Forex Trading

How To Become a Successful Forex Trader | Start Trading

Successful Forex Trader

As a trader you will buy and sell stocks and you’ll trade in the hope that your stocks will climb, allowing you to lock in quick profits. Many professional traders borrowed money to trade, hoping they’ll reap higher profits by trading with more money. The downside of borrowing money to trade, however, is you put yourself at great risk for huge losses – and they do happen.

Trading isn’t illegal or unethical, but it is extremely risky. Most investors trading on their own do not have the money, time, or patience to sustain the devastating losses that day trading can bring.

There are several things you need to know about day trading to mitigate your losses. First, you must be prepared to suffer severe financial losses. The vast majority of traders suffer severe financial losses in their first months of trading. Most don’t keep at it long enough to graduate to profit-making status. When you decide to pursue trading, you shouldn’t risk money you can’t afford to lose. The same advice is often given to gamblers.

Never trade with money you need for:

  • daily living expenses, and
  • retirement

Never use these things for trading capital:

  • money from you mortgage
  • student loan money, or
  • college savings money

When you start trading, you also need to realize that you aren’t investing in the stock market. That is not what a trader does under any circumstances. Your job will be to sit in front of a computer screen and look for a stock that is either moving up or down in value. You’re looking to ride the momentum of a stock and get out of it before it changes direction.

Even if you study a stock for hours, days, and weeks on end, you do not know for certain how it will move; you’re gambling by hoping it will move in one direction, and you are often risking money that it will go in the direction you want.

Remember that day trading is an extremely stressful and expensive full-time job. Traders employed by companies must watch the market continuously during the day and this is difficult and demanding enough. Even if you’re not working in an office – particularly if you’re not working in an office – you need to develop great concentration to watch dozens of ticker quotes and price fluctuations.  You need to be able to spot market trends by disseminating all of the information that’s there in front of you.

If you operate as a trader, whether you work in an office or at home, it’s important to recognize that you’ll have high expenses, particularly in your first few months. Whatever your situation, you’ll pay your firms large amounts in commissions as you start up.

You’ll probably also pay for training, and for computers.

Before learn to trade stocks, before you make your final decision about taking on this profession, you need to have a written statement detailing what your expenses will be and a plan for how long it is going to take you to break even.

Particularly if you’re trading on our own, avoid, if at all possible, borrowing money or buying stocks on margin. Borrowing money to trade in stocks is always ill-advised, although trading strategies demand the use of leverage to make profits. But bad planning leaves many traders in debt.

To avoid catastrophe, you should concentrate on understanding how margin works, how much time you’ll have to meet a margin call. Learn to trade Forex. Above all, don’t buy into the circulating myth that you can quickly profit from trading. Trading can bring sizeable profits; it does. But you have to work at becoming a successful trader.

Watch out for “hot tips” and “expert advice” from newsletters and trading websites. Your best bet is to stay away from websites claiming to offer hot tips and stock picks, most particularly when you are expected to pay a fee, which is most of the time. If you do come across a pick that you think is valid, be sure to meet your due diligence: check out the sources of information and ask point blank if they have been paid to make recommendations.

When it comes to dealing with losses psychologically, a few statistics might help you. It sounds fairly depressing, but an important part of making a profit from trading involves losses along the way. In fact, if you have even 50.5% winning trades, you’ll win in the long run. Your goal should be to increase your margin of wins but remember that 50% overall wins is perfectly respectable, particularly as you’re starting out.

In any trading system, you will experience losing trades as well as winning ones. The faster you realize this, the better. Psychologically, you need to be prepared to lose and give up on a particular stock if it isn’t going anywhere. This is truly the skill and essence of a successful Forex trader, particularly a good trader.

If you are having trouble on a particular day and you’re feeling your emotions headed out of control, adopt a tactic used by many poker players: get up from your desk and walk away. It might be a few minutes, it might be longer. Take a break if you are suffering losses; if you feel like breaking your disciplined habits.

If you are still having issues in trading or don’t know the basics of trading, you can join online trading academy to learn to trade online, where they offer online trading courses and start trading for beginners.

starttrading.com is the easiest place to start trading.

To summarize:

  • Never trade with money you can’t afford to lose.
  • Always have a plan of action for your trading.
  • Always follow your plan of action.
  • If the stock falls and you were expecting it to rise, drop it.
  • Don’t hold on to losing stock.
  • Even if your stock continues to rise, you should still sell in accordance with your plan.
  • Don’t hold on to winning stock longer than you planned; things can all too easily turn against you.
  • Set a limit for how much you can afford to lose in a day.
  • If you lose your limit, get up and walk away; stop trading.
  • Accept that you will lose money sometimes and be prepared.
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