Most successful forex traders who have made it past the beginner level attest to the fact that the only way that they became successful, is they managed to be traders long enough to learn how to trade well.
This literally means that you should not lose trades large enough to wipe out your account within a short time span. Good money management, discipline and a forex trading plan, among other character traits, are all important aspects in order to become a successful forex trader.
An important mind shift to have when you begin trading is to think of your trading as you would a real business. If you think of your trading as a business, you will most likely stop to think about all your actions and how they impact your business.
Forex trading can be a very fast paced and highly brutal business to be in. The rules below will help bring some sanity and order to the seemingly random chaos that most beginning trader’s experience.
- Get a good education
Like with most businesses, you can avoid a lot of mistakes by getting a good education. Knowing the lingo, what to expect and what to avoid while trading will help you intellectually understand what you need do to stay in the game.
One place to get such a good education is at forex education UK. It is good to make sure that the education you get is from tutors with actual trading experience.
- Have a trading plan
You can either create a trading plan of your own based on best principles and practices of successful traders or you could simply adopt someone else’s trading plan that suits your needs and temperament. Either way, trading without a plan is a disastrous idea.
- Journalize your trades and your thoughts
Keeping logs of your trades in detail including time of entry, time of exit, position size, stop losses made etc. will help you reflect and learn from your mistakes and successes. You will also be able to assess patterns of behavior that are helpful or detrimental to your forex business.
- Don’t over leverage your account
One of the biggest reasons why most budding traders bust their accounts within their first year of trading is because they have over leveraged their accounts. This means that when they get to lose on a trade, the effect is compounded by such a large extent that the balance on their accounts is wiped out with just a few unsuccessful trades.
Balance your account by using a more substantial capital investment and less leverage if you want to survive long enough in your forex business.
- Don’t over-rely on any software or robot and especially not without research and verification
Especially when you start trading, learn to rely on your own abilities to become a successful trader. If you rely on other people’s skills or robots, you will not have the growth necessary to become successful in the long term. Also, you will not be able to adjust and adapt your forex trading strategy as soon as market conditions change to prevent the effective use of someone else’s software or robot.