So, you want to be a successful trader?
Well, like in everything else, trading has some of its hacks and strategies that were successfully used by most traders. Although these strategies may not be 100% what you should do, these tips may be useful to you in the future.
Different traders will recommend different methods depending on their trading styles. However, all these methods strive to achieve one goal: earning more money.
Therefore, after doing much research, I came up with a list of five secrets that are bound to give you success in forex trading. Take a look.
1. Solid trading plans
With hundreds of different trading plans in the market, it can be easy to be carried away with one that doesn’t suit you.
Some traders can only work during the day, others at night, some trade stocks, other options, and other currencies. Get to know what you want to trade and when you are comfortable trading the stick with it. If you choose the Hong Kong market, or the European market, then so be it.
A solid plan is based on an understanding of the dynamics of the market and thus is flexible to adapt to changes in the different markets. It also has some time set for learning new trading concepts and grasping skills based on your experience.
With a good plan, you’ll know when to enter or leave the market, how much to risk, and when to stop.
2. Financial management
Don’t put all your eggs in one basket. This is the best advice you’ll get from experienced traders. There are days you’ll lose and others you’ll get profit.
Therefore, you need to be cautious with how much you’re willing to risk. Set your profit targets and understand the profit/loss ratio before risking your money.
A good policy is to never invest more than 2% of your capital. While it may yield small profits, you’ll be safeguarding yourself from significant losses.
Regardless of how successful you are, always stick to small risks.
3. Use Stop Loss!
I cannot stress this point enough. When you are new to Forex trading, you are bound to make multiple mistakes. Some of these mistakes may cost you all your capital.
Stop-loss automatically stops your order once it reaches a specified price level. This helps avoid incurring some heavy losses. Using it gives you the freedom to handle several trades at once without worrying about the losses.
It, therefore, grants you more control over your account and trades.
4. Know your risk limit
It’s very easy to be tempted to trade in more than your set goals. While the payout may seem good, losing most of your trading capital will ruin your business.
You need to set realistic goals and stick with them. If you are to trade with 5%, use only that amount and monitor how the trade fares.
By doing this, you’ll avoid overtrading. When wondering how to set a limit, ensure that the amount you risk is less than what’s left in the account. Different traders recommend different risk limits.
I recommend keeping the risk slightly under 6% of the trading account balance.
5. Personal Attributes
Yes, your attributes play a crucial role in determining how successful a trader you’ll be. This is because trading is a task that requires much patience.
You need to wait patiently for the trade prices to rise to the levels you want it to be. If you’re impatient, you’ll be less likely to gain big profits.
You also need to be confident and self-controlled. Confidence comes in when setting out your trading plan. You should be confident that the plan will work and favor your trade.
Self-control will also help you when risking your capital.
Success in forex trading takes time, perseverance, commitment, and dedication. It doesn’t happen overnight and so, you should be willing to put in the work.
The tips above are but a few of the secrets that have worked for some of the most successful traders. You should thus take time and find the tips that suit your trading habits.
By practicing incorporating these tips in your trading, you will be on the right path to Forex trading success.
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