HOW YOU CAN BECOME A FULL-TIME FOREX TRADER

The dream of earning full-time income from forex trading is the desire of every trader, but only a handful of them eventually get to actualize this dream. To be realistic about what it takes to achieve this goal, one has to apply the proper mindset for this to be possible; and this has to do with employing discipline and patience, which are two vital behaviors of every professional trader. Again, when it comes to forex trading, another thing that should be noted is that there are no “perfect” or “Holy-Grail” trading systems, as you may have been made to believe, according to what is written by some forex websites.

On this website, an attempt is made through practical experience to convey information about simple and high-probability trading setups. The truth is that there is no guarantee that forex will start fetching you millions of dollars immediately you start trading, since it is not a get-rich-quick money making avenue; therefore, if you are willing to pay the prize of patiently learning the nitty-gritty of forex trading, then you’ve come to the right place, but if what you really want is for forex trading to make you rich overnight, you can check elsewhere for that.

If you desire to make a living trading the markets, these are some of the critical steps which you need to follow:

1)   Being realistic and honest

If what you desire about forex trading is to earn a full-time income from trading the markets, then you need to take these factors into consideration by asking yourself this question: are you being realistic and honest about what you can earn from trading presently, considering the size of your trading account?

Take a situation where a trader has got just $2000 in his trading account, what is ideal here is to not aim too high with this limited fund, but to see this as an avenue to supplement your income from other sources. You need to realize that in forex trading, you shouldn’t ever risk more than what you’re comfortable with losing on any given trade. If therefore your account size is relatively small, then you need to trade small position sizes to guard against huge losses. Having a small account size demands that a trader uses small position sizes to be able to properly manage risk, and in this process, gradually build his account size. The starting point to becoming a full-time trader is therefore to realize that with a small account size, you need to decide how much money you’re emotionally OK with losing per trade, and then decide what your position size should be to accomplish this.

In your quest to become a full-time forex trader, the emphasis should be on how to become a good trader, and not to think of getting rich quick, or to worry over not making enough money. If your primary focus is how to become a good trader whilst your account size is small, you can be rest assured that the money will come later. Those traders, whose initial goal is how to start making money immediately, rather than how they can become good traders, are the ones who ultimately quit after blowing their account.

2)   Have the basic knowledge of forex trading

Another step to becoming a full-time forex trader is to have the basic knowledge about forex trading. Acquainting oneself with the basics of forex is quite easy, but it is surprising that many traders email me to relate how they ended up losing money, and going by their comments in their email messages, I am able to rightly judge that they lack basic education about forex trading. It is therefore important that aspiring traders try to understand the nitty-gritty of forex trading, like: what it is, why it exists, and basic trading techniques, before they start trading with real money.

3)   Mastering a profitable forex trading strategy

In order to become a consistently profitable trader, what you need is to master at least one trading setup. With enough screen time, this can be accomplished, and then you can go on afterwards to master another setup. This can go on and on as a process of developing your personal system.

When it comes to mastering a price action setup, you need to go for what appears easiest for you to understand. Don’t force yourself to learn a price setup because someone else is successful with it; this approach can be a waste of time since such setup is not tailored for your personality. Since our personalities are different, our brains as well will be compatible with different setups. Don’t be a jack of all trades and master of none when it has to do with mastering trade setups. When you notice any setup that is easy for you to understand, stick to it until you master it. Don’t jump from one setup to another, since doing so will make you waste time that you should have used to concentrate on, and master one strategy.

When mastering an effective forex trading strategy, your first consideration should be whether you desire to be a counter-trend trader or a trader who follows the trend, or whether you want to be both. At the end, it all still boils down to mastering one setup and making it your own, before going on to master another one. Another fact to note is that the way Mr. A will apply a trading strategy, may be different from the way Mr. B will apply it; this is not out of place, but what matters is for you to keep it simple and to be disciplined in trading with it.

4)   Create a forex trading plan (and make use of it)

Another step that will make mastering your forex trading strategy very effective is to create a forex trading plan around it. A forex trading plan is a necessity before you start trading the markets, and creating a forex trading plan is not complicated. The need for a forex trading plan cannot be overemphasized since it serves as a guide on how to use your trading strategy. A trading plan will ensure that you stay focused and disciplined, and you avoid instances of over-trading, over-leveraging, and emotional trading. Emotional trading is what every trader should avoid like a plague, and having a trading plan will do a good job of helping you to overcome that tendency.

5)   Create a forex trading journal (and make use of it)

A forex trading journal provides a means for you to document your trades and monitor your performance in your trading journey. But having a trading journal is one thing, and making sure you use your trading journal is another thing; Many traders have a habit of creating a forex journal and end up never putting it to use, or they just use it for a while and jettison the idea. You need to be disciplined about the use of your trading journal and trading plan to avoid the temptation of approaching forex trading like a game instead of a business which it really is. Having a plan and tracking costs and profits are attributes of a business, so you need to treat forex as such.

6)   Test your strategy on Demo trade

When you eventually gain mastery of a trading strategy, coupled with creating a trading journal and plan, the next step will be to start practicing your strategy on a demo account. Some traders just jump into trading live account without adequate practice on demo account; the truth is that there is no way anyone can succeed with a live account without demo-trading a strategy to see how effective the strategy is. One of the benefits of a demo account is that it allows you to familiarize yourself with your broker’s platform; though there’s no real money in demo account, it can help you prepare for live account involving real money if you treat it like a live account.

7)   Implement risk management

One thing that sets full-time or professional traders apart from amateurs is their ability to manage risk effectively. Aspiring traders should therefore realize the vital role of risk management if their hope of becoming full-time traders will ever see the light of the day. Risk management is the idea of never risking more money than you are comfortable with losing in any given trade; also it demands that you don’t fund your trading account with money you cannot afford to lose

In order for you to effectively manage your risk, there are two factors you need to take into consideration: you need to understand the concepts of risk-reward and position sizing, and how indispensable these tools can be in risk management. Worthy of note is that, amateur or losing traders do not manage their risk, and this accounts for why they don’t make money consistently. This category of people may have good trading system or strategy, but may fail to succeed with it in the absence of a risk management plan.

8)   Right Trading Psychology

To cap it all, one big difference exists between amateur and professional traders, and that is their mindset or the way they reason about trading the markets. Amateur traders approach the markets with a gambling mentality, while professional traders see trading as a business, hence they commit to taking calculated risks in the game of trading. Professional traders do not allow emotional reasons to influence their trades; they always reference their trading plans, and by so doing they don’t allow themselves to be carried away or feel overconfident by few winning trades, or to embark on vengeance trading after a losing trade i.e., wanting to jump back into the market to try and win back lost money. Avoiding these emotional behaviors by traders is the reason for having a trading plan. At the end of every trade, either a winning or a losing trade, a serious trader should go through his trading plan to avoid entering the market for the wrong reason.