to forex trading there are many places where you can err. Here are a few things you need to keep in mind in order to do avoid such mistakes:
- Never put in your entire life savings to open your trading account. Trade only with that money that you can actually afford to lose.
- Determine your risk threshold for every trade and make sure you stick to it. This way even if you lose a few trades, you may not lose much of money.
- Many online trading platforms offer MT4 demo accounts for new traders to practice and trade. If you have signed up for one of these, make sure you don’t spend too much of time on these demo accounts. Sooner or later you will have to switch to a real account. Start small. You can go on increasing once you get a feel of the real market.
Maintain a trading journal to keep track of all your transactions in forex trading. This will help you spot your weaknesses easily.
Step #2: Devising a plan to correct your mistakes
Identifying your mistakes is not the only way to achieve success in forex trading. You also need to know how to fix those mistakes, in time. Here are a few things you can do:
- Have your trading plan in writing. This will help you understand how to approach trading giving you all details about entering and exiting the market, taking positions and handling losing trades.
- Make entries of every trade in your trading journal, including important information such as your entry and exit points, your position size, your entry trigger, as well as your profit or loss. Check your journal entries regularly to improve upon your trading skills.
- Focus on following the rules. Never make your decisions by giving in to your emotions.
- Make use of stop-losses and base them on the market conditions
Step #3: Sticking to your Trading plan
Many forex traders have the habit of jumping from one strategy to the other. However, this is not a wise thing to do. What you need to do is pick one best trading strategy as per your requirements and trading style, and stick to it.
- Have confidence in your strategy and manage your trades well
- Never keep waiting for the right time. You will miss out on many opportunities for learning as well as trading
- Stick to a daily trading routine while includes going though important market news, staying updated on the key market developments, watching out for unexpected reports if any and keeping track of data that is scheduled to be released for the day.
It takes to time to start something new and get used to it. But once you do you can be confident that you will always be ahead of the game. There is no shortcut when it comes to achieving success in forex trading.