I was looking on the forums and seeing tons of new traders lately talking about if forex is a scam, and mentioning how hard it is to find good education to become successful and I was no exception.
Just like every other trader out there, when I started it was because I saw a flashy ad on Facebook, it was one of those “if you use this magic indicator you will make 1 million% a month and be rich”. This intrigued me as I had always been curious about day-trading, so I decided to try it out, I paid a few hundred dollars, practiced, did all the rules on a practice account, and although I was losing money, I fell in love with the IDEA of trading. This set back my trading success by over a year, until I finally buckled down, and created a success plan to achieve my dream of being a full time trader. So my steps to success are something anyone can follow.
Step 1—money management and trading psychology
When I started trading, I had heard on all the forums and stuff about money management and trading psychology, I thought I was great at it, but I decided it was time to really dive in and understand, so my first step of achieving trading success was truly learning what money management really meant, and creating steps so that I didn’t revenge trade, or trade emotionally that means I sat down, and created a plan. I defined how much I was willing to risk every day, week, and month, and once I reached those limits I stopped trading for the day, that way I wouldn’t be revenge trading, and I wouldn’t be blowing my account super fast and give myself time to get back into a good trading mindset after losses.
Step 2—Decide if you want to be a swing or day trader
My second step to success, is figuring out what kind of trader you want to be, I fell into the trap of looking at all pairs on all timeframes, and was overwhelmed by charts, looking and taking trades that I tricked myself into thinking were there because of how many charts I was looking at, if you are serious about trading, choose the type of trader you want to be, do you want to be a swing trader, or day trader, and if so, pick 2 timeframes you want to specialize in, for example, 5/15 minute for day trading, or 1hr and 4hr for swing trading. After picking the timeframes I wanted to specialize in, I realized there was no point in having 28 different pairs open, choose 6-7 pairs that have a good chance of moving, and only watch those pairs, no point in watching things that aren’t volatile and you can’t make money on. The bottom line is, swing trading and day trading are completely different, do you have time to be in front of your charts to find and manage trades that come and exit fast, and can you handle the quick trades? Or do you not have that much time, and prefer positions that you hold for days, or sometimes even weeks? The bottom line is you have to pick the type of trader you want to be, and stick to it.
Step 3–Find a system and stick to it
Then what I consider the most important part, is create or find a system/strategy and only use that one, journal all your trades, find out what is going wrong with them, and STAY with the system, for a MINIMUM of 90 days before you evaluate how good it is. If you constantly jump from system to system, you will never really improve because you aren’t giving anything you trade a real chance. Those are steps that I took to achieve trading success, and a basic blueprint I think anyone who is serious about trading should follow. I hope you enjoyed reading this small article and more importantly I hope you learned something that will help guide you to be on the right side of the market! If you think I missed something or you just want to add more things that every trader should know just post it as comment so my visitors and friends can benefit from your knowledge!