5 THINGS A FOREX TRADER NEEDS TO ARM THEMSELVES WITH IN THIS SEASON!

 

1. Define Goals and Trading Style

Before you set out on any journey, it is imperative to have some idea of your destination and how you will get there. Consequently, it is imperative to have clear goals in mind, then ensure your trading method is capable of achieving these goals. Each trading style has a different risk profile, which requires a certain attitude and approach to trade successfully.


2. The Broker and Trading Platform

Choosing a reputable broker is of paramount importance, and spending time researching the differences between brokers will be very helpful. You must know each broker's policies and how they go about making a market. For example, trading in the over-the-counter market or spot market is different from trading the exchange-driven markets. Thats why I recommend FXTM. use the link below to sign up now: https://www.forextime.com/?partner_id=4934433

3. Determine Entry and Exit Points

Many traders get confused by conflicting information that occurs when looking at charts in different timeframes. What shows up as a buying opportunity on a weekly chart could show up as a sell signal on an intraday chart.

Therefore, if you are taking your basic trading direction from a weekly chart and using a daily chart to time entry, be sure to synchronize the two. In other words, if the weekly chart is giving you a buy signal, wait until the daily chart also confirms a buy signal. Keep your timing in sync.


4. Risk: Reward Ratio

Before trading, it's important to determine the level of risk that you're comfortable taking on each trade and how much can realistically be earned. A risk-reward ratio helps traders identify whether they have a chance to earn a profit over the long term.

For example, if the potential loss per trade is $200 and the potential profit per trade equals $600, the risk-reward ratio would equal 1:2.

  • If ten trades were placed and a profit was earned on just four of the ten trades, the total profit would equal $2,400 ($600*4).
  • As a result, six of the ten trades would've lost money at $200 each, which equals $1,200 in total losses ($200*6).
  • In other words, a trader would earn a profit on the ten trades, despite being correct only 40% of the time.

5. Focus and Small Losses

Once you have funded your account, the most important thing to remember is your money is at risk. Therefore, your money should not be needed for regular living expenses. Think of your trading money like vacation money. Once the vacation is over, your money is spent. Have the same attitude toward trading. This will psychologically prepare you to accept small losses, which is key to managing your risk. By focusing on your trades and accepting small losses rather than constantly counting your equity, you will be much more successful.

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