Forex trading. It’s both a game and a vocation. A game because at its very core it’s really little more than a way of leveraging the simple laws of probability into writing you a paycheck. A vocation because it demands a serious and committed mindset and asks you to scale a seemingly mountainous learning curve.
So how precisely do we win this game of forex? While there is probably no one single route to attaining success as a forex trader, embracing the below ideologies and concepts should certainly help nudge you faster towards a consistently profitable trading portfolio…
Success With Forex Trading
- Understanding That Forex Trading At Its Core Is A Simple Game Of Probabilities. 50.50 – that would inevitably be the long term outcome between heads and tails if you kept tossing a one quid coin. That’s the basic law of probability in action. Forex trading is also a game of probabilities, but happily, we can do many things to help flip the odds from 50/50 to odds that are overwhelmingly in our favor. At any point in time, a novice might look at a forex chart and randomly guess whether a currency pair is going to go up or down in the next price candle. They have a fifty fifty chance of guessing right. The trained forex trader will have a much better chance of calling the direction of the next price candle right. Why? Because as forex traders we are zen masters at studying probabilities. So, when we analyze price formations like double tops, head and shoulders, flags, pennants and the various other shapes that the charts gift us – we’re actually just analyzing price probabilities.
- Plan All Your Trades, Then Trade Your Plan. I don’t know a single successful forex trader who simply trades off the cuff. The markets are just too wise and battle hardened for you to turn up and randomly pluck out pips on demand. A good forex trading plan will provide clear cut guide lines on everything from screening high probability trade setups and providing clean entry/exit signals, to specifying the combination of indicators to be used.
- Consistency In Everything. Remember that race that the Tortoise won? He beat the Hare in what would have to be the sporting upset of the century. The tortoise won by consistently and slowly plodding along. Your attitude towards forex trading must be similar – open positions that are consistent in size and analysis. Set stop losses and take profit markers with equal consistency. Trying hare brained schemes like doubling up on positions just because you’re winning (or losing) is nothing more than a mandate to destroy your equity over the longer run.
- Positive Mindset. Embrace an overall positive mindset while you carry out your trading. This is not to be confused with nonsensical hoping and pleading with the Gods when a trade has gone against you, and is hurtling deviously toward your stop loss. A positive mindset simply invokes the universal secret of the laws of attraction which basically says…whether you want profits or losses, just think so, and in the long run you shall have it. I don’t know about you but I’m opting for profits.
So there you have it – from morphing into a forex tortoise to wishing for pips, we’ve covered a lot of interesting if unusual ways to become a more successful forex trader.