The foreign exchange market is a real marketplace, where buyers and sellers from all corners of the world meet to participate in trillions of dollars of exchange every day.
According to information available at our desk, over 5 trillion USD worth of currencies is traded on the forex market every day.
The demand and excitement around forex trading continue to fuel its popularity around the globe.
Even though the forex market offers exciting opportunities to make huge profits and high returns from investments, it is not a straightforward endeavour.
It is estimated that about 90 to 95 percent of FX retail traders do not succeed in the industry.
So what sets apart the 5 or 10 percent of FX retail traders who succeed in the FX market?
Set Realistic Expectations
The problem arises when new traders become so mindful of chasing profits that they forget to lay down realistic expectations.
The obsession of making quick money and chasing high returns usually comes along with anxiety that leads many to make mistakes that cause losses.
The first rule to becoming a trader is to set realistic goals and objectives. Potential traders should forget the prospect of making money in FX with just a few quick trades.
Functioning in an overconfident and risky manner can lead you to lose your initial capital investment.
If you are just getting started, do not set high profile objectives that are going to pile enormous emotional pressure on you.
One of the biggest mistakes many people do when getting started is falling into the temptation of overtrading and excessive actions.
It will be best to focus on a single thought that will earn you money rather than stressing about high returns.
Before you start trading, it is essential to recognize the value of proper preparation.
If you perform your market analysis regularly, manage the risks, and have a detailed trading plan, you are halfway to the prize.
What people need to know and understand is that there is no right or wrong way to trade, what distinguishes people is how they define their strategy in different situations.
It is common to see one trading strategy working well for a currency pair in a specific market condition while another approach works for the same currency pair in a different market.
To achieve successful forex trading, you might want to focus on harmonizing your risk profile with your online trading strategy.
Get a Hold of your Emotions
This might sound easy and simple, but it is probably one of the significant inhibitors of success among new traders.
Some traders try to view the FX market as a gambling arena where they can try their luck to beat the market.
However, when they start losing their investments and profits, they are overwhelmed with disappointment and curse the industry.
FX is not a gamble, and you should never treat it as one. FX trading is a financial activity that comprises a mix of analysis and discipline.
Define your Stop Loss and Take Profit
No matter what currency pair you are trading, you should always set a stop loss. Setting a stop loss allows traders to control the closing price of a trade even in their absence.
This type of order will give you the peace of mind and will ensure you do not lose more money than the limit you have defined.
Keep Up with the News and the Markets
Staying up-to-date with the news and the market is very important. Many market movements are influenced by political events, news, predictions, and central bank announcements.
Choose a Credible Forex Broker
An FX broker will play an essential role in your trading activities, as they provide the platform that allows you to execute your plans and trades.
Do not settle for anything less than a transparent and trustworthy FX broker, who demonstrates a high level of security.
Risk Management Plan
Have a well thought out risk management plan that will prepare you to handle losses if they come.