How to Become a Successful Forex Trader
Forex trading is accessible, exciting, educational and offers traders lots of opportunities. Despite all this, many traders fail to achieve good results in this market. In fact, over 80% of Forex traders are losing money.
This article will teach you how to become a successful Forex trader and show you the best trading practices for beginners. In fact, since you're reading this, you are already on the right path to becoming a successful Forex trader.
Below, you may find actionable advice for beginners and pros alike—three recommendation for each type of traders. Without further ado, let's dive right in.
Step 1: Never Procrastinate
This is a vital step in becoming a Forex trader. Successful people never put off until tomorrow something they can do today. This is even more important when trading Forex. You have to seize every opportunity to achieve your trading targets.
This is why you have to develop a habit of avoiding procrastination. The best way to do that is just keep at it. Even something so simple as demo trading can help you battle procrastination.
In fact, start right now by opening a demo account.
Step 2: Practice
Since we're on the topic of demo trading, there's a good phrase you probably have heard already—"Practice makes perfect". Some people even say it as "perfect practice makes perfect", which is also true.
With a demo account, you can practice to your heart's content. This is very helpful when you want to get the feel of the trading platform and get acquainted with its features.
If you're struggling, check out MetaTrader 4 manual or visit our FAQ section.
Step 3: Learn
Sounds simple, right? After all, everybody understands the importance of proper education.
The best way to learn is visit our Forex & CFD webinars and also examine trading terms so that educational materials are easier to understand. We at Admiral Markets provide numerous such materials, which you can find in the Forex education section.
There are no shortcuts to learning Forex, though. It takes time, effort and passion too.
Now that we've covered the basic information, let's take a look at the fundamental steps you need to become a professional Forex trader.
Pro Step 1: Develop a Trading Strategy
To become a currency trader, you need to have a clear vision. What we mean by that is a good idea of possible market moves and your relevant actions.
There are many trading strategies available. You may choose to become a scalper, a swing trader, or a positional trader. What's more important, however, is to develop a strategy that you feel comfortable using.
Developing such a strategy is a trial-and-error process that takes a lot of time and patience. You have understand what you are doing and why you are doing it. At this point, a demo account once again proves invalulable as it allows you to test your strategy with zero risks.
Just don't get discouraged by how much time it takes. Keep at it, and you'll definitely succeed.
Pro Step 2: Do Not Overtrade on a Demo Account
Many want to become Forex traders, but not everybody makes it. Generally, a professional Forex trader is a person who can trade for a living. The only way you can cover your expenses is by trading on a live account. Paper trading, or demo account trading, does not pay the bills.
For this reason, it is vital to switch to a live account trading as soon as you're ready. If you're going to use a demo account, you should ideally be aiming towards switching to a live account. Speaking of which, you can open a live account here.
It's hard to say when you should switch from demo account to live account trading. This process should not take less than one month. Make sure you have a good understanding of the market and the risks associated with Forex trading before you can trade live.
Also, keep in mind that you should switch to live account trading in a timely manner. We usually recommend not to postpone live trading for more than three months after you started trading on a demo account.
Pro Step 3: How to Be a Successful Trader in Forex
Finally, once you've established your trading strategy and switched to a live trading account, you move on to the next step—or steps, rather.
- Set stop-losses for every trade. Otherwise, failure is almost certain.
- Develop a trading plan and always adhere to it.
- Don't risk more than 2% of your margin per single trade.
- Keep your emotions separate from trading.
- Never trade to compensate for your losses.
- Only trade when you feel it's the right moment.
- Don't be afraid of losses, every trader has them.
- Try to achieve more profitable trades than losing ones.
This is the path to follow in order to become a good Forex trader. What you're looking at is years and years of hard work. You will be facing lots of losses and stress along the way, but don't give up. With effort and passion, you can make up for any bad thing you may experience.
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Final Thoughts
Being a Forex trader lets you work from nearly any place with an internet connection. We're talking hotel rooms, cafes, and—thanks to the latest technological developments—even distant corners of the world.
Forex traders are blessed with a strong growth potential, and their life style can certainly offer a lot of enjoyment. But if you've ever taken this path, you know this gift does not come easily.
The sooner you start, the faster you'll get there. So why not start trading now?
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