In today forex faq, we have a question from one of our fellow traders.
Below is the question:
Just want to know how can someone become a profitable trader.
I must say that this is one question that alot of you must have in your mind. In fact, this is one question that I asked when I am new to trading.
Therefore I will like to take this opportunity to share with you what I have discover through these years of trading and I hope that it is enough to answer this question.
Below are what I think made me a profitable trader and will also be able to make you into a profitable trader if you can stick to it.
1) Have a Working Strategy
This is a very important factor as there is no way a trader can make money without a reliable strategy to follow.
For those of you who have yet to find a good strategy to use, you can consider Forex Street Uni where I show you how I trade so that you can also do it with the same strategy.
2) Discipline To Stick to your Strategy
This is the second most important factors to becoming a profitable trader. There is no point for you to have a good and working strategy if you do not stick to it.
You may be wondering why will anyone not stick to a strategy that works. THE URGE TO TRADE is the number one reason why a trader will not stick to his/her strategy.
Most traders find themselves always wanting to get into action which is entering a trade and therefore tends to enter trades that are not 100% according to their strategy.
For any strategy, there must be a set of rules for entry and for those traders who likes to get into action. They will tend to tell themselves that the trade looks like what the strategy wants. But it only fulfil 80% of the rule.
For a profitable trader, they will not enter a trade if it is not 100% like their trading plan and this is DISCIPLINE.
3) Practice Good Money Management Skills
Once you can overcome the first 2 factors that I have stated above, you are already half way to becoming a profitable trader.
The last factor will be proper money management. By money management, I am referring to the amount of risk you are taking per trade and how you should protect your capital while trading.
You should not risk too much of your capital per trade. The highest I have ever heard of is 9% for a professional trader. Therefore I will urge you to stick to 2 to 3 % if you are pretty new to your strategy. When you have a better record on how your strategy works, you can then increase it to around 5 to 7%.
As for how to protect your capital, this is done by partial exit of trades or by adjusting your stop loss to breakeven when the price has moved certain pips in your favor. In this way, your account exposure will reduce and therefore your capital is being preserved.
The above are simple what made me a profitable trader and it will also be able to make you into one.