Forex Trading Tips - 20 things you need to know to be a successful trader
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The system discussed here is not the holy grail of forex trading. There is no such thing. How to become a profitable forex trader has far more to do with mindset than with a specific trading strategy. In fact, no forex trading strategy can be profitable if a trader has the wrong mindset. Is it hard to follow this system? That is to say, is it hard to quit smoking? Those of you who have smoked before - or still are smoking - will probably say that it is indeed very hard.
But if that was your answer, ask yourself what is so hard about not lighting up another cigaret? This really is the kind of principle that should play a role in every major endeavor you undertake. When you set out on a new path, it helps to set clear, definable goals to how to become good forex trader you. If you set no goals at all, or vague how to become good forex trader, you don't have anything to benchmark against.
Clear goals help you stay the course on the road to success. This second principle goes hand in hand with the first. Many beginning traders do set goals, only they're not very realistic. And since failing to reach a goal is very demotivating, there's really no reason to set how to become good forex trader that are ridiculously hard to achieve. To make sure you set realistic trading goals, you should answer how to become good forex trader following questions for yourself: Your financial goal is partially based on the amount you have available for trading.
The more time you can spend on expanding your knowledge, the more trading strategies you can explore and master. Learning about different trading strategies and techniques will increase the chance of finding a strategy that really suits you. Answering this question will help you cross out a number of trading strategies. For instance, How to become good forex trader you have a full time job which allows for only about an hour of trading each day, you don't have to bother with intraday trading.
Every successful trader will tell you that the most challenging aspect of trading is keeping your emotions out. It's hard to stay in trades that have a lot of unrealized profit, just as it is hard to close a trade that is moving against you. It's hard to keep believing in a trading system that hasn't delivered for some time, and very easy to start doubting everything you do.
You have to do everything you can to limit the temptation of making emotional decisions, and of the most important steps you can take to that end is to find out what kind of trader you are. What kind of trading personality do you have? Are you impulsive, relatively good at taking a loss? Are you patient, disciplined, do you believe the natural direction of a given stock is up? In my book ' Forex for Ambitious Beginners ' I go deeper into the process of self-assessment for traders and also list how to become good forex trader number of questions that will help you gauge your own trading personality.
If you already have the book, I strongly suggest you spend time on the chapter about self-assessment. You should build your own trading system, rather than plucking one from the internet. I know it's very tempting to simply copy the trading system of some supposedly successful trader, and it might very well be a very profitable strategy but the fact that it works for them, doesn't how to become good forex trader it will work for you. The best thing to do is to take note of those strategies and let other traders tell you what works for them, to see which parts really resonate with you.
Borrow bits and pieces from other people's trading strategies, but only to mold them into a strategy that is customized to your trading personality, financial circumstances and time schedule. If you are a hobby trader and just want to stay in the market without losing too much, you don't have how to become good forex trader spend years building your system, but if you are committed, if you are serious, if you want to achieve financial freedom, than it might take you years before you have build and fine-tuned a successful trading system of your own.
Do you think that's a little long? How about if you were starting a business and someone told you it might take you three to four years before it'd become a successful business. Would you find that very odd? Because if you do, you better not start a business. Trading on the financial markets for a living, to become financially independent, is a business too.
It will very likely take you a couple of years before you master trading profitably consistently. So, find a trading strategy that fits your trading personality. Formulate a set-up, an exit strategy and determine the right money management, and you're on your way. Interesting thing about the word 'impassionate' is that it has two opposite meanings. On the one hand it means being passionate about something, and on the other hand it means to be dispassionate.
As a trader you need both those meanings to become successful. Be passionate about trading Look, if you're only in it for the money and don't care at all for charts, price development, financial news, or how different tradable instruments correlate with each other, in other words if you don't like the gameyou probably won't last very long as a trader.
In the beginning you might struggle, and there will definitely how to become good forex trader difficult periods, so if you don't have any passion for the activity itself, for trading as such, it will be very hard to get through those difficult periods. Be dispassionate when trading You've carefully build a trading system that fits your trading personality, that has a solid set-up, exit strategy how to become good forex trader money management.
One of the main reasons you have a trading system is to keep you from making emotional decisions. So, now that how to become good forex trader in the market it's time to let your system do its work. Therefore, when the position is open you are dispassionate.
Your system is running the trade and you don't care either way whether or not the trade goes one way or the other.
That doesn't mean you can never change your system, it means you have to trust your system as long as you're in a trade. You have to trust your trading system. You have to trust your set-up, you have to trust your money management and you have to trust your exit strategy. If you don't, you're likely to change your system before it has had a chance to prove itself.
Let's look at an example. A winning trade will make you 10 pips, dollars, gold bars, doesn't matter a losing trade will cost you 7. So your Expected Value is 1,5 per trade. That doesn't mean you will make profit every time you execute trades. A random sample how to become good forex trader trades could easily show 80 winners and 20 losers, or the other way around. But in the long run you will turn that average net profit of 1,5 per trade. That is, if you stick to the system. If you don't trust your system, you'll switch too soon to another system and you'll never find out whether or not that system or any other trading system works or not.
Of course you can backtest your system, and doing so will help you fine-tune it before going live, but many traders still have difficulty following a system even after it has proven itself in a solid backtest. As soon as they start trading with real money, doubt creeps in after only a couple of losing trades, and then the tweaking, changing, distrusting begins.
Before long, many traders have switched to a new system entirely, after which the process repeats itself. Of course you can tweak your system - and you should - but do it how to become good forex trader, and mindfully. You've spend time building the system, tracking the system, evaluating your system. Only when you find a leak over how to become good forex trader longer period of time should you adjust the system.
If you don't trust the system while you're in a trade, you'll become impatient. Impatience makes you exit too soon - afraid how to become good forex trader profits will dissipate - or too late, because you don't want to take a loss. Goals - Set clear, definable goals. Realism - Make sure the goals you set are realistic.
Analyze - Find out what kind of trading personality you have. Build - Build your own trading system, one that suits your trading personality. Impassionate - Be passionate about trading, impassionate when trading.
Trust - Trust your system when you're in a trade, don't be impatient. Following these principles won't guarantee success as a trader, nothing can, but you'll have a lot more chance to be successful if you do.
Want to learn more about successful forex trading? Check out Forex for Ambitious Beginners. Available at Amazon and other stores. The 6 simple secrets of successful forex trading. Get the Book Available at Amazon and other stores.