What is the meaning of a Forex Trader? Forex refers to the foreign exchange market which is a global market which is used for the trading of currencies. A successful forex trader can earn money easily, but one needs to follow tricky steps to be able to do so. Anyone can become a forex trader but a lot of skills are required to do so. How to become a successful forex trader? How can you better your chances of succeeding as a forex trader?
How To Become A Successful Forex Trader?
1. Choosing the style of trading
You are supposed to have clear goals in mind and chose the style of trading that will helo you fulfill it. Consider day trading if you are not the risky type. If you can hold up for the period of several months, you should become a position trader instead. The kind of trading you undertake should fit your personality.
2. Choose the appropriate broker
Choose a broker who will easily give you a platform for trading that is concurrent also with your style of trading. Know the policies put forward by the broker and read the documentation carefully. Make sure you get a good broker with a good broker or anything otherwise can pose a problem for you.
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3. Choose a consistent methodology
Understand the ways that you can execute your trades as every Forex trader needs some beforehand idea before entering his profession. You can use charts to understand the fundamentals of the company or you can use technical analysis as a methodology. Be consistent in what you do and don’t alter your ways to jumble things up.
4. Time frame for direction analysis should be more and the time for entry or exit must be less
If you are planning on your directional analysis using a weekly chart and time entry using daily charts, you should synchronize the two. After the weekly chart gives you the idea to buy, wait until the daily chart also confirms so.
5. Calculating expectancy
This is the method to determine the reliability of your system. The formula that can be used is
W= Average winning trade
L= average losing trade
P=Percentage win ratio
For example, a positive 40% expectancy will mean that you will be getting a return of 40 cents per dollar in the long run.
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6. Focus on your trades and love the small losses
Trading money should not be put on personal uses. Focus more on your trades and accept small losses instead of counting your equities over and over again. Only allow your trades to be at a maximum risk of about 2% of your total funds or change your way of trade it so is not the case.
7. Positive feedback loop is necessary
When your trade is executed well, you will form a positive feedback pattern. Even if you lose a small amount, you will be building a positive feedback loop.
8. Perform analysis on weekends
Study your weekly charts and your trades at the end of every week. Read about the imminent dangers in the market and plan accordingly by taking out some time to do so.
9. Keep a record in the printed form
Printing the record of your trade is the best tool that can be used by a trader. You can refer to it over and over again and can easily find your mistakes and correct it in time.