Despite what many people think, Forex trading is more about skills, talent, practice, and patience, rather than blind luck. Sure, luck does play a role, but at the end of the day, successful traders know that you make your own luck.
In this article, we are going to take a closer look at the factors involved which makes successful Forex traders tick, and divulge some of their closely guarded secrets that you can use for yourself.
Choose the right strategy
Quite possibly the most important aspect of being a successful Forex trader is the strategy you use. It’s important that you choose a strategy which is a good fit for your personality.
For example, if you consider yourself someone who prefers to take a conservative approach, then choosing a high risk strategy is never going to be a good idea.
Find a good broker
Just about every successful Forex trader will tell you that finding a good broker is key. If you are new to trading Forex, then it’s certainly beneficial to spend some time researching the different brokers out there and opening some trial accounts so you can get a good feel for the various trading platforms.
Also, keep in mind that many brokers specialize in certain markets, so finding a company who align with your own strategy and ethos is recommended.
As an example, if you are a trader who focuses mainly on over-the-counter markets, and the broker you choose is geared more towards exchange-driven markets, then this is not a good fit, and you should consider looking elsewhere.
Funding your account
Once you have chosen a suitable broker, then it’s time to fund your account and starting trading the Forex markets. A huge mistake that many people make is using money they need for living expenses such as rent, food, and bills.
Never do this. Instead, only use money that you can afford to lose and keep all of your living expenses completely separate. At the end of the day, you don’t want to be end up on the street!
Know this: losses are part of trading. You can’t avoid it. However, what you can do is to limit your losses to the bare minimum by only ever risking a certain percentage of your total funds on any one trade.
Many successful Forex traders typically use around 2% of their funds, which means even if they were to hit a bad streak, they would still live to trade another day.