14 Tips to a profitable Forex Trading
It is always difficult to find your feet in forex trading as a newbie. For you to succeed and remain in the business, you need at least two people to mentor and put you through. This does not apply to this type of business alone but to other businesses you are new to or know little or nothing about.
However, for you to be successful in forex trading, you must have some rules that will be a guide for you in your day to day activities. These rules are:
- Know your psychological state of mind which is very important and paramount to this business. Also, put your mind together and enter the market when you are supposed to in other not to lose money. Have confidence in your self and never you endanger your emotions in trading and be logical. "Your Psychological state of mind is more than those Dollars you are chasing at the market".
- Discipline yourself to succeed. About 95% of traders are indiscipline when it comes to trading. That is why most of them failed as they claim to know more than or better than the system. Always follow the rules and instructions of the market and be one of the 5% disciplined and successful traders.
- Recognize what your needs are and trade a method that fits or suit your personality and will keep in business for a long period of time.
- Trading is all about recognizing long and short term opportunities. Therefore, do not favor sides when trading but utilize every opportunity that comes your way as a currency trader. You don't care if the currency market is going up or down. Once there is an opportunity to make money, make it immediately.
- Do not be in a hurry to take profits before the profit objectives are reached. This will destroy the whole risk/reward ratio and leads to failure and fruitless efforts at the end. Do not be tempted to grab the profit in a winning position before the profit objective is reached and be patient with your profit targets.
- Know the personality of the currency you are trading in terms of volatility, spread, average daily range, liquidity and specific patterns. Apply trading strategies that is applicable to the characteristics of the currency pair.
- Do not be afraid to join a trend as it is difficult to identify a price that is "too low" or "too high". Hence, knowing the market trend of the day and the potential for the pair you have chosen to trade becomes very essential to your trading success.
- Do not be guess to pick absolute tops and bottoms in a trade. Rather, develop or buy tools that help in determining the facts like "Trend lines". You may succeed once or twice by guessing to pick tops and bottoms, but will eventually fail and suffer in the long run.
- A stop loss is a red light telling you to get out of the market and not to add more money to the trade and never in any way a suggestion. Therefore, don't ever add to a losing position but always watch and obey the red light.
- Reason logically before you trade in other not to put yourself under unnecessary tension and pressure. In this case, think, analyze and create before you trade. Also, follow what you thought, analyzed and created before the trade. Ideally, plan the trade before hand and do not be caught unaware.
- Remember the type of trader you are and follow the rules as it applies to that specific method of trading.
- Do not believe that the more indicators and patterns you use the more profitable you will be. Make your trading strategies simple and original.
- In Bear markets, sell the markets that shows most weakness. This is a simple truth which many traders do not follow. They regret it at the end as they fail woefully. Do not try to outsmart the market but follow the market instructions strictly at all time.
- Note that trading runs in cycles. In other words, there are good days and bad days, good weeks and bad weeks as well as good months and bad months. However, do not allow one bad day, week or month as the case may be discourage and get you out of business. Do not use short term to measure result in order not to give up.
Nevertheless, being a successful forex trader takes more than just having money, time and desire. The more you realize this the better your chances of making it big in this wonderful and profitable business. Always remember that 95% of the traders don't follow the above rules and strategies and they failed. It is strongly recommended that you be among the unique and successful traders that use a good trading method and system.
However, for you to be successful in forex trading, you must have some rules that will be a guide for you in your day to day activities. These rules are:
- Know your psychological state of mind which is very important and paramount to this business. Also, put your mind together and enter the market when you are supposed to in other not to lose money. Have confidence in your self and never you endanger your emotions in trading and be logical. "Your Psychological state of mind is more than those Dollars you are chasing at the market".
- Discipline yourself to succeed. About 95% of traders are indiscipline when it comes to trading. That is why most of them failed as they claim to know more than or better than the system. Always follow the rules and instructions of the market and be one of the 5% disciplined and successful traders.
- Recognize what your needs are and trade a method that fits or suit your personality and will keep in business for a long period of time.
- Trading is all about recognizing long and short term opportunities. Therefore, do not favor sides when trading but utilize every opportunity that comes your way as a currency trader. You don't care if the currency market is going up or down. Once there is an opportunity to make money, make it immediately.
- Do not be in a hurry to take profits before the profit objectives are reached. This will destroy the whole risk/reward ratio and leads to failure and fruitless efforts at the end. Do not be tempted to grab the profit in a winning position before the profit objective is reached and be patient with your profit targets.
- Know the personality of the currency you are trading in terms of volatility, spread, average daily range, liquidity and specific patterns. Apply trading strategies that is applicable to the characteristics of the currency pair.
- Do not be afraid to join a trend as it is difficult to identify a price that is "too low" or "too high". Hence, knowing the market trend of the day and the potential for the pair you have chosen to trade becomes very essential to your trading success.
- Do not be guess to pick absolute tops and bottoms in a trade. Rather, develop or buy tools that help in determining the facts like "Trend lines". You may succeed once or twice by guessing to pick tops and bottoms, but will eventually fail and suffer in the long run.
- A stop loss is a red light telling you to get out of the market and not to add more money to the trade and never in any way a suggestion. Therefore, don't ever add to a losing position but always watch and obey the red light.
- Reason logically before you trade in other not to put yourself under unnecessary tension and pressure. In this case, think, analyze and create before you trade. Also, follow what you thought, analyzed and created before the trade. Ideally, plan the trade before hand and do not be caught unaware.
- Remember the type of trader you are and follow the rules as it applies to that specific method of trading.
- Do not believe that the more indicators and patterns you use the more profitable you will be. Make your trading strategies simple and original.
- In Bear markets, sell the markets that shows most weakness. This is a simple truth which many traders do not follow. They regret it at the end as they fail woefully. Do not try to outsmart the market but follow the market instructions strictly at all time.
- Note that trading runs in cycles. In other words, there are good days and bad days, good weeks and bad weeks as well as good months and bad months. However, do not allow one bad day, week or month as the case may be discourage and get you out of business. Do not use short term to measure result in order not to give up.
Nevertheless, being a successful forex trader takes more than just having money, time and desire. The more you realize this the better your chances of making it big in this wonderful and profitable business. Always remember that 95% of the traders don't follow the above rules and strategies and they failed. It is strongly recommended that you be among the unique and successful traders that use a good trading method and system.
