Are there any secrets or tricks you need to know to become a successful trader? This is the question that bothers the absolute majority of aspiring Forex traders.
Truth be told, beginners are not the only ones concerned with this issue. Many experienced traders never stop looking for the “Holy Grail” that would reveal the secrets to becoming a millionaire overnight.
From this article, you’ll find out some major rules that will allow you to become a better trader at a minimum risk. These rules have to do with capital management, trading techniques, and the personality of a trader. Let’s get started!
Secret No.1. There is no Holy Grail
Sad but true. A 100% winning trading strategy is nothing more than a myth. In Forex trading, you must only rely on yourself. There is no magic way to maximize your profits while eliminating your losses. Losses are inevitable. The sooner you embrace this truth, the better. The main thing to focus on is your overall profits over a given period (day, week, month, or year). If you see that your profits are growing, you’re doing everything right.
Money management is another important factor. In each trade, you shouldn’t risk more than 0.1% of your deposit. Suppose, you have $1,000 in your trading account. This means that your lot must not exceed $1. This is a surefire way to make your deposit last longer.
Secret No.2. Keep it simple
The more sophisticated your selected trading strategy is, the lower the chance that it will be profitable.
Sophisticated strategies require elaborate market analysis. While you’re busy analyzing the market, a price will move farther. As a result, you’ll miss the optimal entry point. This is especially true for day trading that requires a trader to make fast decisions. Lingering just one moment may ruin all your effort.
Secret No. 3. Don’t trade on a whim
When it comes to opening a trade, you must be pursuing potential profits rather than acting on a whim. You start your trading platform and study a price chart. If you detect a pattern in price movement, you place an order. That’s it.
If, on the contrary, the market is volatile and lacks certainty, the best thing is to wait for a better opportunity. This simple yet effective approach reduces the number of losing trades.
Secret No.4. Don’t stop learning
Don’t let trading eat up all your time. Make the habit of learning something new every day. Read books by trading experts, discover new strategies, brush up your skills in technical analysis, and so on. Plus, it’s a good idea to watch webinars and sign up for an online trading course. Don’t be lazy! Continuous learning is the key to becoming a Forex pro.
Secret No. 5. Develop a clear plan
Take ample time to develop your trading plan that would outline your short-term and long-term goals and trading strategies. Along with undeniable practical value, a trading plan can have a positive impact on your psychological state. With such a reliable trading companion, you’ll feel more confident and optimistic. Plus, having a trading plan can help relieve stress and avoid emotional trades.
Secret No. 6. Pre-Trading routine
Remember the three must-do things before opening a trade. First, you need to do technical analysis. Second, you need to identify the entry points. Third, you need to calculate stop orders. Follow these simple steps in this exact order, and you’ll be safe!
To wrap it up, let me give you one more tip. If trading is not your thing but you still want to capitalize on it, you should explore the possibility of automated trading. Nowadays, there is no lack of clever robots, advisors, and similar trading software.
This is not an exhaustive list of Forex trading secrets, and you’re sure to find more useful tips on the web. We’ve focused on the six golden rules that will help you make a good start in Forex trading!