The system we’re going to talk about isn’t the holy grail of forex trading. There isn’t anything like it. How to become a profitable forex trader has less to do with strategy and more to do with mindset. In fact, if a trader has the wrong mindset, no forex trading method can be profitable.
The Forex System, which was created, will help you improve your trading mindset so that you can trade profitably. The method is made up of some principles, let’s have a look at some principles now:
This is the type of approach that should be applied to every major project you start. Setting precise, measurable goals to guide you when embarking on a new road is beneficial. You won’t have anything to compare yourself to if you don’t establish any goals at all, or if your goals are imprecise. Clear objectives help you stay on track for success.
This second concept is inextricably linked to the first. Many new traders create goals, but they aren’t always realistic. Setting a goal of producing $10,000 in annual profit with a trading capital of $500 is highly energetic, ambitious, and optimistic – all attributes that are quite appealing – but such mission impossible are best left to Hollywood. And, because failure to attain a goal is so demotivating, there’s no reason to create goals that are absurdly difficult to achieve.
To make sure you’re setting realistic trading goals, ask yourself the following questions:
- What is your financial capacity?
- How much time can you dedicate to studying? Your financial aim is partially determined by the quantity of money you have available for trading.
- The more time you have to devote to learning new things, the more trading methods you may try out and master. Learning about various trading strategies and approaches will improve your chances of finding one that works for you.
The most difficult component of trading, according to every good trader, is keeping your emotions at bay. It’s difficult to stay in deals with a lot of unrealized profit, just as it’s difficult to exit a losing trade. It’s difficult to maintain faith in a trading method that hasn’t been delivered in a long time, and it’s all too easy to begin doubting everything you do.
You must do all possible to avoid making emotional decisions, and one of the most significant measures you can take in that direction is to determine what type of trader you are. What personality type do you have when it comes to trading? Are you a risk-taker who can (relatively) handle a loss? Are you patient and disciplined, and do you feel a stock’s natural direction is up?
In my book, ‘Forex for Ambitious Beginners,’ I go into greater detail on the process of trader self-assessment and include a list of questions to help you determine your own trading personality. If you already own the book, I strongly advise you to study the chapter on self-evaluation.
Rather than downloading a trading system from the internet, you should create your own. I understand how tempting it is to simply mimic the trading technique of some (ostensibly) great trader, and while this may be a very profitable strategy, just because it works for them does not guarantee it will work for you.
The best thing to do is make a list of those techniques and let other traders tell you what works for them so you can figure out which aspects you like. Borrow parts of other people’s trading tactics, but only to shape them into a strategy that is tailored to your trading personality, financial situation, and time frame.
If you are a hobby trader who only wants to stay in the market without losing too much money, you don’t need to spend years developing your system; however, if you are committed, serious, and want to achieve financial freedom, it may take years to develop and fine-tune your own successful trading system.
Do you think that’s a little too much information? What if you were starting a business and were informed that it would take three to four years to become a profitable firm? Do you think that’s strange? Because if you do, you should avoid starting a company.
Trading on the financial markets for a living in order to achieve financial independence is also a business. It will most likely take you a couple of years to perfect consistently profitable trading. (And don’t listen to anyone who tells you otherwise).
So, choose a trading technique that is a good match for your (trading) personality. Create a setup, an exit strategy, and the appropriate money management, and you’re good to go.
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The word ‘Impassionate’ has two different meanings, which is interesting. On the one hand, it denotes enthusiasm for something, while on the other, it denotes indifference. To be effective as a trader, you must understand both meanings.
Be enthusiastic about trading.
Look, if you’re simply in it for the money and don’t care about charts, price movement, financial news, or how different tradable instruments relate to one another, in other words, if you don’t enjoy the game, you’re not going to stay long as a trader. You may struggle at first, and there will undoubtedly be bad periods, so if you don’t have a passion for the activity itself, or for trading in general, getting through those difficult periods will be quite difficult.
When trading, maintain a level of objectivity.
You’ve worked hard to create a trading system that is tailored to your trading personality, with a good setup, exit strategy, and money management. One of the primary reasons for using a trading strategy is to avoid making emotional decisions. Now that you’ve entered the market, it’s time to put your system to work.
As a result, when the post is open, you are unbiased. Your system is in charge of the trade, and you don’t care if it goes in one direction or the other. The method won’t guarantee you a 100 percent win rate – no system can – but you’ve built it up to be successful overall, and now you just have to sit back and watch it work.