10 Tips to Becoming a Successful Forex Trader

Many people are wondering whether or not forex trading is a good way to make money or even an activity that’s activity is in any way enjoyable. There’s no question that forex trading can be fun, but most people can tell you that they would rather have time for activities that are more engaging or more personally rewarding. Regardless of when you choose to start trading forex, I think you will begin to realize how much time you are willing to invest into a profitable activity and how quickly it can be a challenge to consistently make a profit.

Before you begin trading forex I give you these ten tips to help you become a more successful trader.

1- Keep your trading as simple as you possibly can. Most people who trade forex and associate with often believe that the more complex they make their trading, the more their profits should be. This is not true! Almost every forex trader, including myself, have a friend or two who goes from zero to $100,000 in 12 months… This does not mean they don’t make mistakes, but they know when to stop. They know when to buy or sell. Keeping your trading as simple as possible will help reduce the number of mistakes you make, whereas if you make a trading system too complicated it’s hard to keep track of all your open positions and it’s also hard to reason when you should be selling or buying.

2- Don’t neglect your obvious setups. If you have a high probability setup that is a very strong signal for you to take a position then don’t neglect it! Remember that the old saying goes “plan your work, and play your plan”. By planning your trades ahead of time you give yourself a much better chance of staying in the market long enough to obtain a high probability. This is key to long-term success.

3- Don’t trade every signal that comes your way. This sounds contradictory to the first tip above, but let me explain. When you find a signal that typically moves 5 to 10 pips a pop, but you are your own judge to decide which signal to take and which to pass, then take the signal if everyone was trading it and making money.

4- Increase your money management rules. If you want to be a successful forex trader then you need to take a 100 % risk management philosophy. The question is can you afford the risk? Are you willing to lose 5% of your account on any one trade? Most beginner traders have a big ego and are unwilling to lose. The lost 5% will add up very quickly if there are attainments in the market. You need to set strict money management rules in your forex account that if you lost 5% on any one trade then say your broker would returning a 50% margin to you.

5- Choose software that suits your strategy. There are a lot of different software programs that can make forex trading fun and profitable. Since you can trade on a demo account without risking any of your money you can choose the one that’s best for you.

6- Don’t get emotional. We’ve all heard the saying that it’s not the market that is making the moves, it is the trader. This is true, but it does not mean that you cannot make trading moves in the market. You just need to make sure that your emotions are in check. Emotions make traders lose focus and usually lead to bad decisions. I’ll say if you have a particular strategy that is very well-liked and suggested by 10 other traders in the forex community then go ahead and stick with it. If they are making money when everyone else is losing then by all means follow their strategy as it’s probably a good one. This is not being rash, it is following the best strategy because that is all that’s available for you at that time.

7- Don’t go against the trend. This is prevalent in many parts of the world where societies are trying to “act rich” by buying expensive items and most of the time when something is no longer a trend but a trend you want to go against it. Most disagree with this. Most would say that a trend is when a currency is in an upward or downward direction. Another saying is a trend is when it goes up on top of the F trend.

8- The forex market is simple. Over unofficial and real it is 52% breakfast. That’s all I know about forex trading because that’s all I learned education comes from my own experience and that plenty of people failed before they went to succeed. Trying to find a magic formula or forex trading system to succeed is just not possible.

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