How to be a Successful Forex trader Segment 1FIRST HAVE A PLAN .
Better yet, have 2 Plans!
Most traders have a trade plan, that will tell them when to get in and when to get out (or at least it should and I will cover that in the next segment)
What a lot of Trader's don't have and really need, is an account management plan.
An Account Management Plan is necessary to keep you from causing too much damage on bad days, to having a positive outcome on so-so days and a Great out come on the good days. In short, it will protect your account and allow it to flourish :)
1. How to do you handle the bad days? Unfortunately, we all have them but limiting their impact is crucial to your long term trading success. Personally, I risk 2% of my capital per trade and usually only take 1 sometimes 2 trades per day. so the most I will ever lose in a day is 4%. which is okay because the majority of my trades have a 3-1 RRR or better, so I can make that up in 1 trade. Might i suggest, limiting your daily losses to a percentage that you can make up in a single day/session. You don't want to spend days trying to recoup losses from a single day.
2. How do you turn the so-so days into a positive: On day's where the market does not do what you expect, you need to recognize that and hopefully bank some profit or at the very least, cause no damage to your account. Sitting on the sidelines patiently waiting for a good trade is a lot better than being in a bad trade. Today was a So-So day for me. As illustrated in the above chart, I took a pullback trade with an entry at 1.8318. it took a lot of heat and almost got stopped out, but I stuck with my stop loss and the trade came back and dropped down to the bottom of my Asian box, where I banked 1/2 my position and moved my stop to flat. And the remaining 1/2 of my position did indeed get stopped out. So yes the market did not breakout and run down as expected but I still made a profit. :)
3. Make the good days.... Great!!!
Before you enter into a trade, you should know where you are getting out, both good and bad. On the days where the market breaks your way. Stay with your anylasis and don't close the trade early. I talk to a lot of traders who do this and I get it!. The trade is Green, the Money is there...let's grab it!! You need t check yourself and stick with your original anylasis on how far the trade could run. That said you also must be prepared to protect your account. Personally, Once I am up 2% on the day. I will NOT let it become a losing day. Period. If the market reverses, I am out and I am done. Once I am up 4% I will lock in at least 2% of profit and so till the market reaches my Profit target and then I will close my full position. Although the market may run further, I stick with my original analysis of the proper Profit target.
I hope this post is helpful and If you have questions, either put them in the comments below or message me
Allen
