Anyone can succeed trading Forex. Being a consistently profitable Forex trader is easy, but it is not completely free; some work and investment of time (especially in education) is absolutely necessary.
Following these 5 basic Forex psychology tips will prove to be crucial:
1. Be organized. Record every trade that you make. It does not matter if it's a profitable trade or not. Write it down anyway. Review the trades that you've made at the end of the day and at the end of the week as well.
When I trade, I take screen shots of my entries as well as detailed notes for myself and for my students. I note the reasons that lead me to enter the trades as well as anything that might be valuable to remember.
2. Never risk more than 5% of your account's balance. I risk 3% of my account's balance on any single trade, but up to 5% is acceptable.
For example, if you have $10,000 in your trading account than the most that you should risk on any single trade should not exceed $500.
3. Choose a complete Forex trading system and stick with it. I wish to emphasize that your chosen trading system should be:
- complete (entry, exit, s/l, t/p),
- all rules should be clearly written,
- you should definitely take some time to back test it.
Once you complete the following than you will know if your system is profitable over time, you know how many loses in a row are possible, you know exactly what to do every step of the way without losing your head in the process. In other words you cut many surprises along the way.
4. Occurring losses is a definite possibility in the Forex game. If you follow a back tested system than you even expect it from time to time. Never let emotions occupy your mind while trading, and never trade based on your emotions. Relax, stay cool and in charge of your emotions and actions.
Don't try to make up for losses immediately, think about your long term goals. Focus on your strategy.
5. Keep on learning and expanding you education. You will never make a better investment than investing in your education and knowledge. Read books and articles about Forex, attend seminars / webinars, take courses from time to time. Remember that Forex is your chosen profession, treat it like a profession and not a hobby.
I am an active and profitable Forex trader. I am also a personal Forex coach.
I have been trading the currency markets for over 16 years. The road to being 'successful' at what I do was not always an easy one but who said that obstacles are a 'bad' thing?
Today, I am doing what I always wanted to do and that is what counts. Besides trading for my-self, I also trade for others; however, what gives me the greatest satisfaction is coaching new traders and sometimes, traders with some experience that want to do better.
Being a trading coach is a responsibility that I gladly accept, watching students 'get it' is both a pleasure and a challenge that I enjoy very much.