How to become rich through forex
Think about that for a moment. If your only reason for trading is making money, then you may want to have another look at your chosen career. Without passion and a love for trading, no amount of money can make you a successful Forex trader. Duquesne Capital Management is famous for posting an average annual return of 30 percent without a losing year. He was back to square one.
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No Forex trader is without losses. Most starting out in the Forex market view a loss as a bad thing. And doing something wrong is bad. Unlike you, the market is always neutral. Thinking this way will only dig you a deeper hole. Losses can be a powerful way to learn. Just remember that even a trade that ends up as a loss can be the right decision. Next time you have a loss, take it as constructive feedback. Analyze the situation to see how you can improve the next time. Start seeing trading losses as business investments rather than upsetting events. Each loss is an investment in your trading business and ultimately your trading education.
Whether a trader is using raw price action or simply using it to identify key levels in the market , price action plays a major role in any strategy. It gives us some insight into the minds of other traders. Having some idea of where buy and sell orders are located in the market is critical to becoming the best Forex trader you can be. It can strengthen any trading strategy by providing areas to watch for potential entries as well as profit targets. Trading Forex without using some form of price action is like trying to drive a car with one eye closed.
So even if you are developing a strategy based on indicators , it would behoove you to learn about price action. If nothing else, it will provide a solid foundation from which you can design and develop other strategies. I see a lot of talk on the internet about the need for a trader to develop an edge and define it. So what exactly is a trading edge and why is it important? An edge is everything about the way you trade that can help put the odds in your favor.
It even includes your pre- and post-trading routine. How do you handle losses? What do you do when you win? These are all things that make up your trading edge.
Learn How to Become a Forex Trader
It was everything. It was their passing, shooting, dribbling, movement of the ball, set plays and everything in between that gave them an edge over other teams. Nor do you have to master all of them to start putting the odds in your favor. Instead, master one thing at a time.
So Who Are the World's Best Forex Traders?
For example, become an expert at identifying key levels. Then expand your skill set by learning how to determine trend strength. After that, set your focus on learning about pin bars. Those three things are all you need to witness a rise in your profit curve. Continue to expand your skill set in this manner and soon you will have a trading edge of your own. The key is to only tackle one or two factors at most at a time. Using a slow and steady approach will get you on the road to becoming a successful Forex trader in no time. This might apply to other ventures in life, but Forex is the exception.
This is different from studying hard. As a new trader to Forex, studying the market is highly recommended. The harder you try to learn those particular topics, the better. However, trying to make a trading strategy work will only lead to destructive behavior, such as emotional trading. Similarly, trying too hard to find trading opportunities is a good way to lose money on subpar setups. In fact, I wrote a post that features several of his books. When I first started trading Forex, I remember spending countless hours studying setups over the weekend.
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I would often come back to my trading desk multiple times on Saturdays and Sundays. Then on Monday, more often than not I would end up taking a completely different trade setup only to watch the original trade idea move in the intended direction without me. It happened because I was trying too hard. As soon as I stopped over-analyzing trade setups and trying to make them work, my profit curve started to rise. Now I spend maybe 20 to 30 minutes per day looking at my charts—the exception being the charts I post on this website , of course.
As counterintuitive as it may seem, learning to not try so hard was one of the things that completely changed my trading career for the better. Successful Forex traders have taken note of this, which is why they let the market do the heavy lifting for them. The concept of thinking in terms of money risked, as it applies to Forex trading, is no exception. Think about your last trade for a moment.
Can You Get Rich by Trading Forex - Forex Education
Did you define the exact dollar amount at risk before putting on the trade? Or were you more focused on the number of pips and the percentage of your account at risk? The convenience of Forex position size calculators has made it so that we never have to consider the dollar amount being risked. This convenience has caused a huge oversight. In it, I talk about the need to think in terms of money risked vs. This is because pips and percentages carry no emotional value.
So when you define your risk on a trade as a percentage only, it triggers the logical side of your brain and leaves the emotional side searching for more. The best Forex traders know this. Such a statement would contradict my own experience. What I am saying is that no successful Forex trader needs a win today to pay the electric bill tomorrow.
No trader can sustain that kind of pressure and become consistently profitable. That type of environment will only foster destructive emotions such as fear and greed.