The first key element is one that we have already mentioned, it is also the only element of negotiation that seems to attract more attention: the negotiation strategy. 1. The commercial strategy Your trading strategy is basically how to trade, what needs to happen for you to pull the trading trigger? Most trading strategies are based on indicators such as RSI, moving average or a combination of several different indicators, personally I prefer not to trade based on the indicators. Being able to simply read the price action off the charts will provide you with a much stronger basis for determining your trades. Whatever your choice, having a good trading strategy is very important when it comes to becoming a profitable Forex trader. The question is what do I mean by "good"? What constitutes a 'good' trading strategy? Most traders define a 'good' trading strategy as one that has a high success rate. The truth is, you must ask, how was this 'success rate' established? On how many exchanges were determined, 10 exchanges? 100 trades? What about asking the question, they took all operations following the precise steps of the business strategy?
The first key element is one that we have already mentioned, it is also the only element of negotiation that seems to attract more attention: the negotiation strategy.
1. The commercial strategy
Your trading strategy is basically how to trade, what needs to happen for you to pull the trading trigger? Most trading strategies are based on indicators such as RSI, moving average or a combination of several different indicators, personally I prefer not to trade based on the indicators. Being able to simply read the price action off the charts will provide you with a much stronger basis for determining your trades.
Whatever your choice, having a good trading strategy is very important when it comes to becoming a profitable Forex trader. The question is what do I mean by "good"? What constitutes a 'good' trading strategy? Most traders define a 'good' trading strategy as one that has a high success rate. The truth is, you must ask, how was this 'success rate' established? On how many exchanges were determined, 10 exchanges? 100 trades? What about asking the question, they took all operations following the precise steps of the business strategy?
It's not as simple as finding a trading strategy that claims to have a 70% success rate and then just executing it, chances are if you've been in the trading game for some time, you know it's never been that simple.
For example.
A trading strategy claims to have a 70% success rate
However, when you trade it, your success rate is only 40%
Why is this
Of course, it could be that perhaps Trading Strategy A doesn't have a 70% success rate to start with, but let's say for this example it does. So what else could be the problem? The answer is that it lacks the other two key elements of a successful Forex Trader, let's take a look at the second one.
2. Business psychology
There is a key component that affects every operation you perform ... you. Your Business Psychology is often the difference between a successful and a failed trade. He may be the strongest human being on the planet, but he is still human and as a human he has emotions.
Trading is a highly charged emotional game, especially when you are exchanging large amounts of money, naturally your emotions can catch up and influence your thinking / behavior as a trader. Sometimes, unconsciously, you will make an exchange based on your emotions, whether you are 'Avenging the Trade' or just being greedy, it all depends on how strong your Trade Psychology is.
You might have the best trading strategy in the world, but if you have a weak trading psychology, it doesn't count at all. Let's take a look at some of the ways that your emotions can affect your business decisions.
Emotions that prevent you from taking the business
Emotions that prompt you to make an exchange
Emotions that cloud your judgment
Your trading psychology will improve as your exposure to the markets improves, of course I mean LIVE Trading for real money. Getting started with a DEMO account is fine to start with, but you don't want to feel too comfortable trading with DEMO funds when you can start trading LIVE. Of course, make sure you understand the risks involved and NEVER trade with money that you cannot afford to risk.
The final key is a game changer, most newbies do not understand the power it produces, the following key is money management.
3. Money Management
We are all different, some of us have 5,000 pounds in reserve that we can put in the trade, some only have 500 pounds and for some those types of figures that they can only dream of. In other words, we are all different, we all have different finances, different objectives / goals, different reasons to operate in the Forex Market.
Money management or risk management is that very important part of trading that determines how much money you will risk in a single trade. This amount will be determined by what your individual goals are and also how much money you actually have to invest in the market.
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