You may think that it is enough a winning trading system to be successful in forex. A good system is certainly useful but alone does not lead to good results. To achieve good profits, you must follow the rules of your strategy with discipline and perseverance. Not everyone is able to work with discipline, because often you need to change your habits.
You are used to think that a loss is a bad thing. In the forex market, losing is part of the game. The loss of someone is the payout of someone else.
Do not be swayed by the opinions of other people. You have to develop your own system, based on your experience.
You must learn to feel the market. Certainly it is useful to be part of a network of investors, who share ideas and strategies. In the end, however, you have to make your own decisions alone. Focus on your opinions. You can compare different approaches to the same situation, but in the end you are solely responsible for your investment.
The market is constantly moving. It has no fixed rules. The only certainty on which you can rely is your trading system.
Unlike other sectors, in the forex what matters is the efficiency of your work and not the amount of working hours.
It is not easy to follow the trend of the market. Many traders do not have enough discipline to wait the best trend.
It often happens that, for fear of losing money, you exit the market too early and thus you reduce your profits.
Instead, it is important to control your emotions and follow your trading plan with discipline.
There are some rules that should always be followed. First of all you need to have a clear goal. Without a precise objective, your energies are dispersed and it becomes difficult to get good results.
Many traders start their business with the sole purpose of making money as soon as possible. However, the goals must be realistic. Your rules should be measured in terms of potential outcomes and available resources. This doesn't mean that you must not to be ambitious, but you don't expect to become a millionaire if you invest a capital of only 10,000 Dollars.
The only result is that you get a great frustration.
You can adopt a trading strategy already defined, or develop a personal strategy. In both cases you will need to carefully follow its rules. A correct strategy includes all the necessary steps, when to enter the market, when to exit the market, etc.
You have to trust in your system and know all its details. The rules should be simple and clear. The impulsive trading, without a plan, only leads to negative results. A good system should contain a solution for every situation that you may encounter during your trading activities. If all the possible circumstances that may occur are not anticipated and planned, an unexpected event could cause you a huge loss.
We recall some basic rules.
Identify the main trend and its intermediate cycles, to minimize the risk of loss. Follow the trend, because it is your friend. If you are against the trend, you have to be very careful. The price might move against you, without giving you the opportunity to recover the loss in the long term.
Try to get the best price when you buy and when you sell. Never sell at a support level. Never buy into a resistance point.
Keep in control your emotions and the fear of failure, when you are following a winning trade. Learn to wait until the trade reaches its full potential. Conversely, if a trade proves to be wrong, do not hesitate to close it.
The currency market is constantly changing. It may happen that your system has been good in the past but, as a result of a sudden change in the behavior of the market, it is necessary to revise your rules. Update immediately your rules according to the new trends. Make sure you have a variety of strategies that can be used in various market conditions.
Get yourself a second power supply and an additional internet connection, to cope with a sudden power failure or technical problems using an internet provider.
Learn to be patient. There are times when the best approach is to wait until the market trend changes for the better.
Do not risk more than 10 percent of your total equity and not more than 2 percent on a single operation. In this way, if you do not succeed, you have left sufficient capital to equalize your losses.
Do not invest when the markets open and close. Review periodically the results of the past and update your trading plan if necessary.
If you experience a significant loss, take a break. Stop yourself for a few days. Try to understand the reasons that have caused this loss, check your rules and your trading plan. Restart your trading activity with a refreshed mind.
The open positions must be proportionate to the available capital. If you go beyond the percentage of risk, you can increase your profits. The high leverage and the small margin required by some brokers allow you to do this. However, in this way, losses can become unimaginable.
Learn to draw trend lines, analyze the past behavior of the market and current trends.
The overconfidence can be very dangerous. You could lose in a few hours what you have earned in many days of hard work.
Always follow the rules with strict discipline.