Facing realities while trading Forex successfully is a must for anyone who wants to enjoy continuous success trading Forex. When our nature and mindset blend with what it takes to be a successful trader, challenges are seen as a normality. Only then, normality is seen as an advantage.
In fact, only few people are fortunate enough to succeed as soon as they begin their trading career. Many people have to grapple with the market before they start to enjoy success. During the time, they learned hard lessons. You only begin to trade like a pro when you adapt your trading approaches to match those of a pro. If you ignore this, you simply won’t be able to trade professionally.
Here are some suggestions which came as a result of studies about realities when trading Forex. They’ll definitely help you.
• You can’t guarantee what the market will do next. You will have to trade what you currently see in the charts. Success isn’t about accurate prediction of price future movements; it’s all about the risk you take when you trade and your money management. A trader who trades with 95% accuracy without proper money management can end up ruining his/her portfolio. A good risk manager can end up making money with only 40% of accurate trades, or less.
• If a market is trend-less or in a consolidation phase, and there is no clear direction on the charts, don’t trade it unless you’re a scalper.
• Experienced traders agree that it pays out to follow the trend. Don’t take positions against all experienced traders.
• When price charts are against a support level, you can increase your odds of success when you only execute ‘buy’ signals and ignore ‘sell’ signals. Reverse the logic for the scenario where prices are against a level of resistance.
• Your trading will benefit greatly when you adapts market experts‘ strategies and principals and follow their advice.
• Your trading method must fit your personality. If you’re always busy with a day job outside the trading world, an intra-day strategy can’t pay you. If you’re naturally impatient, a long term position trading can’t pay you. Your performance will improve only when you use a strategy that suits your psychology.
• When you are trading in Forex market, the recent positive results shouldn’t make you overconfident; neither should you become too afraid to trade the next setup when your trading has been negative. Don’t make a mistake if you lose and deviate from your plan, even if that results in profits. Mistakes are made only when you don’t have a plan or don’t follow a good strategy.
• Effective risk management and optimal position sizing techniques will ensure your continuous victory as a trader. This is your insurance in the market. Risk the same amount of money on each trade, keep the risk small so that you’ll remain indifferent to the outcome of an individual trade. A proper risk management strategy, regardless the number of losing trades, will end up serving your best interest.
• Open your trading orders according to the winning strategy that gave you an edge, not according to your irrational emotions.
When trading Forex, we don’t know what the market might do next, but we can be victorious irrespective of what the market’s behavior. We can’t know in which direction the next significant movement will be, but one can make good profits from a favorable movement or survive an adverse one. The experience resulting from this can even be satisfactory.
Always bear this truth in mind. Trading Forex offers you financial freedom; numerous traders have already attained it. Ultimately, if you follow the suggestions above and couple it with proper technical and fundamental analysis, you will become an affluent trader.