Learn To Trade Forex Successfully: The 4 Parts You Need To Master!
Trading is said to be simple but far from easy. It took me around 3 years to make consistent profits and learn to trade Forex successfully – without losing the profits I made.
Fortunately, the most serious traders end up finding a way to trade successfully. According to the National Futures Association, the average trader gives up after 4 months of trials.
Something is wrong with the way people go learn to trade Forex successfully. You can't focus on trade setups and expect that – this alone – will make you rich!
A Forex trader that isn't profitable is that way for ONE main reason: that trader hasn't put in place the parts in this article. Those are the essentials for any trader wanting to learn to trade Forex successfully.
Here are the parts to master to learn to trade Forex successfully:
1. Build Solid Trading Strategy And Set Your Rules
It took me a long time to put together a trading plan but it is crucial. It should answer the following questions:
- Why do I want to trade and/or make money trading?
- What is my signal?
- Where do I enter?
- Where will I cut my loss?
- Where will I take profit? (it's better to have several T/P in my opinion)
- What amount will I risk? (should be a fixed % or $ number)
- What maximum drawdown will I allow myself to get weekly/monthly? (the point at which you'll stop trading)
- What timeframe do I trade?
- When do I trade?
2. Build Up Your Confidence
There's only one way to build up your confidence in yourself and your strategy.
It is practice. Actually, live practice and backtesting to see what the true probabilities of your trading strategies are.
If you want to save time, I recommend you backtest. Either use a backtesting software or any trading platform and track the trades you would have taken with your strategy.
When you backtest, make an effort to find the losers. This means it's better to take more losing trades that you would in real life. Don't take the trades that do not correspond to your strategy though.
When you've done your backtesting, evaluate whether you have a positive return.
Also, see what was your longest losing streak. That way you'll be less depressed if it ever happens again (it will at some point).
3. Get The Proper Structure You Need To Trade Live
Most people never do step 1 and 2. Among those who do step 1 and 2, a lot of people screw up when they get to live Forex trading.
But why is that?
Traders forget to put in place the routines necessary to trade live…
A lot of people, including the best traders I've trained, see themselves as free when they trade. They feel too restricted by having structure. Hence why they try to avoid structure, which is an essential part of successful trading!
Here's what you need:
- A trading journal in which you put screenshots of your trades and comments
- A set of routine (written down) that you execute every single day when you trade. It should include when you trade, what you look for, etc.
- Get in the right mental/physical state to trade. Trading is hard when you spend too much time looking at the live market. Make sure you get what you need (off time) to recharge.
- Support from other traders: this is very important because talking with other traders can boost your motivation and keep you accountable. I saw a huge difference when I surrounded myself with traders. I created a Facebook for traders. You can join here: Desire To Trade – Forex Trader Community.
4. Understand Trading Psychology
This is the easy part because it mainly consists of reading. However, you'll definitely get some breakthrough ideas or ah ah moments like I did.
Check out the books highlighted in The Forex Trading Books That Incredibly Improved My Own Trading.
The main ideas:
- You can't know in advance what will be the outcome of your trade. A trade, whatever the setup looks like, has 50% chances of being a loser.
- Don't focus on profit, focus on exerting your trading strategy. “The key is making one good trade, one good trade, and then one good trade”.
- Every trader has a different way of doing things, don't get in the circle of switching your trading strategy once you've made your trading plan.
- Backtest everything
I think that sums it all. It is what I did to become a CPT (consistently profitable trader). I sincerely hope it can help you learn to trade Forex successfully. If I can help you in any way just let me know!