Forex trading is the act of converting one country’s currency into the currency of another country. It can be very profitable, but people struggle alot because they go about it the wrong way.
Here are 5 top secrets of fired trading success:
1) Create a Trading Journal
These days many traders have opted to abandon maintaining a trading journal, largely as all brokers provide real-time trade records for clients. The problem is that these records don’t catch everything, something that truly successful traders understand. When you start a manual trading journal, you are able to get to down the core of your forex trading efforts; through independent tracking, you can monitor margin usage, profits and losses per trade, buying power, and so much more.
Trading journals aren’t exactly fashionable. However, while they can be time-consuming, they are one of the leading secrets of forex trading for a reason. Taking this old school approach lets you maintain a manual look at your trading history, which helps you spot overall progress between brokers and allows you to address mistakes along the way.
2) Stress Test Your Trading Strategy
Putting it simply, your trading plan is going to be your game plan for success, as it’s a rulebook that is going to dictate what you can and can’t achieve when you trade forex. The problem is that while crafting a trading strategy that looks good on paper can be done in a few hours, putting it into action is the only way to determine its true effectiveness. The amount of traders that enter the forex market without putting a strategy through its paces beforehand is frightening. Let us tell you now—and we really can’t stress this enough—before you commit to any trading strategy over the long term, you have to stress test it.
Stress testing a forex trading strategy needn’t be a chore in spite of what others may tell you. Countless simulation tools out there can help you without putting any of your capital at risk. These tools allow you to “run” your strategy through various historical data and trading scenarios to see just how exactly it holds up. As has been said many times in the past, anyone can create a trading strategy, but only rigorous testing can truly determine its effectiveness.
3) Understand the Differences Between Fads and Trends
You need to remain glued to daily financial news should you want to be a competent forex trading, but that isn’t going to be enough to make you an out-and-out success. Smart traders understand the importance of determining the differences between fads and trends, so for this, you are going to need to have a grasp on macroeconomics and their market significance.
The large majority of traders opt to analyse market developments in terms of their impact on parameters such as GDP. On top of this, they are always able to make more sense of important macroeconomic policy changes, such as interest rate revisions. Anyone who wants to know the true secrets of forex trading needs to know that breaking down the details of macroeconomics of inflation and GDP all the way through to interest rates and earnings is key.
4) Remain Glued to Newswires
It was touched on above, as it’s pretty well-known that the newswires of the world are going to deliver information you should in part base your trading decisions upon. The problem is that most traders aren’t paying enough attention to the news that really affects the market. Due to the focus on technical analysis, the act of fundamental analysis has been pushed onto the back foot. You simply can’t afford to ignore the key financial and economic newswires of the world, as this information is what the most successful traders use to stay one step ahead of the game.
5) Commit to the Task
If you really want to become a true forex trading master, what you need to showcase is true commitment. The absolute worst thing anyone can do is simply “dabble” in the forex market, as by doing this, you are putting your capital at risk. Successful forex traders (and those who understand the true secrets of forex trading) commit to regular trading over the long term, often on a daily basis. The importance of creating a trading “schedule” and standing by it becomes apparent, with this being one of the forex trading secrets you shouldn’t ignore if you have profitable trading in mind.