Large number of people will think that success in Forex trading depends entirely on the system or trading strategy you use. However, the truth is that it does not. The foundation upon which true success as a trader is built is your mindset and psychology is that how you think and feel about the market and how you react to it.
All Forex websites try to sell some indicator or robot-based trading system, which will not tell you this, because they want you to believe in their products and that you can make money with them. That is the source of most of the stories you hear about people who attempt Forex trading and lose money. Many people come into the market with unrealistic expectations, such as thinking they are going to quit their jobs after a month of trading or thinking they are going to turn $1,000 into $100,000 in a few months. You create a mindset that pressures them with the need to make money and end up trading emotionally – the fastest way to LOSE your money.
Suppose I have a friend that says, “I am not here to be your friend. Now the friend will tell you what you want to hear. I am here to be your BEST friend, someone who will tell you what you NEED to hear.” But it is very important to have an effective and uncomplicated trading strategy, it is even more important to manage your emotions around your trades. Trader needs both to experience long-term success in trading.
Even when you think about trading and risking your hard earned money, before we even start discussing strategy, if you feel you want to explore trading as a means of growing your income and wealth portfolio, you need to enter the market with the right mindset.
Be Disciplined
This is the first thing you need to understand is that trading is a discipline. This is a long-term game of probabilities, you will win some trades, you will lose on some trades, but as long as you a disciplined enough to stick to your trading strategy, to not be emotionally attached to your losses, or worse your wins, you will tend to make more winning trades than losing trades and net a profit.
Be a Master
Every trader must know what your trading strategy is and you need to master it. One has to know it inside and out and have absolutely no doubts or questions about that the market needs to look like before you risk your money in a trade. One has to become a “sniper.” When the market conditions match your strategy criteria, you place your trade, without the fear holding you back.
Risk Management is Important
Always manage your risk on every single trade. Your control over your trades is through the moment you loosen, you allow emotion to creep in and before you know it, you are in a downward spiral of emotional Forex trading and losing trades. The only risk is that money you are prepared to lose in every trade. Actually, you should go in expecting to lose on any given trade so that you are constantly aware of the very real possibility of it happening.
Make Proper Plan
One must be very organized. You must have a trading plan and journal to track your trades consistently. You can think of Forex trading as a business rather than placing a bet in a casino. You must invest with your calculator and not your heart, stay calm in your dealings with the market.