In the forex faq for this week, we have a question from one of our fellow traders.
My question is this. What is it about you that have made you succeed? It is not just the trading strategy but you. Can you shed some light on this please?
I must say that this is one good question that I am waiting for someone to ask. To become a successful trader, you need more than just reliable forex strategy to make it. This is exactly what I will be sharing with you guys here today in this post.
First of all, I must say that the key to successful trading lies in having a good and reliable forex strategy. Once you have that, you will need other factors to help you become a profitable trader.
1) Discipline – This is one of the most important factor to becoming a profitable trader. There is no point in having a reliable trading strategy but you do not follow it completely.
I know some new traders who are very eager to get into a trade and they enter a trade even when the setup is not according to their trading strategy. This is usually the reason why people fail to make money in trading.
They start to blame their strategy for not working without realizing that they are the cause of the problem. Their strategies actually help them to minimise their losses made in those trades that are not according to their trading plan.
These trader will think that their strategy don’t work and will start to look for new strategy to use. For me, I never ever enter any trade that is not according to my strategy and this is how I manage to trade for a living.
2) Risk Management – Irregardless of how reliable your strategy is, you will definitely lost money when trading as losing is simple part of the game.
When we talk about risk management, we are talking about the amount of money you are going to risk per trade. I know that there are some traders out there who do not trade with stop loss and this is one of the worst risk management to me.
The key to being successful in trading lies in your ability to trade another day and this can be done by protecting your capital with the help of a stop loss.
Besides placing your stop loss, you will also need to control the amount of money you are going to risk per trade. Never risk too much of your account in one trade as you may have consecutive losses that may wipe your account out.
3) Consistency – Once you have made consistent profit every month for 3 months. Please do not try to reinvent the wheel. You just have to stick to your trading plan by staying discipline and control your risk management.
I have know traders who are profitable for several months and started to be greedy and want to add more strategies to their trading plan. I am not saying that adding more strategies is bad but you should at least make 9 months to a year of profit from one strategy before you start to try out new strategy.
This will prevent you from getting distracted. Remember this; all new strategy must go through your demo account to make sure that it is workable before you start to trade live with it.
The above 3 factors are what makes me a profitable trader every month and I hope that you guys can stick to it and become a successful trader one day.
If you have anything to share with us, do feel free to give your comment below.