Many new traders dream of striking it rich in a matter of days. The possibility of getting incredible returns is always there, but Forex trading is not a get-rich-quick scheme. There is a lot of hard work, patience, and practice along the journey to becoming a successful forex trader.
This article discusses some of the most important aspects of successful trading. Do you have what it takes to be a successful trader?
Practice Makes Perfect
There is an age-old adage that it takes 10,000 hours to master a skill — and with Forex, experience is unquestionably the best guru. That is why we encourage all of our customers to open a Forex demo account when first starting out. You may start by practice trading with dummy money.
Practicing without putting your hard-earned money at risk will give you a good technical foundation on forex trading mechanics. This will also help you get used to our trading platform.
Once you have put in the practice, you’ll be able to make your plan.
The Strategy is About Choices
Too many Forex traders are entering trades without a logical goal in mind. The difference between success and failure often comes down to strategy and structure. It’s important to develop a trading strategy and a trading plan just for you.
One key component of any good trading plan is a trading journal. You record and review daily trades for better output and for future reference. A journal can help you track progress and study mistakes made when entering or exiting a trade. In the long run, these reports can act as the foundation for better executions.
Finally, a trader should also be aware of what they want to achieve through trading. Do you want financial independence or just a little income? Do you want to trade actively, or are you looking for a more passive strategy that will still beat any good savings account?
The answers to these questions will help you set a learning and trading strategy that suits you.
“The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading.”
— ‘Trader Vic’ Sperandeo
With a good trading plan, it will guide you on choosing which market to trade, when to take profits, when to cut your losses. A solid strategy takes the emotion out of the decision process at the heat of the moment, leading to more accurate decisions.
Learning is Earning
Taking the proper time to learn the ropes of trading and educating yourself is paramount. Traders use many methods to make money. Learn those various methods to improve your success in trading. There will always be new lessons to learn every day in the analysis of news, trends, and financial processes.
Any information you can take might be valuable. Seasoned traders will review the economic forecasts and for the issuing country of each of the currencies pairs. This news and forecast usually are released periodically in an economic calendar.
New traders should also make sure they know the basics of technical and fundamental analysis, candlestick charting, trading emotions, and price patterns before trading with real money. All this learning takes some time and effort, but it is a worthwhile investment that will pay huge dividends into the future.
The trading business is not an easy path to take; hence, we have compiled a list of FX beginner’s guides to help you start off your trading journey – sign up for Juno Markets’ beginner’s guide here.