Have you ever thought about what it takes to become an exquisite trader in the Forex market? Are you passionate about making money via the foreign exchange as a real professional? If so, you are among numerous enthusiasts who are eager to make this type of business one of their primary sources of income.
Although Forex trading isn’t rocket science, it takes some time to know all the tips and tricks. Learning Forex trade is one of the most cost-effective things you can do for your future. As you know, Forex stands for foreign exchange.
The Forex market is the most lucrative worldwide, where you can increase your budget with innovative currency transactions. So, how can you get into the so-called “Forex adventure” and become an excellent trader? Let’s get started with the first.
Getting started with Forex – develop your trading system
To become an absolute Forex professional, you have to be familiar with the first steps. One of the essential elements is to develop your trading system and to stick to it. This is very crucial since you want to make a steady and secure profit.
Speaking of that, a trading plan is mandatory for keeping you in reasonable control over your trading and away from all of the impulsive decisions and destructive emotions. Your trading plan should consist of technical analysis depending on a current situation on the market and signals that will tell you when it’s the right time to make a trade.
It also needs to tell you what are your next steps in case you start losing money. Keep in mind that successful traders risk from 2% to 10% of their total account balance on any possible trade.
Make a balance between your work and life.
Many traders fall into a trap. They are constantly sitting in front of a computer, spending too much time looking at the charts. It happens because the Forex market is working 24 hours a day, and one can get easily addicted to occasional lucrative opportunities.
Although the Forex market is full of these opportunities, you cannot catch them all, which is perfectly fine. If you try to capture every opportunity that comes your way, you risk burnout and being tired of effective trading.
Establish your trading plan with the strict hours when you trade, and stick to it no matter what. In that way, you will avoid stressful situations and unnecessary burnouts.
Take profit levels and use a stop loss.
While developing your trading strategy, one more thing to keep in mind is to possess clear guidelines for closing individual trades. You must set the following plan:
What amount of profit is suitable enough for each position? What is the exact percentage loss, which is a point of no coming back?
Of course, keep in mind that there is no universally accepted and easy rule for taking profits and establishing stop losses, except for one. That is to set them before any trade. Avoid “wait and see” approaches and make sure to have fixed levels for closing your positions.
Don’t forget that you can choose to stop losing just a couple of pips above the nearest support. Afterwards, you should set your trade profit just a shade below the resistance that is the closest one.