Forex Trading Essentials: How to Be Profitable in the Market
We’ve discussed plenty of money-making opportunities here on The Money Whisperer, but nothing is quite as accessible (and as exciting) as forex trading. You don’t need to invest a fortune to start trading foreign currency pairs. You don’t have to have years of experience in the financial markets to be successful as a forex trader too.
Making money in forex trading is easier than you think. For starters, there are more opportunities to seize, especially since you can make money regardless of how the market moves. With the tips and tricks that we are about to discuss in this article, you can be more consistent with your trades and stay profitable in the forex market.
Trade with a Plan
One thing you should always have whenever you enter the forex market is a plan. You need to fully understand why you enter the market, the target profit you are aiming for, and the risk you face by opening the position. Essentially, you must know when to enter the market and when to exit with a profit.
A good trading plan guides every position you open. It allows you to define a Target Profit (TP) and set a suitable Stop Loss (SL) according to your risk profile. It also limits your exposure to unexpected market changes and even allows you to maximise your profit using tools like a trailing stop and additional positions.
Learn from Others
As mentioned before, you don’t need to have years of experience in the financial markets to be successful as a forex trader. Today, you can learn from others with more experience than you through social trading platforms like ZuluTrade. As the name suggests, social trading platforms or networks are where traders share their trades for you to learn from.
There are a lot of successful traders that share their trading journal as signals on ZuluTrade. The platform itself is filled with features and tools you can use to follow trades of others and learn from them. InvestinGoal has all the best posts on ZuluTrade if you want to learn more about social trading – and ZuluTrade in particular.
Watch Your Emotion
Some of the best advice I received when I first started trading foreign currency pairs is to trade cold-blooded. Emotions have no place in forex trading. I’m not just talking about negative emotions like fear either.
When you get overexcited upon seeing the market jump 30 pips to your direction, you are less likely to close the position (and secure those pips) and may eventually end up with a loss when the market corrects itself. I know, because I did this once.
Chasing losses or hoping for bigger wins often lead to bad decisions and bigger losses. The decisions you make when feeling emotional aren’t always cool, calculated, or reliable. The sooner you learn to take emotion out of the equation, the more consistent you’ll be in the market.
And that’s the most important key of them all: consistency in the market. With a trading plan, insights from other traders, and your own objective mind making the trading decisions, being profitable in the forex market is no longer a big challenge to overcome.