Having complete knowledge about Forex doesn’t ensure success as a trader. You have to get wet to learn swimming. Further, fitness and continuous practice could not be set aside to make a person, a good swimmer. Forex also warrants practice and persistence. Furthermore, you need a trading plan to be successful as occasional visit to the pool helps you win nothing.
Stepping in as and when and trying your luck in Forex, would not give you any profit and you might end up as a loser. Even if you have gained some money, it would be a factor of luck.Instead of doing Forex as a gambling, you could do it as a business , if you plan your actions perfectly.
Avoid using your real currency before you gain confidence in Forex trading. Testing the Forex waters with demo trading is the right choice as it saves you from initial loss and probably from early exit from the Forex trade itself. It helps you to know the basics of trading and lets you gain some confidence about the process of trading.Demo trading for a period is good as it helps you to assesses your skill.
Emotional strength is very much necessary to survive in Forex the market as it easily plunges you into a highly stressful vortex. You should choose the type of trading plan and style that best suits your personality. Random decisions results in failure which would be the result of anxiety, anger, lack of rest or proper sleep. So, being fit is an important factor to emerge as a successful trader.
Allocating a certain percentage of your income to trade in the Forex market is a wise thing instead of risking all your income or borrowing in the hope of good returns. During trading, fixing a certain percentage of your allocated money to trading as an acceptable loss is one of the winning factors as it put brakes to your over enthusiasm and prevents further losses.
In a proper trading plan as like fixing your bearable loss, fixing your target to earn profit is also, a must to do in the list. Every business man works for profit and a disciplined businessman always has certain goals to achieve.You as a Forex trader should also set your targets and it could be daily, weekly, monthly or yearly targets. Generally, many traders fix the potential profit should be at least three times the risk. Setting a percentage of your portfolio as a profit target and reassessing them regularly is an important factor in the Forex trading plan.
Generally traders pay more attention to buy signals than to sell signals. Fearing the loss, many traders don’t want to sell which would result in further loss. Even successful traders end up with more losing trades than the winning trades. But with the practice of limiting losses and managing the money, they make profit.
Plan ahead your exit points which usually are stop loss point and take profit point. Don’t let any emotional stress to take over which hamper your decision making.
Traders generally buy signals, if the profit seems to be three times more than their risk. Today many systems are more reliable than the humans as computers make decisions based on analysis and not on emotions. Today most people rely on systems and make good trades.