Five Things You Must Do To Succeed at Forex Trading
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In today’s article I want to give you some practical tips that you can put to use immediately to improve your trading. I discuss five necessary components to successful Forex trading below, and I really hope you read this article carefully because there is some very valuable insight here. Enjoy…
1. Be realistic – One of the biggest problems that infect many beginning Forex traders is not being realistic about how much money they can make given what they have to trade with. The truth of the matter is that if you are effectively managing your risk on every single trade you make, you simply will not “get rich quick” if you don’t have a large amount of money
to fund your trading account with. Those traders who do manage to make a lot of money really fast from a small amount are definitely risking too much or over trading, and as a result of this their fast money will also leave them just as fast, if not faster. So, practicing effective money management in Forex is a necessary component to success in the market and it is what realistic traders do.
Another similar problem that is a result of traders not being realistic with themselves, is thinking they will be able to quit their job a month after they start trading and sit on the beach drinking margaritas all day. Now, your fantasy might not be exactly like that, but I am sure you have thought about how awesome it would be to trade fulltime and quit your job. It is not bad to have lofty goals, but you have to make sure that you are being realistic about how you will attain them.
You should measure your Forex trading success in increments; first you aim to be consistently profitable on a demo account, then you aim to follow your trading plan to the T and turn a profit each month, then you can aim to turn a profit each week, etc. The point is that you need to have smaller goals at first if you want to ultimately achieve your main goal of trading for a living. If you have a small trading account, you’ll need to have patience and just accept that you are going to have to slowly and consistently build your account over time. Work on building an impeccable track record, because even on a small account a consistently profitable track record is very impressive, and if you can earn money consistently over a period of months and prove it on paper, it won’t be difficult to find someone or some company to fund you.
2. Be consistent – You need to be consistent in all aspects of your trading, from the amount you risk to your daily trading routine. Winning at Forex is about being well-prepared and consistent. If you do this you will be well ahead of the pack. Most traders do not properly prepare, and if they do they soon fall off the wagon of consistency and discipline, this is one of the main reasons why most Forex traders lose money. If you can manage to stick to your Forex trading plan and execute it consistently, you will find that time works to your advantage. This is in contrast to traders who “run and gun” with their trading accounts; time tends to work against them because they reinforce negative trading habits over time which ultimately forces them out of the game.