Tips for a Successful Forex Trader

Tips for a Successful Forex Trade

Not knowing the right time to stop an operation or have no idea why you got a good profitability are common difficulties for anyone who is starting to trade Forex. To warn startups not to fall into some pitfalls or even self-sabotage at the time of investing, I separated these 10 tips from a successful Forex Trader. Read, put into practice and become one!

1. Money is a byproduct of your goals
Just as in a job the focus should not be salary, but rather the quality of work, your goal as a Forex trader should not be money, but rather operate well, following the rules, being psychologically well. Do a good job as a trader and the money will be a natural consequence.

2. Stay 100% focused on the Trade
It is important to work in a suitable environment without distractions. While you are operating, this activity should be the only thing that matters. You should be with the present mind, focused on operating. The rest is for later. I recommend that you watch the movie Power Beyond Life (2006, original title: Peaceful Warrior).

3. Cut your losses early, and let the profits run
It may seem obvious, but most beginner forex traders do just the opposite. When the operation is negative, they increase the SL (StopLoss) wanting to give more space for the market to react and thus it is in profit, they close in the first hesitation to guarantee the gains. In this way, the losses of the beginners get big and the profits small.

If the operation was not in the intended direction and you believe you should wax it, then shut down. The first loss is always the smallest loss. You can always re-enter when the market reacts.

If a position is in profit, manage. Be patient and wait for it to reach your TP (target profit), ie your goal of gain in an operation. It is not often that this will happen, eventually the market will give way before reaching your goals, so it is important to go moving your SL when operations go in your favor so you never let a profitable operation become a losing operation. But, be careful not to make the stops too fair. Even an operation going in your favor needs a certain amount of space to retract and then keep going in favor.

4. Discipline means to do the same
Operate forex or is to follow a method, a set of clear and well established rules. It is technical and requires discipline. And discipline, in this context, is nothing more than obeying the rules. Do what is written. Do not invent fashion.

There is room for creativity and for new ideas. The methods evolve. But it is not with hunches applied randomly in the real market. Test your ideas. Check out historical data that they work, so make the rules better and keep being disciplined by following the new rules. Only then you will be able to be a successful Forex trader.

5. Keep a log of operations
Many underestimate the importance of an operations diary. In fact, simply keeping a record of past operations is not good enough, the point is that without it you will not be able to keep the next tip.

6. If you do not know why you won, you will not continue to win. If you do not know why you lost, you will continue to lose.
Knowing that the market can only rise or fall, a layman could say that the chance of winning or losing on the market would be 50%. Ledo mistake. It is much easier to lose than to win. You need to know what you have done that works, to keep doing it. And you need to identify the reasons for losing so that you can learn from it and avoid situations where possible in the future. How do you do this? Studying your trading diary.

7. If the practice does not lead you to the best results it is because you are practicing wrong.
They say that only practice that leads to perfection, so if you are not improving with practice, it is safe to say that there is something wrong.

8. Never operate as if you have too much to gain. Always operate as if you have little to lose.
Whoever operates seeking high profits by operation, operates with greed. Whoever works with greed sooner or later ends up taking a much greater tumble than expected. Use proper risk management. Never expose yourself too much to the market.

Respect the market and do not play with it. The market is unpredictable and treacherous. If you are not prepared, one day it will knock you over. Expect the best, but always be prepared for the worst.

Controlling losses is the most important thing you can do in the market. Whether through the use of stop losses, through careful money management (without too much exposure to a single position, for example), it is important that losses in one or several trades do not compromise the entire portfolio. Do not lose is the first priority of the Forex trader.

9. Stop is not loss. Stop is a protection mechanism and a statistical data of who is in control.
Always, always operate with stops. Establish the exit point strategically before opening the position - calculate the size of your position so you do not expose yourself too much to the risk. Never increase your stop after the operation is already open. If it is to stop, stop it.

Fleeing from the strategy in the hope that the operation will recover is a classic mistake and always the worst option, because the tendency is that you end up losing more later. In a market of risks and volatility, your gain must come from a balance between large gains and small losses. Accept the healthy first loss, following your strategy and prepared for all scenarios.

Of course technically a stop means a loss. And loss is loss. But you should not see the stop that way, or you'll start to be afraid of it. Stop is your friend. Setting the stop and respecting it shows that you are in control. If you increase SL, or do not use it, you have given up control and become a supporter.

No strategy always hits. They all have some acceptable error rate. You must know their numbers. If you are being stuffed more than you should, stop for a little and exercise the 6th tip.

10. Much is the absence of reason
You must operate without fear. You need to have confidence that the strategy you use is winning over time. Be assured that the result of the last operations will not influence the outcome of the next operation.

So be sure to get into the next deal because you lost in the last two. And do not look for entry where it does not exist, if you've already won the last five operations in a row.

Your StopLoss must have been strategically placed, and you figured out how much you could risk before opening the position. So if the operation is negative now, it's because it has not yet reached SL and has a chance to recover, and if it stops, you know you will not lose more than the default. This is all reason. And it all goes against that feeling that makes you irrational called fear.