HOW TO ENSURE YOU ACHIEVE TRADING SUCCESS

Success in any area of human endeavor will prove to be impossible if the “hard-work” factor is taken out of the equation. Some folks erroneously believe that luck will someday shine on them to achieve their dreams of success in life, without consciously putting in the effort required to actualize their goal, thus they perceive luck as something that occurs by chance. But to the contrary, wise folks on the other hand see luck in a different light, as what takes place when preparation collides with opportunity. The latter school of thought hints us about the lifestyle of the successful ones. Nothing can be farther from the truth than to think that we can become lucky someday and make it big through a mindset of idleness.

If you can study the lifestyles of successful people to see what happens behind the scenes, one thing you will realize is that success came by spending donkey hours of hard work and unwavering commitment to following their routines. The behavior of successful people is a complete contrast to that of the unsuccessful. While the poor can indulge in spending long unproductive hours, either playing video games or staying glued to their TV screen, the rich will rather give themselves over to working hard, doing stuffs that others consider as boring, or what others avoid doing and make unnecessary excuses for.

In this article, you will be exposed to the fact that forex trading is not something you rely on chance for you to be successful at. If you fail to strictly abide by the rules of setting yourself up for trading success, you will end up doing what losing traders are doing, and you will find yourself gambling instead of trading forex like the professionals who approach it like business instead. The only way to go in the business of forex is through the right preparation and religiously following routines that gives you an edge. If you develop the passion and love to do all that is required for success, then trading success is just at your fingertips.

Like in every of life’s endeavor, success will not come in forex because you want it to be so. If you put in the “hard yard” from the beginning, the rest of the journey will become easy. After mastering the set up that suits your personality, coupled with a plan that will guide you on when to execute a trade, the next thing will be to wait for the right conditions as dictated by your trading plan, and then pull the trigger. Another important thing is to cultivate the proper trading mindset. You need to know that a good trade will not always produce a winner; what makes it a good trade is the fact that you followed your tested and proven plan, which is always profitable after a large series of trades. So, if you understand that losing is part of the game of trading, you will not allow fear to make you behave emotionally in the market.

BE CERTAIN ABOUT WHAT YOUR TRADING EDGE/STRATEGY IS!

This is what struggling or losing traders attach little or no premium on, that makes them learn the hard way. Having a trading edge helps you to remove guess work out of your trading; to be honest, there is no need to be in the market without a trading edge or strategy. The truth is that there are so many profitable trading strategies that you can adopt or modify and make it your own, but the right thing to do is to pick one and spend time mastering that one; this is the only way to judge how profitable or effective a trading strategy is. You may end up without a trading strategy if you decide to jump from one strategy to another one without mastering any. At the end, some traders confuse themselves with methods that make their charts to be cluttered by indicators.

If you follow the steps necessary to create a trading edge or strategy, then placing a trade, or making an entry in the market will become the simplest thing to do. Always remember that a trading edge or strategy should be a high probability trading system but will not guarantee a winning trade all the time. Its profitability lies in the fact that, over a broad sample of trades, it will end up giving you more than 50% win rate, which when coupled with good money management strategy, is all you need to be successful. Again, always remember that trading does not have to be complicated, and that the reason you have a trading edge and a plan is so that you can find repeating patterns as defined by your plan before entering the market; and you should never dream of entering the market if the pattern is not present.

CREATE A TRADING PLAN AND ROUTINE

This topic is usually perceived by many amateur traders as boring; i am saying this from experience and irrespective of that perception, you have to change your mindset and learn to live with it until it becomes part of you because that is the only way you are ever going to be a successful trader. It is a general mindset that people tend to shy away from healthy habits that lead to success, and give excuses that make them look like boring stuffs. What unsuccessful folks indulge in is not found among the rich of the society. Take Bill Gates, Warren Buffet or Donald Trump for instance; obsessions such as playing video games always or staying glued to their TV screens is non- existent among this category of individuals. These people discovered what they needed to do to get to the top, and they faced it squarely without complaining. The truth is that when you learn to love doing the boring stuffs and enjoying the process, at a point it will cease to become boring but rather become something you love doing.

The whole idea behind having a trading plan and routine is so that you can have a guide that will instruct you on how to use your trading edge or strategy. You should write it out and always reference or read it anytime you want to have a look at your price charts. The purpose of this is to give your trading strategy a framework that will make you view trading as a business that should be done from a calculated perspective, rather than having the gambling mentality of randomly executing trades as is the case with most traders.

The next thing to do after writing out your plan and routine is to start practicing with the aid of a demo trading account under live market conditions, or trading as well with very little amount of money. After doing demo trade for like a few months and you’re consistently successful, you can then start risking small amount of money. You should try to be disciplined with your trading, such that you should never attempt to trade without consulting your “plan and routine” to see if the conditions for trading as contained therein are present. You should simply walk away from the market if the pre-defined conditions for trading as contained in your plan are not present, but if present, then execute them by placing a trade as follows:

·         Determine the best level to place your stop loss.

·         Work out your position size taking into account your pre-defined 1R- per trade risk amount.

·         Determine your profit target, ideally 1:2 or better.

·         Execute/set and forget the trade.

FIRST MASTER YOURSELF TO MASTER THE MARKETS

To master yourself in this context means to master your own mind, i.e. to be able to control your behavior so that you don’t act in an emotional way when trading. The idea of mastering yourself and that of following your trading plan are interwoven, and what this means is that you cannot talk of following your trading plan if you have not mastered yourself.

If you are ever going to be a successful trader, then you need to develop the proper mindset of a trader; but to develop this mindset is one thing and the harder part is to maintain that mindset. What happens with many traders is that they may build the right mindset and try to be disciplined and focused for a short while, but after a few trades they may find themselves derailing from this attitude due to the outcome of their latest trade. Their emotions now get the better of them; they either become overconfident after a winning streak, or become afraid and lose confidence in their strategy after a losing streak. Try to avoid this by all means by having unflinching trust in your plan and strategy, and always go and read your plan before entering any trade; also do this whenever you become frazzled, and try staying away for a while from the markets, this way you can regroup and get your bearings back.

When you master your mind, you will naturally find it easy to develop the following characteristics: patience, discipline, and keeping to your routine. In a nutshell, mastering your mind is the key to mastering the markets; being in this state will ensure that you position yourself, so that when obvious trading opportunity shows up, you would have taken the guess work out of it, and it will not be the time for you to start thinking what to do, but to do what you have planned doing.

MONEY DECISIONS/CONTROL

Here, we will briefly look at a couple of key aspects of money management. Most importantly, to manage your risk as a trader, you need to define and control your per-trade risk (1R = risk amount per trade) so that it equals a 1R dollar amount that you can afford to lose on any given trade without it adversely affecting you financially or emotionally.

Another way a trader can effectively implement money management is by not over-trading. Though this is not directly a money management system, but it serves the purpose because over-trading can also amount to risking a sizeable amount of money, since all the risks from many trades can add up to become a huge amount of money, and in the event of losing out, a trader can become emotionally charged.

You will be better off by becoming a low frequency trader who patiently waits until he spots his trading conditions as defined by his trading plan before trading; and paramount to note also, is that you should only risk a dollar amount which you are comfortable with losing on any given trade. When these are in place, other things will naturally take care of themselves.

CONCLUSION

Setting yourself up for trading success can be basically broken down into two categories: that of learning and mastering a trading strategy, and that of implementing your trading plan. By breaking these parts into smaller and smaller bits, digesting and understanding them becomes easier.

The act of trading is more of waiting and doing nothing, than being restlessly glued to one’s computer screen. Once you have a crystal clear trading edge or strategy, and a trading plan/routine, there’s not much left to do than to sit back and wait for pre-defined trading opportunity to surface. Professional traders do nothing most of the time, than being actively involved in the markets, and you should imitate them to be on the right track. Truth is that, high probability opportunities that occur in the market per month are just a hand-full, therefore trading all the time is merely an act of gambling.

In summary, setting yourself up for trading success means doing what you are supposed to do to get yourself prepared, and just wait for the right setup to appear on the charts. It is therefore very important that you start by learning from a true professional like what this website is dedicated to doing; and remember that success (or luck) will not come if we don’t adequately prepare to harness opportunities as they come along.