One of the best ways to become a consistently profitable Forex trader is to do the following:
- Take responsibility for your own mistakes and actions.
- Be accountable to someone for your trading results.
- Learn about Support and Resistance in all its guises.
- Learn how to conduct Top Down analysis of a currency pair.
- Get yourself a Forex Strategy.
- Back test each and every Forex strategy or system 1000s of times before trading them in a live account.
- Trade in a Demo Account before trading Forex in a Live account.
- Keep a record of your trades (excel spreadsheet) and keep a Trading Journal noting your progress, your reflections on your trading and how you feel.
- Take PC or laptop screenshots of your trade setups and their progress to completion.
- Learn to fully plan your trades in their entirety and then trade that plan. Prior Preparation Prevents Poor Performance.
- Adopt good money and risk management.
- Find yourself a successful Forex Tutor or Mentor - this will be money well spent and will fast track your learning journey. Attend their Forex classes/seminars/workshops and soak up all their knowledge.
- If you have a run of losing trades - then stop trading, take a break and re-asses and note your findings in your Journal. Put the problem right once you have identified it.
- If you are struggling to find a trade then the market is probably consolidating, so go do something else!
- Be patient and let the trade set ups come to you, don't force it.
- Forex can be addictive so try not too let it impact upon other aspects of your life and don't sit there staring at your screen all day watching every pip movement.
- When you do start trading in a Live account do yourself a BIG favour and start off trading in a Micro account. If you blow it up you should be able to reseed it, you probably won't be able to do that in a Normal trading account.
- Once you are consistently profitable in a Live Micro Account then start to scale things up slowly. When you are ready (proven track record in Micro Account) move upto a Mini-Account and so on. Trading a Normal account with Large Lot sizes is significantly different 'emotionally' to trading a Demo or Micro account.
- Make sure your account is sufficiently funded. You should not be risking more than 1% of your account on any one trade and at a max total of 3 - 5% for a Micro account, if you really must. The point is when you make a mistake, if your account is sufficiently funded and your are controlling your risk, your account will survive to allow you to trade another day.
- Use fractional money management to determine your position size based upon the number of desired positions, your account size and the Reward : Risk Ratio for that trade.
- Do yourself a favour and employ a Stop Loss at all times (at least until you become a seasoned Forex Master and your strategy allows you not to do so, which you will have, of course, back tested!)
- Network and link up with other Forex Traders and exchange ideas online - Skype is great for this. Trading with other like minded people is also a great way to learn as you swap knowledge, ideas and trade setups.
- Enjoy the fruits of your labours.
Martin
www.forex-crazy.com
