You probably came here because you have an interest in investing, trading, and the financial markets. If that’s the case, then what better way is there than being able to work doing what you love, from any place in the world and at any time of day?
Although it is by no means an easy way to get rich quick, forex trading could offer you the opportunity to follow your passion and trade a massive financial market with a daily turnover in excess of 5 trillion US dollars. The opportunities in this market are massive. All you need to do is to learn how to take advantage of them.
Before you throw yourself into this game though, it’s important that you really know what you are doing. Make an effort to learn from the best in the business, and avoid spending time with only other beginners in the market.
Learning from experienced traders will dramatically cut down on the time it will take you to master the art of trading. At Learn to Trade, we offer forex trading workshops and courses regularly in many locations around the world, and we would be delighted to see you at one of them!
So, let’s start by revealing the 5 secrets that we believe you need to know in order to master the $5 trillion market known as the forex market:
- Keep a detailed journal of all your trades
This is an essential step that professionals are fully aware of, but many beginners don’t pay enough attention to. It is often said that it is necessary to treat your trading as a business, and there is indeed a lot of truth to this. The importance of staying organised, following a plan, and documenting everything cannot be overstated, and as you grow as a trader, you will understand why.
- Pay attention to the news
Some people will tell you that this is not necessary, and even that it is something you should not do as a trader, particularly if you trade using technical analysis. Still, it is a fact that most professional traders do follow fundamental news to some extent, and that the combination of technical and fundamental analysis can be extremely powerful. And even if you are a trader who trade purely based on technical analysis, you still need to follow the news to know when it is best to stay away from the market.
- Have a plan
As we mentioned above, you should treat your trading as a business. And as you know, every business leader has a plan for his or her business. You also need to have a plan for each and every trade you enter into. Your plan should be written down in a standardised format so you make sure you’re not forgetting anything the next time you write your trading plan. Following this step hugely improves your chances of success in forex trading (and probably in many other areas of life as well).
- Choose a strategy, and stick with it
Strategy hunting is a bad habit many new traders just can’t stop with. I’m going to tell you right here and now that this is something you need to stop doing, as it seriously harms your trading performance. If you never stick with a strategy over more than a few losing trades, how can you ever improve your execution or adapt the strategy to your own trading style? Chances are there is nothing wrong with your trading strategy, but rather your implementation of it. Go over your trading journal and think critically about how you execute your trades. Is there any room for improvement or optimisation?
- Reward yourself
This step is in fact just as important as the ones mentioned above. In case you haven’t heard about it before, there is a concept in trading often called emotional capital, and you need to watch out for it just as you watch out for your trading capital. If you run out of emotional capital, you will fail as a trader, no matter how much trading capital is left in your account. Therefore, reward yourself every once in a while when you did well. Your continued passion and motivation is all-important for you to have a chance to succeed at the $5 trillion a day game that is forex trading.