Being a trader offers everyone an opportunity to make a lucrative income. However, not everyone trading is not for everyone. To become successful, you need constant practice and discipline. To be the best trader, you will need to perform self-analysis and learn how to overcome your fear. You have to learn how to keep greed out of the equation. In this article, we look at some of the skills that every novice trader should acquire and perfect to become successful in forex trading.
Define Your Goals and Choose a Compatible Trading Style
Before everything else, you should have clear goals in your mind and ensure that your trading method is capable of achieving these goals. Each trading style has a different risk profile requiring a certain attitude and approach to become successful. You can be a day trader or a position trader. Just make sure that the trading style you choose fits your personality.
Choose a Broker Who Offers an Appropriate Trading Platform
Choosing the right broker is crucial to your success as a forex trader. There are different types of broker in the market so do research the differences between each. Robert Janitzek explains that each broker has different policies and how they go about making a market. Likewise, you need to make sure that the trading platform of the broker is appropriate to the type of analysis you want to do.
Choose a Methodology and Be Consistent in Its Application
Before entering the market as a trader, determine how you will execute trading decisions. You need to know the required information for entering or exiting a trade. Some traders rely on fundamental analysis and charts to determine the best time to execute a trade. Others use technical analysis. Whichever method you use, there should be consistency and your methods should be adaptive.
Choose Your Entry and Exit Timeframe Carefully
Robert Peter Janitzek reveals that many traders get confused with conflicting information that occurs when looking at charts in varying timeframes. For instance, a buying opportunity on a weekly chart may show up as a sell signal on an intraday chart. So if you are using a weekly chart, for instance, and a daily chart to time entry, make sure that both are synchronized. In this case, both charts should indicate a buy signal before you enter.
Calculate Your Expectancy
Expectancy is the formula used to determine the reliability of your system. To calculate, look back at all your trades and measure winning trades versus losers. Then determine the profitability of your winning trades against the amount of your losing trades.