3 steps to become a successful Forex trader
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by Harry Davies on 18th October, 2016 and updated 18th October, 2016 5:04pm
Whether you are new to Forex trading or believe you have mastered the art, there is always room to become a more disciplined, smarter and wealthier trader. Having seen our fair share of Forex success stories we at Spread betting believe to have cracked the code with regards to Forex trading, feeling the following steps to be the way forward in crafting the perfect, self-disciplined trader.
Define your goals
While some have benefited from the scattergun approach the truth is talented traders are strategic, highlighting their mission before devising spreads. Selecting a style of trading that is compatible with those goals is essential, locating a trading persona that best suits your financial situation as well as your personality. For instance, if you cannot bear the idea of sleeping with an open position in the market then you might consider day trading, with short-term positions better for those a little nervous about their predictions.
Calculate your expectancy
Continued from the previous point calculating your expected return is paramount. Many bettors choose to devise a formula, determining how reliable their system is.
Investopedia advises to look at your last 10 traders in order to determine effectivity.
'Take a look at your last 10 trades. If you haven't made actual trades yet, go back on your chart to where your system would have indicated that you should enter and exit a trade. Determine if you would have made a profit or a loss. Write these results down. Total all your winning trades and divide the answer by the number of winning trades you made. Here is the formula:
E= [1+ (W/L)] x P – 1
W = Average Winning Trade
L = Average Losing Trade
P = Percentage Win Ratio
Keep a record
By keeping a record of your successes you will create a learning tool, allowing you to create a style that works for you. With success giving way to more success and confidence it can be a good idea to log your reasons for the trade, including the fundamentals that sway your decisions as well as your entry and exit points. Note the emotional reasons for taking action also, this can help you realise the reasons behind your style.
If you are interested in forex trading, then why not register with one of our partners. Only working with the best platforms on the market you are just minutes away from betting with your admirable welcome bonus. You can also find out more about Forex at our sister site Forex Trading.
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