Forex trading is one of the most profitable businesses in the world that can make a fortune for the savvy investor.
But, this money machine is not that easy for all. Most people have very little knowledge of trading before they jump in expecting a quick profit…
How much money can I generate in profitable trading? Well, this common question that has no specific answer at all. It all depends on your skills and understanding of the art of trading. Research says 9 out of 10 people find it difficult to make profitable trading. So, what makes that one person a profitable trader than others?
For profitable trading, you must know the core principles of trading that are basics that every trader should follow. Expert opinion and advice is invaluable in gaining knowledge of the trade. Industry leaders like Rob Booker come with a series of podcasts to train newbies. Rob Booker reviews are the best to turn your trading into a profitable one. You can also find him on youtube channels with videos on exciting Trading strategies and tactics. https://www.youtube.com/user/robbooker
Other than a basic understanding of trading, you can follow some simple tips for profitable trading in 2020.
Set a Profitable Strategy
You will come across a ton of different strategies to make profits in the market. You have to find a strategy that suits your goals and objectives the most. You can set your strategies based on fundamentals, trade lines or moving averages. You should also account for your risk tolerance level in picking a strategy.
Other than that, set long term strategies to earn profits. Most beginners follow random strategies in a small time frame. That often turns loss and blows through your capital. In forex trading, it is always better to stick to a plan for a long time frame. Patience plays a big role in your strategy.
To learn more about a profitable trading strategy, you can read successful trader’s testimonial, blogs or take expert advice. Besides, all beginners must go through demo trading before they step into the real world trades. You must first successfully execute your strategy on a demo account. Remember, you can always modify your strategy based on market trends later.
In most cases, people start trading with 100 dollars or more. Whatever capital you are starting with, you must know about capital management. First and foremost, you will never invest the entire capital in one market. Experts say the maximum limit must not cross 20% of your total capital. Invest money in different markets, to minimize risk.
In terms of capital amount, there is an advantage of working with a bigger capital. If someone has only 100 dollars capital and loses 50 dollars in a bad trade, then he loses 50% in that trade. Whereas if the capital was 500 dollars, and he still loses 50 dollars on a bad trade, then there is only a 10% capital loss. So, try to manage capital in the best possible way.
Observe the Trade Market
The world’s biggest trade market is always changing. No single country can control the Forex market. But, there are factors that have direct correlations to the market. These can be sports events, politics, pandemics, natural calamities or any big trade war between superpowers.
Being an investor, you must go through newspapers and economic reports to better understand what affects the market trends. Also, it is important to track your own trades. If you research your past trades, then you will start to find the weak points in trading and what mistake to avoid. These are opportunities for improvement.
Checking price charts
In forex trades, you must keep track of numerical data. A price chart allows you to find the best entry and exit points. You can calculate the PIP and make quick decisions in trading. There are plenty of free charting softwares to help build your business. Some of the market best are NinjaTrader, TradingView, Finviz, MetaTrader 4 and many more.
Trading charts can be three different types (line, bar and candle)with two different axes (price-y axis, time-x axis). The graph can have three different patterns denoting the market trend. The upper trend in the graph means appreciation of currency while the downtrend denotes depreciation of values. If there is a sideways trend, then currencies are at stable conditions.
If You Find It Wrong, Get Out
You can never trade expecting profits all the time. In fact, you must have to accept some losses in trading. So, only risk what you can afford to lose. There is no need to invest funds that can directly affect your life expenses. Don’t even take loans to become a trader.
All traders have to face some bad trades and capital loss. So, how can you minimize the risk? Experts say when you are facing bad trades, stop trading and get out to save your capital.
It is also important to figure out why your strategy failed. Too much trading in a short interval and going beyond expectation often can deplete your capital. In case you are sick or inactive, take a break and then come back stronger. Lack of concentration on trading can also hurt you badly.
Pick The Right Broker
If you are not comfortable with your broker, then change brokers. Brokers’ support is always important to grow your business. Find a broker with a good reputation and quality services. The broker must allow different trading accounts, spreads, optional leverage, fund security, trading instruments, order execution quality and slippage, and most importantly good customer support.
All Forex traders have three different risk profiles- moderate, aggressive and conservative. Whatever risk tolerance profile you have, you must keep experimenting with your strategy. The foreign exchange market is always evolving every day. So, if you stick to the same plan, then things may not turn profitable for you.
You must keep experimenting a portion of your investment to redesign your strategy to be more effective. Many marketers believe experimenting is the key. There is no single strategy that fits everyone’s goals. You have to explore it and execute it for the best result.
Rock Solid Nerves
To become a successful gainer in trading, you must grow a rock-solid meind frame and nerves of steel. There will be tough times for sure. All successful traders had losses in their trading career. So, you have to accept it and keep continuing your trades. If you can stick to the market even after a heavy loss, then trading is definitely made for you..
Forex trading is profitable when you are strategic in the market. You have to plan every step and keep trying consistently. Experience and strategy will help you reach your goal. There are no shortcuts. You have to believe in yourself and keep trying.