To say it directly, there is no actual formula for success in trading. However, you need to be equipped with the proper knowledge and skills to stay focused despite the failures that might come along the way. You will have a higher success rate once you have a combination of talent, hard work, and these 3 important things.
- Approach
Time Frame in Forex trade is the type of trading that suits your personality. For instance, you are the kind of Forex trader who likes to trade in a five-minute chart, then it goes to show that you are afraid for an overnight risk. Contrary to that, if you like weekly charts, then it indicates your willingness to see some days ahead.
However, if you are more than willing to monitor the activity whole day, then you should create a huge trading decision based on your analysis. It requires time to make money out of Forex trading. Those short time scalping might only mean losses or small profits.
- Right Attitude
Your attitude in trading defines your success. Be very sure that you have patience, discipline, objectivity and realistic expectations to attain higher success rate.
Patience – you need to wait for the price to reach a certain amount of level for you enter or exit. As they say, “Patience is a trader’s virtue”.
Discipline – this is connected to the first attitude. You need to have an adequate amount of discipline for you to be patient in waiting for the right point to do the right action. There might be times when the price is not what you are anticipating. However, you must have the discipline to trust in your system and never do second-guess.
Objectivity – this is also known as your emotional detachment. If you think that your system has a high-reliability factor, then just trust it and avoid being too emotional.
Realistic Expectations – the market has full of unexpected moves then and there. However, you cannot anticipate that you will gain $1,000 every time you invest $250. Be realistic towards your expectations.
- Management
There is no such thing as 100% sure when it comes to Forex trading. Even those prominent system can only guarantee 65% of profit and 35% of the loss. It is therefore important to understand that management and execution is the key to profitability. After all, risk control is the definition of a successful trading. You may get frequent losses but you still need to try again and use another form of strategy. It will take few attempts to make your trade on the right path.
Conclusion
There are so many methods to use in trading. There is no such thing as right or wrong when it comes to trading. There are two Forex trading rules as stated by Warren Buffet, “Rule No. 1: Never lose money. Rule No. 2, Remember rule number 1.” Always remind yourself that small losses will be alright but big losses is a different thing. Stay focused on these key skills and success will surely be on your side.