IronFX, Is making profit consistency as a Forex trader possible?
Can a Forex traders actually make constantly money in the Forex market?
Achieving profit consistency as a trader
Trading is not an easy sport. It becomes easy if you are willing to shape your character as a trader through pressure and testing moments as well as finding out what really make sense for you and try to develop it into a strategy. This week’s report will be overviewing information relating to traders making their first steps towards being consistently profitable and the process required in order to advance to the next level. Of course, different traders have different ways of approaching trading, thus we would suggest following this report with an open mind and if something works for you then apply it to your philosophy.
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How to cultivate trading skills
Recognize, trading is a skill. A skill needs time to be cultivated just like a seed takes time to develop into a plant and later on into a tree. The best way to look at trading especially in case of a beginner is to admit that you have very little knowledge of the subject at the moment. This will help one with the idea that a beginner is usually to make slow but steady moves. This applies also to traders that have tried in the past but have failed to succeed and they are making a second or a third attempt. Trading cannot be seen as a 9-5 job where you walk into an office do your tasks and then at a pre-determined point you are out. Traders follow the market and the market remains open even after the normal trading session ends. Moreover, the market’s price action in the current day can provide openings and hints as to where it could be moving in the following day. Thus a review at the end of every session is most probably a nice idea. This can help you improve your instrument selection whether that would be stocks, commodities or even forex pairs. It may be positive to state that traders can focus only on a limited number of instruments. Being all over the place is not an option as it can disorient a trader.
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Respecting the process
To achieve consistency in trading one has to be able to know before the day starts what instruments are in the market’s focus currently. An example could be a forex trader that has market availability 24 hours 5 days in a row. The opportunity is there for you to take advantage. Yet, to be able to take advantage of certain price movements you will have to be prepared. In other words, trading requires a lot of organized research on behalf of the trader. Research consists mainly of two parts, the technical and fundamental perspective. Simply, a trader should know as much information as possible for the asset they are about to trade. This includes information on where the asset is priced currently, where the price action can go, what sort of news or information tends to affect the asset’s price action and what updates are available currently through the media regarding the asset.
What skills are required to be profitable?
As a beginner, it is not a priority to focus on profits. The trader’s priority is to develop skills that will help build a solid foundation for the long term. This period can be used by traders to experiment different ideas that will help form an identity. During this time, a trader is advised to keep a lookout on the strategies or plays that he or she can easily relate to and use successfully. This process can provide clues on what the traders can potentially build upon in the near future. To be more effective, it may be useful to record and re-watch the trading carried out during the day.
Furthermore, the trader will have to select a certain approach or strategy or a number of them that will enable one to at least start making some gains. This is often called a play that can be identified and memorized by the trader. This can be a certain trend that the market carries out regularly, similar to a loop. It could be useful to clarify that this can be a very basic strategy for a beginner but its development maybe challenging. A trend recognition process, needs time to be developed accurately by the trader. This is a learning curve that requires respect and the trader will need to work hard day after day to get results out of it. Some traders may need six months to start making their first understandings of a strategy, while others may need a year. Thus, we would like to warn traders that they can possibly be in for very lowly beginnings. Even traders that manage to progress fast, are most probably to face severe difficulties like losses that may force them to return to basics and recuperate.
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Learning from others
After identifying a play, the trader will need to execute it repeatedly as a form of practice in order perfect its use. This can be tested through a trading simulator platform in order to avoid the losses that could possibly occur during the experimenting period. Another way, can be to study one’s trading history and identify what improvements can be made or how can one be more efficient with volume size, losses, profits, patience…etc. The trading history will help by pointing out exactly what a trader is doing wrong and what right. It will create questions for the traders which if answered properly can perhaps provide the most beneficial feedback creating a stepping stone towards success. Listen carefully what the trading history is telling you.
On a different note, finding other successful traders and monitoring their trades can also help develop skills. This can be a very strong point due to the fact that a consistently profitable trader can teach us a lot with their experience or personal ideas. The process which that person has been through in order to develop the skills and mindset to make money consistently as a trader, can be an eye opening experience for a beginner. One of the most positive characteristics of trading is that it enables one’s personality to be revealed. Making decisions based on one’s inner-thinking and comprehension of the markets, can be crucial for success as a trader and can make a huge difference in profits. A beginner and a consistently profitable trader can be trading the same stocks but their results can be very different. The experienced one can be making huge gains while the beginner continues to struggle and considering his actions as a failure. Small details on how to carry out the trade can make a big difference at this point. Looking through the eyes of an experienced trader, we can learn a lot on why they opened a trade at a specific level for example. Or under what circumstances they chose to go short instead of long. Making choices on what we think will happen and what the market is telling us, can be very different. Then again, another important aspect of trading is the volume size of each trade. Beginners are advised to keep their positions small, yet as progress is made, volume may increase so the overall return can start adding up.
The priorities of a trader
Consistently profitable traders can be better prepared to deal with these circumstances as they have trained their minds to identify certain characteristics of price movement on their charts or their indicators. Under such circumstances traders become more aware of risk management which is vital to long term profitable performance. Some experienced traders are amazingly accurate with their trades and beginners are advised to find these people as they can expand their knowledge of the market but also help them see themselves worth of being in a similar position. Self-belief is vital. Some traders seeing others book large profits get intimidated and back down. Others, the most talented ones, may say if that person can do it, then so can I. It all depends on how worthy you see yourself being. Or even more importantly, experience traders can show beginners how they manage the challenges of trading. Reading stories of the most popular and successful traders in the world we realize that at some point, they too failed. They have gone through a time where most of the strategies they were working on, did not manifest as they wanted them to. This is a testing time that all traders must go through and must be prepared for it. A great Japanese proverb says fall down seven times get up eight. The fact that at some point you will fail must motivate you to improve and learn from possible mistakes. In this case some traders recommend journaling that forces the individual to go back and take notes on how the day took place. This will help the traders identify their strengths but also their weaknesses that may be holding them back. In more detail, they write down how a profitable day started, what feelings went through their minds during the day on what reasoning they placed their orders. On the other hand, journaling a bad day may help you identify what had created the negative emotions that may have limited your performance during the specific session. Moreover, if you have gone through a red day or a number of red days, it is important to make some adjustments that will enable you to start putting some green days in. For example reducing the volume size or reducing the number of trades and lowering your target profit for the week, can help you adjust and move forward. This can help you regain confidence sooner than later and will empower you to move on to bigger and better things. Once these skills are developed then we can start focusing on the outcome. This will become obvious as you go from being down on your account balance, to being break even and then being positive. Your account balance will display an ascending line on the performance chart and at that point you may be able to increase your trading size. If you feel confident with your plays you may also be in a position to start utilizing new strategies. Yet this will come with time. For now it may be important to keep the profitable momentum going.
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