Top 6 Helpful Tips for Becoming A Successful Forex Trader
Thanks to the recession in economy, it is very hard if not impossible to create a business program that would actually prove to be profitable, not to mention that it takes a lot of hard work, discipline, patience and dedication to build your own business. Luckily, all hope is not lost. Have you heard of forex trading? A lot of people have lately been making truckloads of money through this money-making opportunity. If you have never been into forex trading in your life don’t worry. In this article I will tell you what you should and should not be doing as a forex trader.
Do’s:
a) Plan your business well; As they say, if you fail to plan, you plan to fail. You need to have a sound business strategy in place before you venture into the business of forex trading. One important tip I can offer you here is that you should make a sound business plan which contains details about your risk management strategies, money management strategies, trade management strategies, etc. Don’t ever leave anything to chance. Carefully review your business plan. Are there any loopholes which may land you in trouble in the future? You should also review this plan carefully at intervals to ensure that your business is on the right track. A sound business plan would also help you recognize the areas you are deficient at! I would suggest that you start out small initially and then gradually enlarge your business and expand upon your portfolio as time goes by.
b) Carry a small notebook: Remember that a successful forex trader is one who keeps a hawk’s eye on the market trends and then changes his business strategies accordingly. Be prepared to innovate each and every moment. Carry a little notebook or dairy and a pen with you all the time. If you notice any new and interesting trend in the market, write it down quickly. Review these notes a few days later to ensure that you can apply those tips to your business and that they have stood the test of time.
c) Enjoy your profits: So many forex traders get so much engrossed into the very process of money making that they rarely have the opportunity to enjoy all the profits they make! This might sound ironical but it is true. Don’t be one of them. If money is the main inspiration for you then you should enjoy money periodically to feel like a successful forex trader. Get a professional broker to withdraw your profits for you at regular intervals. Go to a spa, massage parlor, or a vacation, and enjoy the fruits of your labor!
Don’ts:
a) Don’t spend more than you can afford to lose: At the very beginning you should be very cautious about the amount of investment you put into forex trading. As people become a little bit successful then they become greedier and put all their life savings into this one business in the hopes of generating tremendous amounts of profits and becoming a Richie Rich overnight. However, it is very risky. Like any other market, forex trading market has its ups and downs. I would suggest not putting all your eggs in one basket. Don’t invest every penny you have in forex trading, not even when you feel you have become an expert forex trader. Remember that money management is not only recommended, it is actually the most important and crucial part of staying in business for a long time.
b) Don’t neglect your gut instincts: What does your gut instinct say? Are you mentally ready to become an active forex trader, or would you rather do it occasionally? You need to make this decision rather early in business. Once you make this decision you should be able to make a plan about how to approach this business. Unless you know yourself and your mindset first, you won’t be able to become a successful forex trader. You also need to decide if you are in it for short term gains or are prepared for going through a long haul. If you are in it for long term profits, you need to get your fundamentals straight; learn about money and its shortly, the role of world reserve currency in the international monetary system, the role of gold in the international monetary system , the roles of World bank, IMF, etc. For traders who want shirt term profits, they should be proficient in analyzing the market from a technical standpoint.
c) Don’t forget the risks: If you are not comfortable with taking risks, then forex trading is not for you. You need to understand that just like all other business opportunities out there, forex trading comes with plenty of risks. You need to be good at risk management and be willing to suffer losses in this game in order to be a good forex trader. Believe it or not a lot of forex traders, even the experts out there, suffer big losses. Also, it is not necessary to follow the crowd all the time. If your fellow forex traders are investing in something that you know would result in losses, invest in something different. Don’t get carried away by what others tell you because remember, no one would know about your well-being better than you would. Just because your buddy is taking big risks does not mean you have to! Pace yourself well, learn your limits and learn to put brakes on yourself when your gut instincts tell you to. Remember that forex traders who indulge in fast-paced trading also frequently suffer from big losses; unless you are ready for that, don’t put yourself in their shoes.
As you can well understand, being a forex trader is not too hard as long as you are of sound mind that is. The lure of money can make people do crazy things which their better judgment would never allow them to do, but remember that crazy people don’t make good businessmen. A forex trader who is in it for long term gains would have to start right from ground zero, plan wisely, understand the risks, start out small, and learn not to bite off more than he can chew. Lastly, enjoying the rewards you get from your business is equally as important as generating those rewards!