So far, the Forex market remains the most lucrative financial market with an enormous daily turnover of close to $7 trillion, positively dwarfing other sectors. This form of currency trading can be tasking as a result of many external factors at play but by being able to master the specifics of this tricky marketplace, one can still succeed in it. Listed below are some of the behavioral patterns to adopt and major pitfalls to avoid as a Forex trader.
Use stop loss and take profit levels
It's good to have a strong and reliable trading system. However, if you lack clear guidelines for closing each trade, you can easily morph into a big loser in no time. So it's so important to sit down and reason what amount of profit is realistic for each position, and what percentage loss would represent a true trend reversal from which there is no coming back.
Develop and follow a trading system
If you want to make a steady profit in Forex trading, you need a good trading system. Also, note that the biggest enemy of a direct trader is emotion. With a substantial amount of money in the market, you're susceptible to making unwise decisions that can cost you a lot. So, it's very important to develop a sound strategy and clear set of rules that you adhere to regardless of what your heart or gut tells you at some point.
Don't succumb to stress
Forex trading is not a child's play so you're serious about making it in this line, you need to be serious about it. It might seem trite, but this is actually what separates the winner from the losers in the field. It's okay to feel a little insecure or worried especially when you notice you're losing a lot of money but you need to be strong against all odds.
Solving the Conundrum of the FX market through careful understanding of the bull and bear entanglement.
Global Forex market is the largest financial market in the world and the potential to reap profits in the arena entices foreign-exchange traders of all levels, from greenhorns just learning about financial markets even to those that have learned the ropes of navigating safely in the bull and bear tussle of the FX market.
Being a trader for some years now, I can confidently say that before you think of being an FX trader, there are questions you must ask yourself. It is only after you have candidly answered these questions that you may venture into FX market trading. These questions include but are not limited to the following;
Firstly, why do I want to venture into the FX market? The next would be how well do I cope with loss. Am I faint-hearted, how do I start, etc. Once you have answered the unending barrage of questions in your mind, only then are you ready to move to the next phase of trading the FX market.
The second is impatience. While trading, many traders always seek immediate gratification. Hence, they always wish the market to move in a certain way to make quick gains. When asked they would say they are scalping. This is far from what scalping is. Scalping is the careful calculation of market variables (fundamental and technical) devoid of influencing sentiments before initiating any trade. When the market is not moving in your favor, learn to wait till it's out. But, be careful with how you wait.
Thirdly, as much as we advise traders to be patient, we also do warn that they learn to know when to put a stop to a trade that is not going right. That being said with a lot size that is suitable for one's account, this shouldn't pose much threat.
Also, a trader must learn to control his emotions and not be carried away by the success achieved in a few initiated trades or wallow in dismay as a result of encountering some few losses. This may be almost impossible to do as trading would most often than not influence our emotions more than we care to agree.
Lastly, never trade without initiating the stop loss and taking profit command. Stop loss, is the extent you are willing to let your account drain if your calculations do not go your way. Note, once your trade is about to hit stop loss, do not shift the stop loss further unless you are very certain of the trade.
Take profit, on the other hand, is a command initiated to automatically take profit after a certain amount of gain has been made. If you haven't known these, learn them and make it a habit.
On a final note, my advice is that before you embark on trading pls learn for as long as you can using the demo account. Remember, winners never quit and quitters never win. Stay tuned on ritrends.com.
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