The most successful players in foreign exchange follow these five rules. Some rules apply to any market, but others only apply to currency trade.
Learn these critical habits with focus and patience, and you’ll get some essential skills for making money through currency trading.
Plan your trades
For each deal you make, you must have a well-thought-out plan. “Winging it” is not a way to achieve long-term success. Don’t even try because investing in foreign exchange is too risky for that.
Stay flexible with your gains and be ready to take less if that’s all you can get out of the market now. Also, if changes in the market are going in your favor, you should raise your earning goals.
Anticipate event outcomes
Like a good chess player, the best traders think several moves ahead. Think about what will happen and how the market has priced what you think will happen.
Just, think about what will happen if the event doesn’t match your standards and how you might feel about that.
Make trading plans based on the different possible results and be ready to use them. Then you are ahead of the rest of the market, which is still trying to figure out what happened and redraw its trend lines.
Don’t be rigid
Don’t let your feelings get attached to your roles. Making money is more important than being right or wrong. Be able to respond to new information and change your opinion if things change.
Take your time with the price moving against you to get out of your deal. The experts in forex trading are aware of new chances and act on them. Keep enough room on the edge for new positions.
Be ready to do tradng
The foreign exchange (FX) markets are open 24 hours a day, and their behavior can be random based on what’s going on anywhere in the world. We like it right because of this!
Be ready to know about upcoming data releases, speakers, the setting of central bank interest rates, big meetings of financial leaders (like the G7), and liquidity conditions.
You can also use rate alerts to look for opportunities when something unexpected happens.
Keep an eye on technology
Even if your strategy is built on something other than technical analysis, you should still know about important technical levels in the currency pairs you trade.
You should know the key Fibonacci reversal levels. You should know what technical levels mean as part of your overall trading plan.
Bottom line
What should your primary goal be as a Forex trader if you want to make money consistently? You should try to make money every month, but you shouldn’t be a good trader immediately.
Ultimately, most retail traders need more money to start trading accounts with enough money to trade for a job. Your primary goal in forex trading should be to keep a realistic and consistent trading mindset. If you can do these two things, you will be ahead of the other traders.
