My 10-Step Recipe for Success
Updated: Apr 18, 2020
Decide on the type of trading that you want to do. Is it intraday trading, swing trading or long-term position trading?
Prepare a Trade Plan (very important!). The plan has to incorporate the 3M's of mind, money & method. How much should you risk for a trade, when will you enter the trade, where should your stops be, what will you do if price goes against you, where would you want to take partial profits? All of these have to be decided before you enter a trade. If you don't have a plan, you will tend to follow price in a knee-jerk reaction, which is where most traders lose out.
Have realistic expectations.
Accept that you will have losing trades. The market is too big and too unpredictable. Trading is a business of probabilities, and your trading plan has to give to the extra edge. Even professionals usually have a win-loss ratio of 60-70%. Getting 5 winning trades out 10 trades taken, makes you a good trader.
Concentrate more on losses. Always consider the worst-case scenarios. Manage your losses, keep them contained. There will always be losses. When you accept that losses are inevitable, you have an edge. As they say "Take care of your losses and the profits will come".
Remember, making money in Forex is not difficult. It's making money consistently that's the task. Here, your personal discipline & patience come into play. You must have confidence in your system/plan & you must continue following it, even after a string of losses. It's only when you stick to one plan that you tend to make it perfect.
Under-capitalization in trading is a crime. Start your account with a reasonable amount of money, which would enable you to risk a small % of your account at any given time, and yet give you enough profits to grow the account.
Have a plan. If you don't have a plan, it simply means that you are gambling & not treating it as a business. Then you should take your chances in a casino, where you would still probably lose money, but at least you will have a good time.
Stick to your plan. If you have a plan & you stick to it, that alone puts you in the top 20% of traders.
Finally, it's never easy, especially when your money is on the line. It puts the emotions of fear & greed in the forefront, but it can be done. Many have done it & so can you!