| Forex Trading Goals: 5 Must Do's |
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| Written by Jeff Niles |
| Monday, 06 September 2010 18:59 |
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One of the main areas that Forex traders fail is in the creation of realistic goals and expectations. More often than not retail traders are lured into trading by promises of huge returns with minimal capital risk. Unfortunately as many of these individuals will soon come to realize, trading is a very difficult business and having realistic goals and expectations can help put a trader on the path towards long-term success. Intelligent Forex traders can put themselves ahead of the curve by following these simple steps.
One of the main areas that Forex traders fail is in the creation of realistic goals and expectations. More often than not retail traders are lured into trading by promises of huge returns with minimal capital risk. Unfortunately as many of these individuals will soon come to realize, trading is a very difficult business and having realistic goals and expectations can help put a trader on the path towards long-term success. Intelligent Forex traders can put themselves ahead of the curve by following these simple steps. 1. Do the Math Sit down and go over your expected Risk to Reward Ratio for each trade. If you have already been trading for a period of time sit down and analyse how much you are making each trade and your winning %. These two numbers will help you formulate a solid profit goal. No trading strategy works 100% of the time so you need to work out how much you lose per losing trade vs. how much you make per winning trade and then figure in your percentages. From there you should have a realistic idea of how much you can expect to make in through your trading. 2. Don't Expect Instant Returns Currency markets are filled with professionals whose sole job is to prey on new and inexperienced traders. The traders you are up against have been trading far longer than you have and you can't expect to be able to beat them all of the time when you are just starting out. Too many traders expect too much out of their initial few months in the market. Take it slow and develop your skills and your strategy and eventually the profits will follow. 3. Skill vs. Profit Try to come up with goals that are not directly tied to your P&L statements. For example, set a goal of following your rules for every trade for an entire trading day. Once that is completed shoot for an entire week, then a month, and pretty soon you will be doing following your rules without even realising it. Train yourself to develop your trading skills and reward yourself when you reach those goals. 4. It Takes Money It takes money to make money. Small accounts are fantastic for testing out whether or not trading is for you but when you get serious and want to go full time make sure you have enough capital to support your business. Solid traders should expect to make 8% in the market over the course of a month. That equates to 96% over a given trading year. Make sure this figure allows you to have the lifestyle that you are expecting. 5. Take It Slow There is no need to rush into trading. Take some time to develop your trading strategy and find out what system works best with your skill set. The forex markets are going anywhere so there is no need to jump in the deep end before you learn how to swim. These small tips will help you give yourself the best shot at long term success in forex trading. They may not make you a millionaire but they will certainly help you get there. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Before you start trading online, make sure you check out Lance Burkhart's excellent e-courses on forex trading, and e-mini trading. |