Irrespective of its numbers, charts and ratios, forex trading is closer to art than science. As with every artistic endeavour, it involves some natural talent, but the artist’s success is never solely reliant on this. The very best traders, like the true masters, must hone their skills through hours of practice and militaristic self-discipline. They must be able to not only appreciate their success, but dissect their work, self-analysing their trades to discern the factors behind their success or failure, all the while schooling themselves to be free of fear and greed.
With the right mind set you, too, can perfect whatever natural propensity you possess. Here’s how…
1 Define Your Goals and Choose a Style of Trading that’s Compatible with Them
Before you embark on your forex journey, you must know your destination and have a rough idea of how to reach it. To know that, you must have clear goals in mind with regards to what you want to achieve, and then find a trading method capable of achieving them. Different trading styles have different approaches and risk profiles, and the successful trader in each area requires very different skill sets and natural leanings. Day trading, for example, is much more suitable for those who cannot sleep with an open position in the market than other options. On the other hand, someone with funds that would benefit from an appreciation in trade over a period of months, with the ability to be patient and play the long game, would be well suited to position trading. No single trading style is automatically superior to another. To be successful, you simply need to find one that complements your personality. If you don’t find the right fit, expect a great deal of stress and potentially catastrophic losses.
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2 Choose a Broker You Feel Comfortable With
Choosing a reputable broker, like Sucden Financial, is of paramount importance. The most fundamental consideration is to find one that offers a trading platform capable of performing the analysis you require, so spend time researching the differences between brokers and the individual packages they offer. Make it your mission to shortlist potential brokers, and then learn each of their policies and how they go about making a market before settling on one. Make sure, too, that your broker’s trading platform is suitable for the analysis you want to do. For example, if you like to trade off of Fibonacci numbers, check that the broker’s platform can draw Fibonacci lines. Remember: a good broker with a poor platform, or a good platform with a poor broker, can be problematic, so make sure that you get the best of both.
3 Choose a Methodology and be Consistent in its Application
Before you think about entering a market as a trader, have some idea of how you will make the decisions to execute your trades. Consider the information that you’ll need to make the appropriate choices as to whether to enter or exit a trade. Some people might choose to look at the underlying fundamentals of the company or economy, for example, before using a chart to determine the best time to make their move, whilst others will use technical analysis based on charts. Bear in mind that it is fundamentals which drive trends in the long-term, and chart patterns that usually offer trading opportunities in the short term. Irrespective of which methodology you choose, however, the most important thing is to remain consistent.
Above all, remember this: the harder you practice, the luckier you’ll become.