How bad do you want to succeed in trading the fx market? Certainly, every trader wants to, but you specifically, how bad do you want it?
There is no doubt that forex trading is a very risky business , so beware of sweet marketers or brokers who will sweet talk you into believing that forex is as easy as ABC. The big question here is this, if it’s really as easy as they said, then why are there blown-out accounts?
That said, while you’d not want to complicate your trade, here are 4 definitive pillars of forex trading success you should adopt.
# 1 An effective trade-entry strategy
I totally agree with Michael Porter—“The essence of strategy is choosing what not to do.’’
An effective trade-entry strategy is one of the most definitive pillars of forex trading success. This entry strategy is not just a ‘strategy’; in fact it’s one of the factors that determine the success of a trade.
Additionally, your trade-entry strategy has to be effective and reliable to some degree before applying it on a trade.
Apparently, some traders today are pretty much clueless about what their entry strategy is all about, and some are even more confused because they combine different ‘unclear’ methods together as entry strategy. This is a wrong approach and also one of the major reasons why they’re not likely to make a cent from the fx-market.
To set things right, you need to develop a simple and effective trade entry strategy which enable you to discover market entries with high-opportunities. Also, get yourself abreast with price actions.
Now, once your strategy is decided, work on your trading plan (a traders blue print). A setup like this sets in once your entry strategy is decided. For example, trader x might setup something like ‘…I’ll only enter the market if my (trader x) setup manifests or happens…’’. Consequently, trader x won’t enter the market if his or her already setup (trading plan) doesn’t happen.
#2 A Strong disciplined will.
Another pillar of forex trading success is the strong discipline will. Having a strong discipline will enable you to stick to your plan (T.plan) no matter what happens in the market. In fact, some experts refers to it as “the ‘glue’ that holds every aspects of your trading approach together.”—Nial Fuller
Developing a strong discipline will is not easy to achieve, but with commitment and practice you’ll definitely master it. Majorly, what is required of you is the mastering of your trading strategy (entry, exit strategy and so on) and waiting for the right chance before you hit the green button. And mastering this art makes it easy for you to stick to your money management plan, and to your exit strategy.
#3 An effective money management plan.
An effective money management plan is another strong pillar of forex trading success. In fact it’s a crucial pillar that requires more attention. As a business person, your primary aim of signing up with a fx broker and funding the account is to make money, so the development an effective money management plan shouldn’t be taken lightly.
Since ‘Forex’ a very risky investment, how much you risk per trader should be well decided upon before entering a trade. It’s very much advisable that the amount you want to invest should be an amount that you can let go easily and not something that will run you into debt.
For example, if Tony funded his account with $1000, and his risk limit per trade is $25. This mean that if the market goes south (against Tony) he still has about $975 balance to trade over series of trades–to make up.
Note: The calculated loss as in the case of Tony is $25-It’s a strategic loss.
#4 Effective trade-exit strategies.
Of course, while a trader is planning for his entry strategy he should also plan for his exit strategy.
Yes, most traders don’t know that such strategy exist, and if you’re one of them, you’ll agree with me that sometimes you get confused while trying to exit a trade. Sometimes you feel like;
- Should I exit now that I’ve made 50 pips?
- Should I wait for more pips?
- What if the market swallows all that I’ve worked hard for? All these keep running on your mind because you don’t have a defined exit strategy.
Here is the outcome of trades without an exit strategy;
- The trader exit with far less profit he could have made from the market.
- The trader might be too greedy and in no time, he loss it all.
Note: Sometimes, the market conditions at the exact time you enter trade also depends on how you exit a trade.
In conclusion, if you’re a newbie or an average trader trying to find your feet in trading forex, I’ll advice you focus your attention mainly on these 4 definitive pillars we discussed above.
Have a wonderful trade.