Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.
A plethora of articles and books have been written on what do in order to guarantee success in Forex trading. Here is my take on it:
As a Forex beginner, make sure you educate yourself and get a good grasp of the basics of Forex trading; Educate yourself on different trading strategies, or methodologies. There is a learning curve involved, and everyone’s is different. Do not compare yourself to other traders. Do not rush the process.
After you have acquired a solid education, explore the trading strategies in more depth by trading on a practice account. The aim is to find a strategy that aligns with your personality and lifestyle. Demo trading allows you to do this without significant financial losses and potential irreparable damage to your confidence level.
At this point you will have gleaned some insight into what your preferred trading strategy is. You are now ready to trade on a small account. The advantage of using a small account as opposed to a bigger one, is that you will be able trade in live market conditions and gradually de-sensitize yourself to the various emotions which are triggered when putting money on the line. Trade with as small a size as possible, small enough to not worry about what might happen if you sustain a string of losses, while not so small as to be inconsequential, as if you were trading on a demo platform. Gradually increase your trade sizes, only after you have become consistently successful, and feel ready to trade bigger sizes.
While still trading on a small account, develop a trading plan according to the rules of your method. Make it realistic so that it will not be tedious to follow. Your trading plan should be well defined, and not vague. Stat the exact conditions under which you will enter or exit a trade. If you like scalping, try to identify specific setups that you will adhere to at all times.
Your trading plan should include strict money management guidelines, such as the maximum amount of your account that you will put at risk at any one time. One cannot over-emphasize the importance of a risk plan. A mediocre trading strategy is more likely to produce consistently successful results when traded with appropriate risk management, than a superb one would, if traded in a random fashion with scant regard to account preservation.
Accept that psychology plays a major role in trading. Don’t be blindsided by the emtions you feel when you incur losses. They are normal business expenses.
Trade your plan, day in, day out. You can make modifications to improve its performance when necessary, but be disciplined in your approach. You have already done the work, so now is the time to reap the benefits. Beware the pitfalls of success. Don’t get careless with it. Treat your trading like the business it is!
Undoubtedly, much more could be said, but for the sake of brevity, I will stop here. It is the closest I have come to finding the magic formula to Forex trading success. However, I would love to hear your own ideas on how to successfully morph into Forex Trading champions! A successful trading week to you! 🙂
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