6 Critical Factors For Successful Trading
Critical Factors For Success in any profession can be broken down into a number of critical factors. Trading is no different. Does your trading tick all 6 boxes or are there any areas you need to work on:
1. Do you have an edge? Trading futures is a zero sum game – you must have an identifiable edge over the other market participants. Have you identified a high probability pattern that can be exploited time after time? Remember though, the only constant in trading is change – you will have to constantly evolve your trading edge to stay ahead of the crowd.
2. Disciplined Execution. There is no point in identifying an edge if you can’t execute the trade. Measure your trading success against your trading plan not the actual outcome of the trade. If you make a loss but you executed your trade exactly according to your plan than pat yourself on the back, don’t beat yourself up over it.
3. Money Management. If your risk per trade is too aggressive then you run too high a risk of blowing your account, too conservative and you will not optimize returns from your system. It is essential to establish the maximum expected draw down of any system and set money management rules accordingly.
4. Have a Trading Plan. A trading plan will dictate what you will do in any given situation during the trading day. When the market is open you do not want to have to think – just concentrate on executing your plan. When the market is closed you need to be preparing for the next session to ensure you have a clear plan prepared.
5. Accountability. You are responsible for every trade. Ultimately the decision to put on a trade is yours. If your stop is hit and the market immediately reverses then you are responsible, not the ‘big boys’ gunning for stops – it happens, move on. If you get huge slippage on your trades then does your trading plan account for it or is your plan unrealistic for the market you are trading?
6. Commitment. Trading is not like a regular job, you don’t pick up a pay check at the end of the month even though you did no work and spent the whole month surfing the web and emailing your friends. You must be committed to placing every trade according to your plan, even through the losing periods where every trade seems to end up a loser. Trading seems to throw up extremes of good times and bad times, you must not get over confident during the good times and you must not give up in the bad times – remember it is all part of the plan. You must set aside adequate time every day to compare your actual performance against your trading plan. You must be committed to continuous testing of new ideas and regular monitoring of your existing plan. Research into future ideas is essential – remember the only constant in trading is change.
Tim Wreford runs Online Futures Trading, a website that provides information and resources for traders. Tim also provides a free day trading system, the results of which are updated daily on the site.
Some people are able to make a killing on the foreign exchange market. Others end up losing everything and quitting totally. If you want to find yourself in the former group, not the latter, you need to do your research. This article has seven amazing secrets which can help you find great Forex success.
1. Set Goals
The most important thing you can do is set goals. No matter what you are trying to accomplish, from losing weight to quitting smoking, goals are what keep you focused and determined. Set goals for every part of your progress, from start to finish. Reward yourself when goals are met and then set new goals to keep yourself motivated. If you continue to best those goals, you will only find success in the future.
2. Set Time Frames
As you figure out what your goals are, you need to set time frames for when they need to be reached. Short-term goals will keep you motivated from week to week, giving you standards which are easy to reach. Long-term goals will remind you of what you strive for and what the little goals will lead to. Make sure your rewards match the goals, smaller treats for short goals and big treats for long-term goals.
3. Select the Right Broker
Choosing a broker has to be done with care. Select someone who comes recommended from traders you trust. Look online for reviews to determine the quality of the broker’s services. Also be sure to select a broker who offers the amount of leverage you need.
4. Open Demo-Practice Account
When you know which broker you will use, open a demo account and start practicing. As you learn how the software works, you will also be able to hone your strategies. Treat it as if it is a real account so that you are building techniques which will work with real money as well. Don’t move to a money-based account until you are completely comfortable.
5. Begin With a Small Mini Account
When you are ready, start with a mini account. This allows you to trade in small sums without using leverage, which is very risky. You can build your comfort even further as you see that your strategies are beginning to work. This builds your research skills and ensures that you will be able to start trading with larger sums without any anxiety.
6. Trade With Home Currency
The best bet when beginning to trade is to start with the currency of your home country. You will know the situation locally as far as the economy is concerned, meaning you can avoid the research necessary if you were to invest in a far away currency. You will also be able to understand better how the currency compares to others, allowing you to choose pairs which offer the greatest rewards. Once you are able to master your own currency, you can move on to others around the world.
7. When Comfortable – Slowly Expand to Other Currencies
These ideas may seem like common sense, but many traders ignore them and fail as a result. Be sure to use them all as you craft your Forex strategies. You will be left with large profits, small losses and an overall income boost.
You can learn more about the Forex Trading by clicking the SUCCESSFUL FOREX TRADING Link in the resource box below.
The very first thing I want to tell you is that you can trade Forex successfully. Now the first step in trading Forex successfully is to believe that you can trade Forex successfully. As many of the self-improvement gurus tell us, “what you believe, you can achieve”. That may sound hokey to you, but it is absolutely true. The first step in any achievement is belief and Forex trading success is most certainly no exception.
Your belief in your ability to successfully trade Forex will grow as you become a better trader. You may be wondering what you can do now if you happen to be someone who has not yet entered the market. Let’s take a look at some of the things that you can do to get yourself in the right mindset before you even take your first trade.
One of the most important things, especially for beginners, is to have realistic expectations. You may be wondering how you can have realistic expectations even if you have yet to place your first market transaction. Here’s some help with that. Keep this statement by Robert Strakkenn in mind, “you don’t have to be perfect to be profitable”. This may be contradictory to what you have heard, especially after seeing so many of the hyped up claims about how accurate certain strategies are and how quickly you can accumulate funds in your account with little or no effort on your part. Let’s list a few expectation level points to put things in perspective for you.
Expect that things will not always go as planned. Contrary to what you might have read or seen advertised every trade is not going to be a winner. The sooner you get this fact for your head, the better off you’ll be in the long run. In fact, I frequently advise people to experience a losing trade, just so they can see that having losing trades is not the end of the world.
Expect that there’ll be work involved. Once again, contrary to much of the “advertised conventional wisdom” successful trading requires effort. This is true of any endeavor in which you wish to excel. If you’re afraid of hard work for some reason, then it will be difficult if not impossible for you to excel in the markets. The people who do the best in trading are those who are willing to put their nose to the grindstone and roll up their sleeves and exercise the necessary discipline to get the job done.
What we just covered is but the tip of the iceberg of things for you to keep in mind in order to trade successfully. You can actually do this, especially if you exercise patience and discipline.
Richard Davieess is an expert in forex trading software [http://www.forex-strategies.com/forex-trading-software/]. Richard runs the very successful and popular website about Forex trading. He has helped people all over the world become better Forex traders. Visit his site at [http://www.forex-strategies.com] right now for more information and/or help on successful Forex trading.