Online and offline world is filled with hype about Forex. Every advertiser wants you to join Forex and bring your money to the market. Clearly brokers want you to start trading currencies because they make money on each of your transaction regardless if it is winning trade or loosing one. Also there is a tremendous amount of scam involved in Forex. These scammers are constantly looking for ways to take your hard earned money and give nothing in return.
So if you decided to become one of the Forex traders I can give you a few tips on haw to make the best of this opportunity.
1. Pick a reliable broker.
You will not believe how many scammers among brokers. Many of them are so called bucket shop firms. They place the orders in a bucket rather than transmitting it to the real market. This practice is based on fact that 95% of traders loose their money. So they pay the profit to the 5% winners and pocket the rest that people supposedly lost in the market. If you want to protect yourself from fraud, it is always a good idea to check if your broker is registered with the Commodity Futures Trading Commission (CFTC). In US broker should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) and a NFA member
2. Educate yourself.
If you decide to become a doctor you wouldn't start off performing a brain surgery would you? Yet so many people out there think that once they have an account open and they know some candlestick patterns and a few indicators they are ready to make a huge profit in the market. This is totally wrong attitude that will help you to empty your account before you even realize what happened. So get yourself a good training it may be free one or you may pay someone to get the training material. Internet is chock-full of free information on how to become consistently profitable trader. If you don't have time to sift through the information online then you may buy a paid training course, but do you due diligence first and buy a good one. Just to name a few: Peter Bain's and Rob Booker's courses are the good ones in my opinion.
3. Most importantly work on your belief system about trading.
In my opinion this is the most important factor that can make or break your trading career. If you believe you are making money in Forex by taking away from other traders you will have a hard time succeeding as a trader. I believe that by trading I am providing very important thing to the market, which is liquidity. The money I bring to the market is being invested into the economies of other countries worldwide. I get paid for taking the risk in those investments other people are not willing to take. I can assure you; once you have a belief like that deeply rooted into you consciousness it's unbelievably easier to become consistently profitable trader.
4. Work on your trading execution mindset.
This is the second most important thing after the belief system. The method I used to eliminate the emotional factor influencing my trading decision is simple. Pick a trading system the more mechanical it is the better. It should have a positive math expectation. Once you have the conditions of your system in the market you enter the trade. Once the price hits the stop-loss or take-profit level you are out of the trade. Now do not judge the outcome of any single trade. Wait until you executed at least 50 trades. At the end of this batch of trades see if it is profitable or not. If it is positive keep repeating those groups of 50 trades a few times. If not switch to another system that suits you best and have positive expectation. Once you run a few times this step I can guarantee you the emotions like greed, anger, agony and overexcitement will not interfere into your execution of a single trade. Most importantly you will find yourself consistently growing your account. It may be not a lot of growth but the keyword here is consistency. Becoming consistent is the hardest part I've ever accomplished in trading.
Albert Schmidt is a part time online currency trader. Do you want to know what system he has used to become a consistently successful trader? Read more about Forex opportunity system that he used. |
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