Successful forex traders are a rare species. Many aspire to FX success, but few actually achieve it.
In theory forex trading is very simple, but it takes a certain kind of person to be a successful forex trader, and not every body is that person!
The first big mistake many enthusiastic would-be forex traders make is to dive right into forex trading without knowing a thing about it. It might be easy to open a forex trading account, but this does not mean you can immediately start trading and expect to rack up a small fortune in quick time.
You might think in your naivety that the time is right to buy, but as soon as you do the market changes. So you panic and sell, only to lose money when the market recovers again.
Greed and fear are the two traits you must lose when trading the forex markets. If you are greedy, you will make trades when perhaps you should not. Getting too excited and being too keen to make a fortune is entirely the wrong attitude to have and is very costly.
A successful trader is not ruled by his or her emotions. You will learn when it is right to take five and resist a trade that goes against your planned strategy. You must remain cool, even when things look like going pear-shaped. If you rush to sell the minute the market moves against you, you will lose money left, right and centre. Keep fear and greed out of the equation and you will reap the rewards. Successful forex trading requires a strategy.
Once you have your strategy stick to it. Large organisations and experienced forex traders have strategies. They make money by playing to a set of rules. Stick by your rules and there is less chance you will do something stupid in the heat of the moment.
The best way to be a successful forex trader is to pay attention to the markets. Spend time watching how the market reacts to certain stimuli. Once you know the markets well, you will be far better at predicting trends in future markets. Always limit your risk, preferably to 1% and 3%.
As your core equity rises, you can raise your risk per transaction for greater profit, but as we always warn, greed is a one-way ticket to losses in the forex trading markets, so be careful.
Becoming a successful forex trader requires a great deal of skill. Success has to be earned, so patience is an FX trading virtue. Be sure to immerse yourself in all aspects of forex trading and your diligence will be rewarded with forex profits.
Miles Carmichael is a Professional Forex Trader of ten years experience and success. Happy to share knowledge and know how to assist fellow traders.
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