Trading in the foreign exchange market has no one-size-fits-all strategy for success. Imagine the market as an ocean, and the traders as surfers. While surfing involves skill, balancing, patience, right tools, and awareness of the surroundings, trading is very much the same. Your profitability rate will increase considerably if you combine strong analysis with successful execution. Like many other skill sets, successful trading comes from a mix of talent, dedication and effort.
In the trading world today, any average trader would experience being bombarded with misleading and contradictory information from a multitude of sources, including unknown forex blogs or forums, books, and even videos online. While some of these learning materials are very beneficial information to an average trader, most of the time, traders don’t know how to filter out the bad information from the good. This is because as traders, we often succumb to our intuitive instincts based on what we hear and see. For example, we would take a big step after listening to some people that we trust like our mentors. Therefore, it is important to know the secrets in forex trading so that we don’t waste our time and effort doing the wrong things.
You may have heard the saying: “cut your losses and let your profits run.” One truth about forex trading is that you should reduce your losses as soon as possible. However, letting your profits run, which means resisting from selling when there is potential for a gain, is easier said than done because it relies on the trader’s skill to execute profitable trades to begin with. In short, forex trading is very difficult to anticipate accurately. This also means that as a trader, we should be disciplined with our trading habits.
Before you begin trading, you should already plan your exit strategy. You should set your stop loss and stop profit orders the moment you open a position. The purpose of doing so is to avoid being hesitant when it is time for you to make a hard decision. Some traders make the costly mistake by not wanting to exit when they reach their profit target, thinking that they can make even more to only end up losing money.
There are no such things as a 100 percent profitable trade in forex trading. Even the most successful traders in the market using the most successful methods will at most score a 65/35 percent of profit-to-loss ratio. With good trade management and execution advice from the reputable forex broker malaysia, it is possible for an average trader to master the skills of making profits from forex.
Last but not least, it is very important as a trader to know yourself well, before you start trading a single pip on the market. This is because different trading plans or strategies fit different personalities. Understanding yourself, for instance, what you want to achieve on a short-term and long-term basis, will ultimately help you develop a unique trading plan that will work for you.