The foreign exchange market, better known as forex market, is not an easy market to deal with because of the fluctuations involved and the volatility that comes with it. So, what are the ways to have success in making money from forex trading?
Go for the four As: Approach, Attitude, Assessment and Administration.
You have to have the right approach when trading in forex. You don’t just go out there shelling out money in trades – you’re bound to lose money if you do that.
Find the right approach by matching it with your personality. How comfortable are you with forex? How comfortable are you with trading? How much time can you allot for observing and studying the markets? What methods are you familiar with?
Once you’ve figured out the right approach, test them out through demo accounts provided for free by certain platforms. If the strategies work out well and give you positive results, then stick with it. Try it out with different instruments to polish it further.
It’s not only about what you see on your screens; it’s also about your mindset towards trading.
You have to be patient. The forex market may be fast-paced, but that doesn’t mean you have to rush in making trading decisions as well. You have target prices set; be patient enough to figure out the right timing for entry or exit.
It also helps to be disciplined, especially as you exercise your patience. Discipline makes you wait for that target price, as well as pulling the trigger when signs already point to nowhere.
Attitude is also about not being emotionally attached to your trades. Don’t trade on emotions; use your system. If you believe it’s reliable enough, then act on whatever signals you see.
It will also help to assess your fellow forex traders. What triggers the movements of the larger currency players? What have you noticed about their trades?
Observing the larger players will help you discover other forex trading strategies, but don’t piggyback on them too often or just rely on them for your own money-making tendencies. What will help is knowing how to assess their moves and understanding the rationale behind their judgment.
As an informed forex trader, you should be aware that it’s not all profits in trading. You’re bound to deal with losses every now and then. Even the trading platform and strategy that works best for you will still give you losses that you have to accept.
In the end, it’s all about managing your trades. Be daring and take risks when it is called for, but avoid too much risk that you’ll end up wasting all your hard-earned profit. Let the moments of loss be swift so that you’ll recover easily. If it’s not a gain, then at least try to break even.
There are no rules in trading. What works for you may not work for other traders. Ultimately, you just have to find the right path, and follow that trail. As long as it gives you your profits, then don’t stop and keep going.