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4 Rules Every Successful Forex Trader Follows
Rule 1) Follow A Trading Plan & Strategy
Rule 2) Risk Only What You Can Afford To Lose
Rule 3) Always Use A Stop-Loss
Rule 4) Choose The Right Broker (For You)
Why do so many novice traders fail? What don’t they know that successful traders know? It’s shocking to see the real statistics as to how many retail traders fail, surely this large statistic (believed to be around 80%) can all be dramatically reduced?
Rule 1: Follow A Trading Plan & Strategy
“It is important to resist the urge to trade spontaneously based on your instincts alone without a clearly defined risk-management plan.”
To go into a trade with no sort of plan is foolish – i.e relying only on luck is not a solid strategy that will make you successful. There are many different strategies that varying traders follow successfully. Find out about the 3 most commonly used trading strategies in 2019. Our advice would be to test a strategy; find the one that works best for you. You need to take in to account several factors when finding your perfect strategy, such as, the amount of time, risk and difficulty involved with each respective strategy.
Once you have found the strategy that works for you, continually take notes on how trades have gone – continually learning more about the how your strategy reacts to the moving markets and to make tweaks accordingly.
Rule 2: Risk Only What You Can Afford to Lose
This tip goes without saying and should always be followed by religiously. There is always risks involved with trading, and around 80% of traders lose money with the remaining 20% making the money that the 80% lost. Make sure that you are educated and have a solid strategy before you start trading. Do not use huge leverage, which will catch you out on a bad trade and could deplete all of your equity very fast.
Rule 3: Always Use a Stop Loss
As the name suggests, a stop-loss order is an order that closes your trading position when your losses on that trade reach a certain amount. It a way to opt out of a trade before you lose all of your equity. This is an important tool to use and is strongly advised to always be used. It may be difficult in real trading circumstances with emotions swaying your every decision. If you have a stop loss on a trade it is strongly advised that it is not ever moved.[/vc_column_text][vc_separator color=”custom” style=”shadow” border_width=”2″ accent_color=”#018e9b”][vc_column_text]
Rule 4: Choose The Right Broker (For You)
There are thousands of brokers in the world. All brokers are unique, and will all have their different benefits and negatives (which is varying for every trader and their individual, specific needs). There are so many factors that go into choosing the right broker. If you want to find out more about who is the right broker here, have a look at the 5 most important factors we have conjured up in choosing the broker that is right for you.