Forex Trading: 5 Things Successful Traders Do
Are you new to forex trading and don‘t know how to start? Are you interested in forex, but have no idea what to do as a first step? I’ll try to give basic guidance on what you need to do in order to start trading forex as a pro.
Given the fact that you are reading this article is already a very important step forward. You are in a very good place to learn a lot of important stuff about forex and CFD online trading. Forex trading is very complex and even tho profitable trading is achievable, it is very hard. Let’s take a look at what to do in order to become a successful forex trader.
1.Get as much information as possible
There is no doubt that you first need to learn something about forex before you jump into trading, even on a virtual account. Indisputable sources where you can get a lot of useful information are books. There are several books about trading and a lot of them will give you really useful tips and advice. I would personally recommend reading the book: Long-Term Secrets to Short-Term, which was written by Larry Williams. Reading this book should be the absolute duty of everyone who’s serious about forex. Secondly, you can also gather information from different foreign Internet forums, but be careful not to overwhelm yourself with unnecessary information, because not every successful trader who knows how to really trade contributes there.
2. Start trading on a free demo account
In the moment you think you already learned enough to at least know what’s going on in the chart you can create a free demo account for forex. In this moment it doesn’t really matter that much which broker you will choose, however you should pick a broker with easy to use trading platform. Once you look at the charts, watch for movements, how the market behaves in the morning, how it behaves when announcing important messages, etc. However do not hurry to open your fist trade, because even though you are trading on demo account it will affect your psyche. If you open your first trade and it will be successful you will have unnecessarily high self-esteem and you might act rashly and we do not want you to do that. Conversely, if you get in a losing position you might ask yourself questions like why “did I even get into forex”, when I know I will do badly and etc. It might sound a little bit weird, but it’s the truth. Once you think you already know how the market reacts to a certain announcements/news/changes you can open your first position. Do not forget about appropriate money management and invest maximally 4% of your entire capital in one trade. Also do not forget to set up stop loss and take profit, in order to limit the risk of your trades.
3. Develop your own trading system
It is necessary to build your own trading system. If you have your own ideas you can test them on your demo account. At first, you might not have the best trading ideas in the world, but if they have got good potential try to slowly improve them. I strongly recommend keeping all of your trades in the trading diary. This way you will have a very good track of how did you do in the past in comparison to the presence. Therefore you will know if you are improving. Don’t be disappointed if you won’t do that good in the start, trading is a process which takes time. In order to earn same very good money from forex trading, you will have to be patient. It is probably the most important thing, which will highly affect your success. Mark my words: “Patience is the new success, you either have it, or you don’t”
4. Find “forex buddies”
Of course, it‘s very beneficial to be surrounded by people who are doing a similar thing. Try to ask around on forex forums, if anybody does not happen to live in your area and whether they want to meet and discuss forex trading. Any kind of confrontation with someone who is interested in trading might put you far ahead. When you trade you should be honest to yourself and to others. Do not be ashamed of your mistakes, learn from them. Take a lesson from this proverb: “A smart man learns from his mistakes. But a wise man learns from the mistakes of others.” That is also one of the reasons, why you should dedicate some of your time to visit forums and discussions where real traders talk.
5. Write down everything important
Do you want to improve in trading? Well, then you need to learn from your errors. And what is the better way to find them than thanks to a trading diary? Probably none. Whenever you make a trade write down important information, such as: entry price, exit price, position size, traded asset, signal (why you created this particular trade). You can also screenshot your trades so you could observe them later on when you have spare time. Traders tend to do these tasks on weekends since they can not trade. However, you can determine even some other time, that’s up to you. When you are making a trading diary, do not leave anything out. Even the smallest information could help you understand your mistakes.