The Forex Market is the largest of its kind, with over $5 trillion being exchanged in it daily. As a result, there are potentially plentiful opportunities for you to make a kill. However, the real situation is not like that. In actual fact, most Forex traders fail to make a dime in it.
Why is that so? Forex Trading Signals is as psychological as it is technical. Hence, here are both psychological and technical tips to help you become a success in it.
Why is that so? Forex Trading Signals is as psychological as it is technical. Hence, here are both psychological and technical tips to help you become a success in it.
Define your Goals.
You cannot hit a target that you cannot see” is a timeless saying. And it has not come to maintain its age-long usefulness for nothing. It has because it is true. It is important to ask: why do you want to start trading? And why Forex, and not stocks or any other asset class?Do you want to trade Forex just for an extra income? Or do you want to fully transition into trading it full-time? You need to be able to answer those questions so that you can define your goals. It is after you have done so that you will be able to devise a path to achieving them.
Determine your trading style
Anything that you do anyhow is bound to fail. This is why you have to decide on a systematic way to doing your Forex trading once you have defined why you want to be doing it. In determining your style, you have to consider a lot of factors.
Some are psychological. For example, how much do you tolerate risk? Some are technical. For example, what is your current level of trading expertise, and how far are you willing to go? If you have a low-risk profile, for instance, you will most likely do well as a swing or position trading.
What are your expectations?
Then, what are your expectations? In all honesty, an undeniable reason many Forex traders fail is because of their ridiculous expectations. They are moved by what they see about Forex trading on the internet. So, they believe it is all rose and rain.However, it is not like that. Forex Trading requires sound expectation management. So, you should not be unnecessarily swayed. An annual return of 25-35% on your Forex investment is not only realistic but also healthy. A higher one can be severely damaging in situations when the market does not go as you think.
Choose a reputable broker.
By now, you should have known that you cannot participate in the Forex market all by yourself. You need a broker to serve as the intermediary between you and the market. A broker will provide you with a platform via which you will be analysing the market and taking your trades.Such a platform is arguably the most important tool you will need in your trading career. And that is why you have to choose only a broker that gives you the best of it. Also, the broker has to be licensed by a well-known regulatory agency.
Develop a trading strategy and stick to it.
Do not approach the market without a strategy. The market is neither haphazard nor perfectly predictable. A strategy will help to give you more clarity, thereby ensuring that you take better-quality trades. A trader without a strategy is bound to fail!It is important you stick to the strategy you develop, too. “Strategy Somersaulting”, a phenomenon whereby a Forex trader moves from one strategy to another, is well-known. Develop a strategy, stick to it, and only evaluate its success rate from time to time.
Always do your analysis.
As surprisingly as it may sound, trading is not the all-important activity here. Analysis is. And that is why you should aim to become a competent Forex analyst before you become a Forex trader. In fact, if you trade without analysing, you will end up analysing after trading.And once again, it is why a strategy is important. Your strategy should be your first analytical tool. It should hold the principles that guide your entry and exit in the market. When conditions, as contained in your strategy, are not met, stay away.
Keep your wins large and your losses small.
Think about it. You will not last long as a Forex trader if your losses outstrip your wins. That is why you should ascertain your strategy’s winning rate. How many of the trades you take with it succeed? How many fail? It is important you note that a strategy with a 60-70% success rate is ideal.A tactic by which you can achieve that is to always cut your losses short. Do not hold tightly onto losing trades. Cut and move. Also, do not cut your winning trades. Be patient and let them run. Impatiently cutting down wins and clueless letting losses run has been identified as a fundamental reason why Forex traders fail.
Finally, now is time to put those tips into practice. So, start trading. And to boost your chances, subscribe to 1000pip Builder's signal service here.
