5. When it comes to discipline, you are going to have to make sure that you have the strength to deal with stress and control your risk. Being able to exercise self disciple will you to do greatly minimize your losses, while giving you the successes that traders crave. It is critical to follow a proven trading system without deviation so your emotions do not come into play. This is just as true in stock trading, property investment, and any self-employment opportunity as it is in Forex.
Stick to the Trading System
It does take some time to get used to a new Forex investing strategy, so once you have developed a strong foundation for how you intend to trade, make sure that you stick to the plan that you have in place. This will also help you to greatly minimize the total amount of money you lose, while making it through your initial learning curve. Online Forex investment is a different beast from other types of trading, but with the right mindset and planning in place, people stand to earn a lot of money by making the right pair trades at the right times. As with any investment, it is best to get advice from professionals before starting your journey.
If you follow this set of rules, you will have a great chance to reap large profits in your currency trading:
Learn all you can about Forex. Visit free forums, such as BabyPips.com, and go through all their tutorials – take notes. Go to ForexTSD.com and other Forex clubs and read the questions and answers. Post questions yourself.
Go to independent forums and get Forex software and broker reviews. Websites such as ForexPeaceArmy.com and Forex-TSD.com are good sites, but there are many other good forums. You must realize that some people will post fraudulent comments to encourage novice traders to use their brokerage firms, so be sure that you are basing your opinion on software or a on a large number of review comments. I have confidence with some Forex investment companies and Forex investment plans, such as ACM Forex, Dukascopy and MB Trading, but some I have used are to be avoided at all costs (reviews will tell you which ones to avoid).
Realize from the start that non-ECN brokers, or any broker that has a dealing desk, actually trade against their clients. These market makers (also called “bucket shops” by traders) are often unregulated and have great discretion on how quickly and at what price they fill orders. Not all of these types of brokers are bad, your trading is just more transparent with non-dealing-desk brokers.
Open a demonstration account (demo account) with a broker and trade for several months using only virtual money. These Forex simulator trading accounts are usually very similar to the actual trading platform you will be using with live trading, and the price information you receive will be either delayed only slightly or will be real-time currency price information.
Try different trading system software programs, such as Stealth, Forex Virtuoso, London Gold Rush, etc. You may even trade some automated Forex systems like FapTurbo and Megadroid, but, again, only in demo mode to start.
Once you are consistently profitable in demo trading, switch to a live account but use small margin and small pip values. Probably the largest problem in Forex trading is that you must follow your system rules exactly and not let your emotions get in the way. You will not discover how much work you have to do in this area until you are risking real money. You must follow your system.
Practice money management. Never risk more than 1% of your account capital in any one trade (this means you must use stop loss orders set at the 1% loss values – this likewise means you do not need to be using a broker who does not have a wide range of order options such as stop loss, stop limit, buy limit, etc.).
Limit the amount of leverage to use – 50:1 is adequate unless you just want to gamble your money away.
Make your own trades, monitor them closely. Treat this is a business, not as an outlet for your gambling urges. While there are some good Forex signals services, the best trading is done using a Forex trading system that you understand thoroughly and generates its own signals.
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