To be a successful forex trader, you need to hone your skills through discipline and practice. You also need to perform self-analysis if you want to see what drives your forex trades and be willing to learn how to keep greed and fear out of the equation.
Whether you are an experienced forex trader or beginner, you need to keep in mind that knowledge, practice, and discipline are very crucial when it comes to staying ahead. Here are some of the tricks that will help you become a successful forex trader:
Define Your Goals and Trading Style
Before you join forex trading or set out on the trading journey, you should at least have some idea about where you want to go and how you intend to get there. It is important to have clear trading goals in mind and make sure to use the trading method that will help you achieve these goals.
Remember trading styles have different risk profiles, and they all require certain approaches and attitude to be successful in the trade. For instance, consider day trading if you can’t stomach sleeping while a position in the market is open.
Alternatively, you could also opt to be a position trader if you have funds that you are sure would benefit from a trade’s appreciation over a period of months. Before undertaking a trade, always make sure that it suits your personality and style of trading. A personality mismatch in trading always leads to losses and stress.
Identify a Consistent Methodology
As a trader, you should always have an idea of how to make the right decision before you enter or exist a trade. Always gather all the information you need to make a suitable decision before entering any market.
Some traders prefer to look at the fundamentals of the economy and a chart before deciding on the best time to execute a trade. Others will use technical analysis. Whichever methodology you settle for, ensure consistency and make the methodology adaptive to your trading routine. Success in forex trade requires you to keep up with the market’s changing dynamics.
Go for Reputable Brokers and Trading Platforms
Trading with a reputable broker is very crucial. We recommend researching the differences between brokers before choosing to trade with them. Learn the policies of the brokers and how go about making a forex market.
For instance, spot markets or over-the-counter markets are different from exchange-driven markets. Hence, it is crucial to make sure that the broker’s trading platform suits the analysis you seek. If you trade off Fibonacci numbers ensure that the platform draws Fibonacci lines.
Either you, you will encounter problems when using a good broker but with a poor platform and vice versa. Work towards getting the best of both.
Know Your Entry and Exit Points
There is a lot of conflicting info when looking at chats occurring in different timeframes which can be very confusing for traders. what could appear ass a buying opportunity on your weekly chart could show up as a sell signal on another intraday chart.
Hence, when you take basic trading direction from your weekly chart while using a daily chart in your time entry, it helps to synchronize the two. So when your weekly chart gives you a buy signal, wait till the daily charts confirms the buy signal. We recommend syncing your time.
Pay Attention to The Positive Feedback Loops
A well-executed trade that is in accordance with your plan will create a positive feedback. So whenever you plan and execute your trade well, a positive feedback pattern will be formed. This will help breed success which will in turn breed confidence if the trade is profitable. A positive feedback loop will also be created when you also take small losses that are in accordance with your planned trades.
A structured approach to forex trading helps you become a better and more refined forex trader. Remember trade is a form of art, the only way you can become increasingly proficient is when you formulate a consistent and disciplined practice.
We also recommend a printed record of your trades and use it as a learning tool. This will help you keep you keep track of when you made trades while anxious, with greed, or unadvised.