The first step to being a successful Forex trader is gathering as much information as you possibly can. The basics you acquired through training will get you on the right track, but they are not enough since they are just pieces of a larger puzzle. So, before you commence trading, you need to learn about the 6 uncommon tips that will help you succeed as a Forex trader.
1. Take Regular Breaks from Trading to Re-Evaluate Your Strategy
Numerous aspects could make you lose money in Forex trading. You, therefore, need to consider taking some time away from everything related to trading to get rebalanced. Remember that the market will still be there when you come back in a couple of days or weeks when you resume trading, so use this time to evaluate and learn from your past errors. Some of the areas you could assess include your risk profile, trading time frame and time zone, and your preferred trading approach, which could be long-term, short-term, or scalping.
2. Meditation
Stress and emotional mismanagement are two of the two aspects that will work against your success as a trader. Since they are inevitable in life, the way you deal with them is what matters most. Another area that many traders perform dismally is that of self-control as there are innumerable incidents of over trading or impulsive trading. Meditation is one of the useful techniques that will allow you to take control of every situation the market throws at you. Some of the inherent benefits of meditation for a Forex trader include:
- Build mental health
- Prevent cognitive decline
- Positively alter the mental structure of the brain
- Heighten mental awareness and brain activity
- Alter genes for the better
- Increase happy feelings and reduce negative emotions
Top traders now take meditation to be the necessary medication when faced with the ups and downs that are inherent in their day to day activities.
3. Attend Meetups or Join Communities of Traders Better than You
It is widely known that going alone allows you to go fast, but if you wish to go far you need to go with others. Well, that applies to Forex trading too. Meetups and communities present you with the chance to meet and interact with successful traders. It is here that you will share experiences and gain knowledge about profitable trading techniques, risk management, improving trading skills, and the best tools of trading to improve your odds. Also, you will get to socialize with your peers.
4. Identify Which Instruments You Trade 80-90% of the Time
Even with limited experience, you will have identified that some instruments trade much more orderly than their alternatives. The truth is that you can rarely get a winning system with erratic trading instruments. So, the best approach is to test out several instruments for the purpose of identifying those you will use in your trading system 80 to 90 percent of the time. There exists an array of ways to predict the direction that Forex markets will take, and several complex software programs to aid in that task. You, therefore, need to select a few and stick to them.
5. Find the Most Affordable Broker for Trading Those Instruments
As an intermediary trader, it pays to find a broker that offers the most competitive spreads and commissions because you need to keep as much of your earnings as possible. A look at Forex broker reviews online will help you identify some players that you can choose for these purposes. Check also for the minimum amount required to open a trading account to make sure it is within your means. It makes sense to understand the broker’s service levels and commission structure because you will encounter the fixed and variable spreads, and commission charges that depend on the percentage of the spread. The term spread refers to the difference between the buying and selling prices and is usually computed in pips.
6. Invest in the Best Computer/Hardware to Trade with to Reduce Latency and Slow Loading Speed
The difference between the time you trigger a command and taking that command into action is what computer experts call latency. In Forex trading, it is the time taken to receive a response from the broker’s server to the request of the trader. If latency is high, you risk losing cash; a lot of it. Slow loading speeds of a computer, especially the internet are not profitable either because you need fast execution. Some of the possible difficulties include increased numbers of re-quotes, executed delayed orders, and failure to take note of the updated currency rates. Remember that the market will not wait for you, so you need to invest in some proper computer hardware and accessories if you wish to make it in Forex trading. The important features to include in your hardware include a super-fast processor (i7), 8-16 GB of RAM, multiple display monitors, and several years of manufacturer warranty.
The Bottom Line
Rushing to trade in the Forex market will certainly do you no good. With the necessary knowledge, on the other hand, you will be set to make the most of any situation you encounter while trading. While the above tips are aimed at intermediary traders, even experienced players will find them invaluable in many areas.
This article is written by Marc Adam, founder of BrokerNotes.
