Are you considering forex trading as an investment alternative? Would you like to be one of the few who profit? In my experience successful traders have no special talents or skills; but they think and do things differently. Here are some ideas I want you to analyze.
1. Do nothing.
The forex market is open 24 hours a day; but that does not mean you should have open positions all the time. Successful traders trade only when there is profit to be made. You should take into consideration that there are periods when the market is active and periods when it’s not. This may sound strange but some times doing nothing can be very profitable.
2. Pull the trigger even if it hurts.
You should always trade when your system tells you, even if it hurts. Sometimes, after a series of consecutive losses, taking the next trade can be very difficult. But this next trade is the one that will help you recover from your losses and make some profit. Consistency is the difference between rich forex traders and everyone else. I know it’s hard, but the rewards can be enormous.
3. Be loyal to your money management rules.
You should always adhere to sound money management rules, never deviate. Most professional forex market traders agree that you should risk between 1%-2% max on every trade. This will allow you to avoid wiping out your account and at the same time help you make some dollars out of the market.
Some traders try to recover their losses increasing, recklessly, their positions and end up wiping out their accounts.
Sometimes traders think they know where the market is headed and make bigger bets on their assumptions. If you go into a roulette table and bet all your money on the black, just because the ball landed on the red on 10 consecutive spins, you are going to lose all your money. This is called gamblers fallacy. You should always follow your money management rules, no matter how sure you think you are of the outcome.
I know trading the forex market can be a rewarding occupation; you need no special skills or natural talents to become a successful trader. Anyone with the determination and the right information can learn how to trade. The only thing you need is good mechanical system with a positive expectancy, sound money management rules, and above all self-discipline.