What Should you Know to Become a Successful Forex Trader?

by Zack on October 25, 2016

Forex trading is emerging as a great way to trade and earn money. But, not everyone who becomes a trader in forex achieves success. There are many problems which you encounter as soon as you become a forex trader, and one of these is the right trading strategy and platform. You need a sound strategy which can help you establish yourself as a successful trader and a platform, like ETX Capital using which you can not only trade forex, but indices, commodities and currency pairs as well.

Here are the salient ways to become a successful forex trader.

Define Your Goals

The first and foremost step that you must take in the world of forex trading is by defining your goals. Clear goals help you choose a strategy which can aid you to reach your destination and also, on the basis of goals you can select a trading style which is compatible with your objective. Ensure that your personality matches with the trading style you choose.

Choosing a Broker

Choosing a broker is quite imperative as selection of the broker should not only depend on the fact that with whom you feel comfortable, but you should also choose the one who prefers a forex trading platform which is apt for your trading style.

Selecting a Methodology

Most often, the traders experiment with the different methodologies to find out that which one yields the best results. However, before you hit any market as a trader, you need to plan a strategy that how will you take your decisions pertaining to the execution of the trade. While some traders choose to consider the underlying fundamentals of the economy and the company, and leverage a chart for determining the best time to trade, while others leverage the technical analysis to take their decisions. So, whatever strategy you decide, be very consistent in its application to get the measurable results.

Choosing Between Longer & Shorter Time Frames

Most of the traders find it difficult to choose a time frame owing to the conflicting information which occurs while looking at the charts in the different time frames. So, when you are indulging yourself in the direction analysis, choose the longer time frames and when you want to time your entry or exit, choose a shorter frame. Also, if the weekly chart is propagating a buying signal, wait till the time the daily chart also confirms the same information.

Calculating Expectancy

Expectancy is the formula which is used for determining that how reliable your system is. You must go back in time to analyse all the trades which made you win against all your trades which made you lose. After that, determine how profitable your winning trades were when compared with the losing trades, that is, how much profit you gained when you won and how much money you lost in your losing trades. This will give you a percentage of expectancy.

Using the aforementioned strategies, you can surely improve the way you trade and consistent improvements will help you achieve colossal success in the long run in forex trading.

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