Becoming Successful in Forex
1- using Stop Loss order is one of the most important factor not to sink account.
While entering to trade, stop order should be entered. A successful investor does not cut profit after starting to make profit unless return signals come. He/she knows not to content with a small profit he/she has obtained and when he/she starts to loss, he/she closes the position determined before. So, big loss is prevented. Stop order is put for that purpose. Even entering a stop order is recommended for you at the moment you open position, stop order you place properly will preserve you from serious risks. These risks are:
a) failing to cut loss in short time
b) remaining in loss for long time
c) failing to take small losses
d) loss of big part of capital in one or two trading,
e) non-acceptance of being wrong
f) listening to persons urging you and causing you leave your trading plan.
2- Having strong written trading plan:
Advantages that good trading plan will provide investor;
a) not take high level risk for small profit possibility
b) not make addition to position in loss
c) does risk your too much money in a trading
d) does not use most of capital as margin
e) controls trading to see whether or not an error is included
f) does not make high trading
g) evaluates opportunities to be occurred in drop trends.
3- Performing trade as per sufficient, necessary and reliable data:
Most of investors decide according to global information and indicators. Investors do not jump in market as per the news they look at from newspapers morning. They make enough effort and allocate time to learn market better and obtain necessary information. According to many brokers, entering in market with detailed and international information taken in day is most essential reason for success. Successful Investor relies himself/herself and his/her information and do not enter in trading depending on uncertain resources.
4- Managing money:
The best method for Forex is that Money management is seen as a part written trading plan. You should make budget of your capital. If your risk is not more than 2% of your capital you can survive even in a few bad trading. Another important approach related to money management is rate of risk and profit.
5- Trading in the direction of trend:
Common view of many successful investors is that trading should not be made against trend. Positions should not be entered from upmost and lower most. Graphics helps you to see trend points and where market will be returned in order to prevent big losses. Furthermore, this information will assist you about when you should exit from your position winning. You should recognize well the difference between trend market and trading market.
6- Existence of discipline:
you should be disciplined to follow written trading plan. Discipline brings the following advantages:
a) you do not leave your trading plan in cases of important profit or loss
b) you do not open position based on insufficient information
c) you do not make careless and impatient trading
d) you can not enter trading in many parities with small capital and little information
e) you follow graphics perpetually.
f) you can keep your feelings under control
g) you do not ignore using Stop.
7- Starting with enough capital:
In reality, it is not only starting with enough capital. Although some investors start with great quantity, they may not win. Since, they do not have written trading plan and the rules of powerful money management. In addition they lack of discipline to sustain these. Starting with little capital and applying all rules are better than starting with much money and making careless trading. Well then what amount figure will be enough?. This completely depends on your trading plan and how much risk you will take in a trading. Furthermore, it also depends on what part of your capital you will use as margin. If you allocate 5% part of your capital as risk, then you should keep 10.000 dollar in your account. It would be 500 dollar in a trading for this figure. However brokers say solid start should be made in the beginning. If your risk rate per trading is 2%, then 25.000 dollar will be in your account and you will not take loss more than 500 USD. You will determine Stop level according to that.
8- Continuance of the position winning:
A good plan will help you to sustain your profit. Good plan will eliminate your feelings while deciding. Good plan will say you that: “If market trend continues in accordance with your trading, then you should put “follow stop” to protect your profit. This level can be amended according to market when necessary. But this level should not be put far away. Good plan will remind you at the same time: “If main reasons in the beginning of trading are still valid and technical indicators approve trading, trading should not be closed. If profit rate of 50% is present, then you can close trading. If conditions allow, adding additional trading to your trading winning should be permitted. Writing of price levels and profit targets are important. In addition, while this written guide should hinder his/her leaving with small profit while basic and technical indicators offers investor to sustain his/her position. However, basic and technical indicators do not certify continuance of position; it should provide leaving position immediately. Furthermore investor should look at resources of coming information well while she/he is in the position winning and should be careful while giving decision.
9- Non-use of feelings while making trading:
In the interviews we have carried out with best investors, we have seen they make their trading without joining their feelings. They do not invest themselves in trading and thanks to this their leaving trading become easy. Unlike some investors, they do not enter in trading to meet their excitement needs and save from trouble. Emotional fears inhibit investors to exit from position in loss. Therefore a successful investor makes preparation logically not emotionally and decides by looking at figures, news.
Things you should perform at first and the features you should have to become a good investor in forex market.
1. having ability of analytical thinking, in a sense knowing after thinking out to make financial analysis.
2. follow agenda and economic developments closely.
3. learn, understand and comment all factors steering money and affecting Forex market.
4. having a sound grasp of developments showing financial impact not only in Turkey but also throughout the world.
5. knowing mathematical analysis and making inference from these analyses.
6. possessing a systematic and strategic approach.
7. thinking long term and being patient.
8. determining strategies as short, medium and long term and distribute risks by taking account of these terms with basket management.
9. follow daily Forex comments and news
We have stated the explanations above to succeed in Forex market. Using these steps on the way going success will help us to become more successful in this market. However, that should never be forgot. No matter how much you apply all of these features, the most important thing is PSYCHOLOGY of person. No matter how we are good at this market, how much we earn, if we do not keep our psychology good, we are condemned to loss all times in this market even though we hold necessary information and skills.