Okay, you have heard from some people that Forex trading can make you rich overnight. However, by contrast, up to 90% of trader lose their money while Forex trading. Well, two simple factors contributes to those disparities; your positions versus other's positions. If correct position is all that it takes, how hard can it be to do Forex trading successfully?
Forex Trading in a Nutshell
Depending on whom you ask, Forex trading successfully can either takes up one's lifetime to master or one big push of luck at an extremely opportune occasion.
You'll come across a lot of trading gurus with different approaches to foreign exchange market only to find out that some losses are inevitable and some huge profit can only be taken from piggybacking a strong market movement during high impact news release.
TLDR; It's a game of putting sums of proverbial eggs inside a basket while standing on surfboard. Good luck catching that one big wave.
Forex Trading Is A Risky Business, Tread with Care
Yes, one may trade foreign exchange successfully if they understood just how much risk (potential loss) they can bear every time a position is open and running. Upon that premise, you need to develop market awareness and well-developed system to do Forex trading successfully without bleeding out too much money. To do that, these following hints should be taken into consideration each time you open or exit a Forex trading position:
A. Personalize your trades
Each individual trader will react differently to specific market condition on a specific currency pair. That's a normal and natural thing when you do Forex Trading. You don't need to stick yourself to rules or trading rites imposed by others. Chances are, it won't work as both parties intend it to be.
You'll still need guidance from other experts, only to frame out the big picture. From that point, you can personalize all the fine details to suit your Forex trading style. Know your pairs. Set your time frame. Pick your tools of trade.
B. Stay disciplined and be patient
Patience and discipline is the key recipe to do Forex trading successfully. Do not rush any signal or merely over trade to compensate your losses. Trade like a military trained sniper. Take aim only on best Forex trading signal, and fire off your trade executions when all the rules set beforehand clicked.
Setting aside impulsive emotions from your trades can significantly improve not only your profit but also saving your capital from unnecessary losses.
C. Be realistic
A good trader will measure how much capital/deposit should they risk for each trading position (capital exposability). A longer term Forex trading goals provide more return than short-term one, albeit at higher risk.
In other words, if you expect a starting fund at USD 100 to develop into USD 2,500 overnight, you'll need a wizardry advisor not a Forex trading mentor. Realistically you'll need to allocate months of good Forex trading (consistent profits) to get to that point.
D. Trade with Fair Forex Broker
Forex Trading with trusted Forex Broker is a key factor in securing your profit. Technically speaking, this is directly related by their market model. To understand it, ask your Forex Broker as in how do they manage and transmit client's market order.
Fair Forex Broker will transmit your requested market order without any intervention, which means no re-quote or fake slippage. In turns, this fair Forex trading condition will make each pip (profit) gain more transparent and consistent.
E. Manage your risk
As Warren Buffet said, "there are two rules in trading: Rule 1: Never lose money. Rule 2: Remember Rule 1". What he said is true for all serious trader who'd ever wishes to make consistent gains from Forex trading. For that purpose, you need to remember that Stop Loss do exist as form of risk control in Forex Trading.
Don't wait too long to cut loss a floating position that is clearly losing. Same thing applies to profit taking. If you're way too greedy, prepare to get whiplashed by market's reversal. Gauge your realistic profit gain by TP (Take Profit) or limit order.
And also, take cautionary measures when you plan to use leverage. Have your heard of infinite leverage offered by some Forex broker? Sounds fantastic right? You can either profit huge or bleed out your total deposit just as fast (on a losing position) if you took high leverage beyond your margin capacity.
Today, almost everyone with enough capital can access foreign exchange market. However, like most online trading business, one needs to assert some form of control to reduce its inherent risk.
Warren Buffet or George Soros don't get rich by making series of lucky shots. It's because they manage their losses according to their capital/initial deposit exposability. They don't take super high-risk leverage only to get short-term profit.
Take this note home, Forex trading requires yourself not only to invest a handsome amount of money but also time. The actual practice of making consistent profit in Forex trading requires expertise that can only be garnered through small failed steps and meticulous evaluations to avoid making same mistakes, from time to time.