Everyone has their own style and spotting trends in the Forex trading market. If you are hanging out with six different traders, they may all have their own angle to day use in each and everyone of them may be profitable.
I have a friend who has made a fortune doing forex trading online for years. I once asked him if there are any common principles of success when it comes to currency trading. My millionaire forex trader friend told me most successful currency traders tend to use forex trading techniques that they are comfortable and confident with.
He emphasized that what works for one person may not be so attractive to another individual and vice versa. However, successful traders do have a few things in common when setting their guidelines. He went on and confessed to me the top 10 forex tips and tricks to succeed in forex trading as follows:
1. Establish a plan and stick to it – you made a plan for a reason. You did research, you probably track investments over a long period of time and then finally identify the forex trading system that worked for you. Staying with this system and using good money management is a way to keep the money rolling in. Don’t make radical changes for no good reason.
2. Trends or transfer a reason – Use a good forex trend system and stick with it. If you’re trying to buck the system and go against a trend or predict one because of a gut feeling, you’re going to find yourself out of the forex market before you know. Follow trends and use them to make money.
3. Keep your money safe – you can do this by limiting your forex investment to 3 to 5% of your overall bankroll. Think about it, this allows you to have 20 dead deals before you would ever be out of the market. If you’re doing your homework, the likelihood of this is very slim. Those that get overconfident because they have had a succession of profitable deals may decide that they can increase their profitability by committing their entire bankroll to one trade. You can all but guarantee that trade will be a loser and they will be broke.
4. Don’t push a bad position – when you’re faced with a losing deal, cut your losses and get out as soon as you can. There is no shame in admitting that he lost a little money as it happens to everyone sooner or later in this market. The key is to minimize your losses and get your money back out into a more profitable situation.
5. Take the Money and run – a lot of traders don’t know when to get out. They get involved in a trade and don’t set target profit and have no idea when the right time to sell is. Your research should give you a good idea of how much money you can make on your deal. Know what the limits are and set yourself target profit even before you enter the trade. Regardless of how fast you get there, take your profit before the trend reverses and you get buried.
6. Be emotionless – it may sound a little cold, but there is no room for emotions in the forex trading. Trading is cut and dry, you win some and you lose some. Any trader worth their salt will sit there and you’ll have no clue if they just made a fortune or got buried. You simply need to keep your emotions out of the game.
7. If it doesn’t come from you, don’t use it – this is a pretty basic rule and won the absolutely must follow. Do not trust any information that comes from anyone else other than your own research. When people try to give you tips, say thanks but no thanks and avoid the pratfall of trying to make easy money.
8. Keep a log – everyone has to learn from their successes and failures. Keeping a journal of what you bought, how much you bought it for and when you sold will enable you to look back at all of your previous deals and break down better what worked and what did not. This will make you a much better trader in the future.
9. Where there is doubt, there should be no trade – you’re going to have too many positions that you feel strongly about to make a mistake and investing in something that you are not 100% sure is going to make money. This is not to say every deal that you do make is going to be profitable, but risking your money in a doubtful situation is never a good idea.
10. Don’t over extend – some traders get themselves into a position where they are looking at several different profitable opportunities all during the same period. While it would be great to be involved in them all, it is simply not realistic. Spreading yourself out too thin will end up with your investments being out of control and you not being able to manage them. The best way is to only enter the second trade when the first trade has break even or have protected some profits.