As is the case with most of the businesses, the percentages of people who make it big in forex trading are pretty small. The famous 80:20 rule applies here too and only 20% are able to make significant amount of money in the forex market. Many who fall by the wayside often complain that making money in forex business is all about good luck and good fortune. This is not at all true because at the end of the day forex market is all about supply and demand theory and those who are able to master it are the ones who can make money out of it. They should as traders know when to buy, when to sell and when to enter and exit.
This does not require any extraordinary skills but it is all about being patient and learning the tricks of the trade. There is nothing such as luck or good fortune involved in forex trading. The best way forward would be to take lessons for professional and successful forex traders. We will over the next few lines try and find out a few tips which could help in becoming successful as a forex trader.
The Right Approach
Whenever we spend time with some quality brokerage houses and service providers like CMC Markets they will talk about having the right approach to forex trading. It is not a gambling or betting as most of us think it to be. It calls for the right preparation. It is important to align the personal goal and the temperament and see that they are in sync with the markets and instruments. You could be strong in certain core areas. If for example if retailing or trading in a particular currency is your strength you must have an approach which should try to build on this strength.
Attitude Is Vital
You mindset has an important role to play as far as your success or otherwise in forex trading is concerned. Attitude brings with lot of good factors including patience. Patience is the name of the game as far as forex trading is concerned. Once you know the die has been cast and once you are fully aware of the system, you would not mind playing the waiting game. If your system talks about entry at a particular level but if you find that the market has not reached it, you must learn to move to the next opportunity. You must always remember that there is always another trading opportunity available. Chasing the bus after it has left is not exactly patience in the right sense of the term.
When one has the right attitude, automatically other things like discipline and objectivity also fall in place. Discipline teaches a trader to be patient and also be objective in his or her decision making. Discipline also helps you to pull the trigger when the moment is opportune. It could come in very handy whenever there is a need to stop losses. Being in a state of indiscipline could lead to over trading or not exiting the market when you should.
Mastering The Art Of Discrimination
It is also important to discriminate between different trades taking into account the major players and find out as to why you are planning to trade in that particular currency. You must master the art of picking up a few currencies commodities, and stocks and learn to chart them in different time frames. You must then apply your experience and methodology to all the time frames and come out with a particular currency which is line with your system. This is what personality math all about and you have to be good at repeating this exercise over and over again.
Finally you must understand the ways and means by which you can implement your plans successfully. You must realize that there is nothing such as 100% success and even a profitable and proven system will end up having 65% success rate, but the 35% failure rate will always be there. With the best of risk control, strategic investment and having the knowledge to enter and exit the right time, you can make money. It is a process of trial and error and you must know how to make the best of a bad situation.