According to the trading strategy, professionals wait patiently for the desired trade setup and check the conditions for the trading plan.
A setup can be a specific price model (for example, a price action pattern ), a combination of technical and fundamental analysis, or anything else. But the main thing is that the pro always knows what he is looking for and does not waste energy and money.
Professional traders have been developing their trading strategy for many years, by trial and error, and even created a strong sixth sense 🙂 We entered the zone.
They are confident in their trading strategy, and they do not doubt whether it works even if they are losing. If you are not 100% sure of your trading strategy, then be sure to study it additionally or, perhaps, find a new one.
Trade like a sniper
One cannot speak for all professional players on the exchange, but there is one common feature in their trading methods. They use a sniper approach, which means that you only need to trade when the correct trade setup is on the chart. Otherwise, the pros don’t waste bullets on less obvious targets.
Trading capital and risk management
The professionals have a cash and risk management plan. You don’t like losing money, do you? Do you understand why risk management ( money management ) is so important? Do you know the importance of having a risk and reward management strategy on every trade? Professionals understand these things, and they have a plan for managing their trading capital.
Consider the correlation of currency pairs.
A professional knows that when trading simultaneously on two instruments that are highly correlated with each other, for example, EURUSD and GBPUSD, you need to reduce the risk per trade to not lose more funds than is acceptable.
Professional traders have a keen awareness of market volatility (volatility). They understand that volatility (the number of points that the price will pass over a certain period) often changes, which means you need to change your trading approach to the market.
For example, in a market with low volatility, it makes sense to use a closer take profit and stop loss. When in a market with high volatility, you need to allow profits to grow.
The professional trader has built a trading plan on a solid foundation made up of these three main points:
- Trading psychology
- Trading method (strategy)
- Risk and trading capital management.
Without this, you will not be successful. If you haven’t taken the time to manage risk, you will still fail even with a trading strategy.
Professionals keep learning
Professionals learn from others who are more experienced than them.
Do not be afraid to admit that you do not know something and take ideas and methods from other traders who know more than you.
A sign of an intelligent and successful person is the desire to constantly acquire new knowledge.
A rich man knows that to keep earning, he must keep on learning. So, if you want to start making money trading Forex, never stop learning.
New to Forex trading? Don’t miss these beginner guides from FXCC.
– Learn Forex Trading step by step
– How to read Forex charts
– What is spread in Forex Trading?
– What is a Pip in Forex?
– Low Spread Forex Broker
– What is Forex Leverage
– Forex Deposit Methods
– What is Price Action in Forex?
– What is Scalping in Forex?