7 Advanced And Decisive Steps To Make You A Successful Forex Trader in 2020

                                                         

forex-market

                        

In my previous post 'Simple Forex Trading Strategy For Beginners' I mentioned a few points that traders specially beginners must know before entering forex market.

In this article, a few advanced points have been discussed that will benefit the traders a long way to attain success in forex market.

In fact, following a trading checklist helps traders to stick to a specific trading plan and it makes the traders safer and builds confidence among them. 

A trading plan and a trading checklist are different. The trading plan involves the entire market and its analytical approach a trader calculates. Whereas 'A trading Checklist' deals with each individual trade and the conditions that must be followed before entering a trade.

Trading Checklist

1) Level of Support & Resistance

Support means a price level is expected to pause or halt due to concentration of new demand from a lot of traders. As price goes down new demand for the securities or currency goes up thus forming a level of support which stops further downfall.

Thus, if an intelligent trader can identify the crucial level of support of a currency then it provides the trader valuable of information about accurate entry and exit point of a trade. 

Generally, we expect the level of support/resistance will not be broken. But if it is broken under extraordinary circumstances, then the specific trade can be closed at a minor loss.

2) A Trading Plan

A trader who enters the market with a well defined, simple and understandable trading plan is an organised trader.

Trading plan has been discussed in our previous articles, which I am sure will help you reduce risk from sudden unexpected shifts in the market. 

Many beginners develop negative habits like overtrading. Once a trader gets lucky by chances he/she shows no indication of halting further trade and continues trading till all the profit vanishes and turns into a loss.

This is done because the trader is not a disciplined one and he/she has not specific trading plan.

So, developing and following a right trading plan is absolutely essential.

3) Be Always Prepared To Face Loss

As has been discussed earlier, forex market including stock market is a highly volatile and risky area of trading. 

So investing a very little amount of money is absolutely necessary. Always be ready to lose your invested funds any time.

This article is not aimed at discouraging you to enter the market and always keep away but making you 100 per cent secured and informed about the risk involved.

Always invest that much amount of money, losing which won't make any difference to your future security.

Because loss is normal affair in this market. A lot of successful traders admitted that in their cases less than 40% or even less were profitable.

Still they made money because their amount of profits always surpassed losses as they were disciplined traders.

It requires a lot of strength to control one's own emotions and greed.


4) Stop Loss & Make Profit

A stop loss saves a trader from suffering huge loss when the calculation goes the wrong way. Whatever be the your strategy or trading plan a trader must not forget to set a 'stop loss' for each and every trade.

The 'stop loss' will act automatically when the price goes against your anticipation and hits the 'stop loss' level.

One can also set a 'take profit' target. This pre-determined target automatically closes the trade when the price reaches the set level making the trader earn reasonable profit.


5) Never Go Against The Market

There is a proverb 'when in Rome behave like a Roman'. This is also true in any financial market either forex or stock market.

When the trend of the market is very positive and it's going up due to news, political news or central bank announcements, never think of making your position short.

This is called fundamental trading. If your trade is based on 'chart analysis' and you are a technical trader, never neglect paying attention to the fundamentals as they are a key factor to the movement of the market.

The fundamental news are always strong enough to make all calculation wrong. Therefore, always match your analysis with the fundamentals of the market.


6) Avoid Overtrading, Be Satisfied With Little

As has been said earlier, trading too much is a negative behavior. This is specially common to newbies. It makes you lose your already earned profit and puts you in a negative position.

So, when you have already made a reasonable profit for the day, never think of making further trades out of greed. 

Controlling greed and emotions are a key factor to become a successful trader.


7) Always Be Careful In Choosing Your Broker

A forex broker can make a lot of difference to whether you become a successful trader or a total failure.

Never choose a forex broker if you are doubtful about his reputation and stability in the market. This single mistake can cause you suffer extreme losses.

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