Your Forex Trading Attitude
Forex trading is about more than just the act of placing a trade and making money. You need to think about your forex trading attitude as this affects how successful you are. If you do not have the right attitude then you can be causing problems with your trading without realising it. Trading psychology is just as important as trading strategies.
The Approach to Forex Trading
When you approach the forex market you have to understand how important preparation is. You also have to set personal goals and strategies which suit your temperament. You have to consider the time needed to trade and the timeframe of your trades. The timeframe of your trades affects the type of charts you use and the type of analysis you complete. You also have to consider whether you have the time to analyse the market and complete trades.
When approaching the market you also have to have a consistent methodology. You cannot successfully trade if you are constantly changing methods or diverting from the method you have chosen. Once you choose a method you should test it to see if you like it, if it suits your temperament and you could use it often. You should also consider which currency pairs your system works best with as these are the ones you will need to trade.
What Your Trading Mindset is
You have to have a certain mindset when you trade in order to be successful. You have to be disciplined as you need to stick to the systems and strategies that you have. Diverting from these plans can lead to losses. You also have to be patient as you wait for the market to move in the way you need. Impatient traders often try to trade on market conditions that are not there and often lose. You need to be objective and not let your emotions get the better of you. Emotional trades can lead to severe losses as you run with losing trades or try revenge trading to get your money back. It is important that you have realistic expectation of what you are going to get out of your trading. Expecting to be a millionaire after your first few months is not realistic and will lead to increased risks taken and general disappointment.
Choosing What You Trade
There are a lot of currency pairs on the market and you should not try trading with them all. You need to choose a few pairs that you can focus on. Once you have identified these pairs you should find out all you can about the countries and the foreign exchange market. You should also consider the fundamental data which affects them and when this is released. Different currency pairs trade differently and you should find the ones that best suit you.
Having a Good Management Plan
Trading forex should be viewed as a business and all businesses need to be managed correctly or they fold. You have to have good management plans in place to limit the risk of your trading and your losses. There are no system which are 100% profitable so there is always going to be a loss. With good management you can limit the amount of the losses and the potential risks.