Forex market is the largest financial market in the world. Previously trading the forex market was limited to the large bank and institutions. Thanks to advanced technology which has made forex accessible to every single individual. There are many brokers who are offering 1:1000 leverage to trade the financial market. Trading with high leverage can be very tricky since it requires delicate lot size calculation and proper risk management skills. Before you start your trading career make sure you have all the “key ingredient” for becoming a successful trader.
Three Key ingredients for a successful trading career
The balance between technical, fundamental analysis and psychology: There are many traders who has mastered the technical analysis and fundamental section in the forex industry. To be a true professional forex trader, one must know both technical and fundamental analysis. A sound knowledge of technical and fundamental analysis helps to identify the potential trade setup with great level of accuracy. Strong psychology is very critical to trade the forex market successfully. Without strong psychology both technical analysis and fundamental analysis is incomplete. Strong determination and trading discipline helps the trader to execute their “high-quality trade” in the financial market.
Comfortable trading strategy: Thousands of websites are now offering the valid trading strategy for the traders. The strategies might be extremely good but it doesn’t mean that this will work you. “Strategies are not being sold or taught rather they are being developed.” Trading strategies vary from person to person. Mr X can be successfully trading the market with moving average strategy but that doesn’t necessarily mean you will be making money from that strategy. All the professional traders have developed their own trading strategy by back testing and researching the market data. Developing valid trading strategy requires years of experience and practice. It’s imperative that you feel 100% comfortable by trading your strategy or else you will lose one key ingredient (Stable Psychology) of becoming a successful trade.
Money management and goal oriented: This is one of the most vital element that every single successful trader follow strictly. A professional trader always risks only a certain portion of their account equity while taking a trade. They also make sure that every single trade they execute has a minimum risk-reward ratio of 1:2. “Professional traders always embrace loss as they do with the profit.” They consider the loss, as business expenditure. Experienced professional have a preset goal for a year or month based on their trading style and personality. A professional trader also has preplanned route in mind to achieve their goal under any odd circumstances. They have the unique way to manage their account fund so that, even if they lose more in the forex market yet they will be able to make a profit from this financial market. Losing three trades in a row and winning one with 1:5 risk reward ratio is the classic example of proper money management. So before starting your trading career as a professional make sure you have a solid fund management plan.