Tips on how to become a trader for a living

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Contents

How to Become a Professional Trader

Take Your Trading to the Next Level

To become a professional trader, you must learn trading basics and advanced basics. Once these are mastered, you can learn proven strategies and gain experience in implementing them.

Also, it’s important to be realistic about this profession. There is no perfect method of trading that consistently produces only winning results. However, if you practice learning to discriminate accurate information from that which is incorrect or misleading, you can spend most of your time focusing on information that will make you a more efficient and profitable trader.

Trading Basics

One of the most efficient methods for learning to trade is learning market and trading basics. A solid understanding of the basics provides the foundation that will support your entire career. This first level of knowledge is required before more advanced trading information can be successfully implemented.

Books on trading found at your local bookstore or reputable trading websites can provide you with all the trading basics you need at a relatively low cost or no cost. The basics include all of the factual information about trading, such as:

  • What markets to trade
  • How prices move (bid and ask prices)
  • Order types and how to place them
  • Risk management
  • Trading hours
  • How to monitor trading performance
  • How much capital is required to trade efficiently

Trading basics are typically factual in nature, and there isn’t much subjectivity. One information source may say to start currency or forex trading with at least $500, while another source may say to start with at least $1,000. One source isn’t necessarily right or wrong. The information from multiple sources is indicating that you should definitely start with at least $500 and ideally with $1,000 or more.

The exchanges themselves provide traders with most of the market basics. For example, the New York Stock Exchange and NASDAQ provide educational resources on how the stock market operates through the main menus on their websites. The Chicago Mercantile Exchange does this for futures and the Chicago Board Options Exchange does the same for those wanting to learn about options trading.

Learning the Advanced Basics

Learning trading basics gives new traders an opportunity to learn about the various markets and the one in which they want to trade.

When learning the basics, traders determine if they want to trade stocks, futures, options or forex trading. Upon making this choice, they can then delve deeper into the trading basics specific to that market.

For example, a new options trader needs to learn about options Greeks, which help determine the price of an option. Those interested in futures trading need to learn about ticks, points, and the various specifications for each futures contract they may want to trade. Stock traders need to learn how to short sell, how dividends work, and the differences between pre-market trading and trading during normal hours. Forex traders need to learn about pip values and daily rollover rates.

Books on trading and instructional websites can offer information and lessons on these and other more advanced basics topics.

Trading Systems and Techniques

The next step is to learn strategies that will produce a profit in whatever market you want to trade. Such strategies are subjective, which means the source of the information matters. Free resources may provide generic strategies that worked at one time, but no longer work.

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Finding viable strategies requires much more research and verification than learning trading basics. When learning strategies, review charts and look for examples of the strategy at work. If it seems it could be profitable on your own small real-world test, then continue investing some time in the method. If not, leave the method alone.

The best method of learning a trading technique is to find a professional trader that will teach you their trading technique. Some professional traders offer websites or books highlighting their methods. They may also provide personal mentoring, which is the most direct approach to learning how to trade.

It is also possible to learn a discretionary trading technique without any form of instruction. Self-learning is fine, but it may take longer to come up with a profitable system when compared to learning a system that is already profitable.

Many professional traders develop their own trading methods by continually studying charts, noticing certain patterns or tendencies, and then developing a system that exploits those tendencies. This may take months or even years of testing before the trader finds a viable method that produces profits consistently.

Gain Some Trading Experience

Practice doesn’t make perfect, but in trading at least, perfect practice makes improvements. You’ll never achieve perfect results because not all trades are won, even by professional traders. And that is okay.

You don’t need to win every trade to produce a good living. What is required, though, is implementing your method nearly perfectly. This is within your control, while results are not. If you do the right thing, favorable results are more likely. Doing the right thing is following the methods you have learned and opted to use.

Use Paper Trading for Training

When first learning a trading method it may seem very easy. However, once you begin to implement it, it may be harder in actuality than you had anticipated. Most traders quit at this stage and seek out another strategy. Unfortunately, these types of people rarely become successful. Even a simple trading strategy often requires at least several months of hands-on experience before the method starts producing profitable results.

Many trading platforms offer a paper trading capability, which is trading with “fake” money instead of your own, real dollars. As you develop trading strategies, you can try them out with paper money and real-time market movements. Some platforms also offer historical market data, and many professionals use this to back-test their trading strategies to test whether the trades would work under various known market conditions.

As a trader progresses and gains more experience, they will likely find ways to improve their strategies or notice other market tendencies that can be exploited if another strategy is formulated. A successful trader may also find that a strategy that once worked is no longer performing well. In this way, a trader is always learning from their experiences and trying to find better ways of performing their job. They are simply adapting to changes in the market that may make current strategies obsolete but provides an opportunity for a new strategy to be deployed.

The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.

How to Become Amazing at Day Trading

There is a lot to know when you start day trading. This list of 20 tips will help you make sure that you are starting off on the right foot, have a plan in place and know how to manage your risk.

Create a Trading Plan

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Before a single real dollar is put at risk, a trader needs to have some idea of how they will make a profit. The steps that will be taken to attain those potential profits are laid out in a trading plan. A trading plan is a personally-written document that states what we will trade and when, how we will enter a trade and why, when and how we will get out of winning and losing trades, and how we will determine our position size. These are the basics. Additional rules can be added over time as needed.

Prove Your Methods Before You Trade Real Money

With a trading plan in place, the next task is to test that plan in a demo account (no real money at risk) to see how it performs. If the plan doesn’t work in a demo account, it won’t work in the real world. Revise the trading plan, then go back to the demo account to test out the changes. This process continues until a profit has been made for several months in a row. At that point, it is likely the trading plan is a good one. The following tips will help you get your trading plan to that point.

Create a Day Trading Routine to Avoid Mistakes

Create a routine for the trading day. A routine includes getting up at the same time each day, starting to trade at the same time each day and checking for scheduled economic data releases that may affect the market.

Quit trading at the same time each day, and then have a routine for reviewing all trades taken. In terms of each trade, have a checklist you run through to make sure that each trade aligns with your trading plan.

Don’t Hold Positions During High Impact News Announcements

High impact news releases are unpredictable in both how far they may push the price, and in what direction. High impact news events include company earnings announcements and scheduled economic data releases. Avoid holding day trading positions during such events. Instead, wait till after the news is released. Then, use day trading strategies to capitalize on the volatility that ensues.

Review Trades Weekly and Monthly

A review is critical to long-term success. Without review sessions, a trader can’t see the overall picture of what they are doing well and what they are doing poorly.

Each day, take a screenshot of your chart with all your trades marked on it. At the end of the week, review the charts for the prior week and note deviations from the trading plan. Note any areas of the trading plan that could be improved.

Write down a plan for how to implement these improvements. At the end of each month, review your weekly plans and note whether you have made progress on these or not.

Create a Mental Checklist That Each Trade Must Satisfy

When watching a price chart it is easy to get distracted from the trading plan. Prepare a checklist to run through before every trade. The checklist makes sure that the trade meets all the specifications laid out in the trading plan. It only takes a second to mentally go over the checklist and can save a trader from many bad trades.

Have a Plan for When Your Weaknesses Pop Up

Each trader has weaknesses and strengths. Over time, traders will notice their weaknesses, such as not taking a loss when they should (and letting it get bigger) or taking trades that don’t align with the trading plan (and thus, these trades are based on an unproven strategy). Such weaknesses can cause big losses in a hurry. Have a personal plan for what you will do when you notice yourself making one of these mistakes.

The plan may include closing the trade immediately, followed by a mandatory 10-minute trading break. Or, it may even include hiring or asking a friend to work with you on the issue until the weakness is eliminated.

Utilize a Stop Loss Order

A stop-loss order gets a trader out of a trade if the price of an asset doesn’t move in the expected direction. It is the point where the trader must admit they are wrong. It is impossible to predict what the market will do from moment to moment with great accuracy, therefore losing trades do occur. The stop-loss protects the trader for bigger losses during those times. Use a stop loss.

Risk Less Than 1% of Capital Per Trade

Based on where the stop loss is placed, it should limit the damage caused by a losing trade to less than one percent of the trader’s account balance.

One percent of the account, in dollars, is the account risk. The difference between the trade entry price and the stop-loss price is the trade risk. Trade risk, multiplied by the position size, should be equal to or less than the acceptable account risk (one percent of the account).

Stop Losses Are Based on Today’s Market Conditions

Place stop-loss orders based on a proven strategy, but also base them on the volatility being seen today. If a stock is much more volatile today than it has been in the past, the stop loss needs to reflect that. Expand the stop loss to give the trade a bit more room to move, and reduce the position size accordingly. On very quiet days, the stop loss can be moved closer to the entry point.

Profit Objectives Are Based on Today’s Market Conditions

Just as stop losses are adjusted to accommodate for changes in volatility, so are targets. Targets are orders that get us out of a trade when in a profitable position. During volatile time targets can typically be expanded (moved further away from the entry point), and should be, as this offsets the larger stop loss also used during such times. When there is little volatility targets can be reduced, as stop losses are also generally reduced during quiet times.

Potential Reward Should Outweigh Risk on Every Trade

Overall profit is determined by what percentage of our trades we win, and our average winning amount versus the average loss. Day traders should strive to have average winning trades that are bigger than their average losing trade. That means only taking trades where the target has a reasonable chance of being hit and can be placed at a further distance from the entry point than the stop loss. For example, if the stop loss is $0.10 away from the entry, then the target is $0.20 away. In this case, the potential reward is twice the risk.

Implement a Daily Stop Loss

Just as a day trader should control risk on each trade with a stop loss, a trader should also cap how much they are willing to lose in a single day. Bad trading days happen. We can’t let those days ruin our entire month or account. Limit single-day losses to an amount you can reasonably make back on a profitable day.

New traders, who don’t know how much they can make on a profitable day, should limit single-day losses to 3% (or less) of their account balance.

Use Limit Orders When Entering Positions

A limit order will only execute at the price specified, or better. When entering a trade, we use limit orders to control at what price we will enter the trade. If you use market orders we may end up with a different entry price than expected, which may throw off our whole plan for that trade.

Trade the Same Time Each Day

Markets have different tendencies at different times of the day. The most efficient approach to day trading is to implement strategies that work well at a certain time of day, and then only trade during those times.

Focus on One Market at a Time

Some new traders feel a compulsion to trade anything that is moving. These traders typically end up mastering nothing. Focus on one market, and even one specific instrument (such as one stock, forex pair or ETF), and become a master in it. Becoming a master in one thing will produce far more consistent results than being poor at trading a bunch of different things.

Price Action Is More Important Than Indicators.

How an asset’s price is moving is more important than what an indicator is saying. Most technical indicators look at historical prices, and therefore can’t tell you what is happening right now (while the actual price can). That isn’t to say technical indicators can’t be used, but they should be used sparingly.

Don’t Let One Mistake Turn Into More

Trading mistakes happen. They are annoying, usually cost some money, but won’t prevent you from being a profitable trader if you put a lid on the mistake right away. Don’t let it fester, bother you or cause you to make more mistakes. Accept that mistakes happen and then move your focus back to implementing your strategy. Our goal should always be to trade another day. If we let a mistake get us angry and that causes more mistakes, we could lose a lot of money in a hurry.

Avoid Distractions, Like Newscasts or Analyst’s Opinions

A day trader’s job is it implement a strategy that works, over and over again, as conditions allow. Outside input won’t aid in this endeavor, but may actually cause us to deviate from a profitable strategy we are already using. If you have a strategy that works, there is little reason to listen to other’s opinions on the market, except for when engaging in polite conversation.

Trust Yourself, Your Research and Your Practice

New traders often get stuck in an endless search for more knowledge, reading one book after another, watching video after video and jumping from this guru to that guru. Realize that all this extra knowledge won’t necessarily improve results. You only need to implement one strategy effectively to make a profit. Once you are doing that, trust yourself; after all, it is your money.

Day Trading Tips – The Final Word

These tips will help you get on, and stay on the correct path. But, they are not substitutes for practicing a strategy or building and testing your own trading plan. Ultimately, your day trading success or failure will come down to the amount of work you put into it.

The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.

Admiral Markets Group consists of the following firms:

Admiral Markets Cyprus Ltd

Admiral Markets Pty Ltd

Admiral Markets UK Ltd

Reading time: 23 minutes

Forex trading is accessible, exciting, educational, and offers traders lots of opportunities. Despite all this, many traders fail to learn how to become successful traders, and don’t achieve good results in this market. In fact, a high percentage of Forex traders are losing money. Learning to trade Forex and learning how to trade in general can be difficult, and that’s why we have created this article for you.

This article will teach you how to become a successful Forex trader, and how to trade on the live markets. Additionally, it will show you the best trading practices for beginners. In fact, since you’re reading this, you are already on the right path to becoming a successful Forex trader. Below, you will find actionable advice for beginners and pros alike. Without further ado, let’s dive right in.

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What is a Trader?

A trader is someone who places orders on the market, sometimes on behalf of financial institutions (big banks, investment funds, hedge funds), or other times, as an independent trader. Exchange orders, such as purchasing or selling stocks, are either in the trader’s own name, or on behalf of clients or for the financial institution or broker that employs them.

There are several categories of traders depending on the traded markets: foreign exchange (forex), equities, bonds, metals, coffee, meat, etc. In today’s world, there is a trading market for almost all goods (meat, coffee, etc.) and commodities. Most existing contracts are settled in foreign currency, and do not deal with physical delivery.

For example, a professional money market trader manages the cash needs and surpluses on behalf of the bank or clients for which they work, in the short or medium term. A forex trader manages currencies based not only on client needs, but also on the various fluctuations expected in the short and medium-term. An equity trader, on the other hand, trades shares in anticipation of market behaviour, as the trader’s goal is to buy before the share price increases and sell before they fall.

Types of Successful Traders

As we mentioned previously, there are two general types of traders:

  • Those who trade on behalf of clients
  • Those who trade on a personal account

Traders who work for financial institutions or brokers buy and sell shares on behalf of their employer’s clients, and not with their own money. This means that rather than making a profit or a loss on the trading itself, they earn a salary as a trader. In this case, the trader takes virtually no risk in the market – it is on the customer buying or selling financial instruments to cover the risk. The trader’s clients may be anything from individuals to companies that do not have a trading room of their own.

Those who trade on their own personal account are using their own money to earn profit for themselves on each individual trade, and not through a salary. These accounts are funded with their personal funds, and trades are executed through online trading platforms. Even though online brokers offer leverage, the amounts traded by home traders are much smaller than those of a professional trader. Since online trading is often done on the OTC (Over the Counter) market, the success of traders in their own accounts are only estimates.

How to Become a Trader: Defining Success

Now that you know what a trader is, how can you become a trader? Better yet, how can you become a successful trader?

The first thing that you need to do when it comes to trading Forex is to understand what you want to achieve, and how you define success. What do you want to achieve?

This is something professional trader and coach Markus Gabel discusses in detail in the free webinar on becoming a successful trader below.

In deciding what you want, you have to be realistic. Set yourself a realistic and quantifiable goal. This could be something like: achieve 20% annual return on investment, earn 5000 USD of profit, get a total of 100 pips per month or something similar. Whatever you decide, your goal should also be easy to measure. What is also important is to set a goal that can be achieved over a long time frame – it is recommended to set an annual goal to achieve rather than a monthly goal.

Once you have set your main trading goal for the year, it is now time to start learning how to achieve it. The best way is to identify which resources are available to you. This may include the size of your deposit, the amount of time you are willing to spend on trading, and the amount of available funds you are willing to spend on trading-related matters (software, etc.).

Once you have a clear vision here, it is time to make an action plan. This action plan should include the currency pairs you are planning to trade and the number of trades you are going to commit to.

This can feel a bit overwhelming for new traders, so the good news is that in this article we share our top 10 tips to help you become a successful trader.

But first, if you’re a rookie trader looking for a place to learn the ins and outs of Forex trading, our Forex 101 Online Trading Course is the perfect place for you! Learn how to trade in just 9 lessons, guided by a professional trading expert. Click the banner below to register for FREE!

10 Beginner’s Steps to Become a Forex Trader

1: Set aside expectations

Problems arise when new traders become obsessed with chasing profits, and this anxiety can lead to mistakes that cause losses.

So the first rule to become a trader is to forget unrealistic goals and objectives. The prospect of earning money in Forex with just a few quick trades is extremely unlikely. Operating in a risky and overconfident way can lead you to lose your initial investment.

By setting a high profit objective, you create great emotional pressure, which could result in one of the biggest errors people make when trying to become traders: falling into excessive actions or overtrading. We will return to this concept in tip #7.

Generally, most veteran traders focus on a single thought: “Earn the money you need and don’t stress about earning more.”

As an alternative to focusing only on how to earn money in Forex, try to focus on learning a trading strategy and researching all the trading tools that are within your reach. This will help you establish a lasting approach so you can become a successful Forex trader.

2: Define your trading risk profile

Before making any substantial commitments, get a good understanding of the fundamental aspects of the market. Assess your capital at hand, read trader testimonials so you have realistic expectations of returns, and research the markets and currency pairs you’re interested in. If you don’t feel comfortable with the dynamics, don’t invest in forex, even if it’s profitable. This applies to any market.

If, on the contrary, you think that your investment approach is in line with the Forex market, go ahead!

But keep in mind the following:

  1. Invest only what you can afford to lose without affecting your standard of living.
  2. Diversify your investment, it is recommended that you do not invest more than 20% of your total investment funds in any one market.
  3. What is your risk profile: Moderate? Aggressive? Conservative?
  4. Prepare to lose. If after a series of bad trades you are willing to keep trying, forex is your market!

3: Choose a trading strategy

Once you’ve chosen to become a trader, the next step is to come up with a general strategy. There is no right or wrong way to trade, what really matters is that you define the strategy you will use in different situations.

Sometimes you will see that one trading strategy works well for a currency pair in a given market, while another strategy is more suitable for the same pair in a different market, or in other market conditions.

To become a successful Forex trader, try to focus on harmonising your online trading strategy with your risk profile. Research all the trading tools that are within your reach. Study the techniques that seem logical, and think about how they can be used in your strategy. In addition, you can study how markets behave and learn how the industry works.

Finally, if you want to succeed in trading, don’t forget to do extensive tests by backtesting your favorite markets until you feel secure in your strategy.

4: Set aside your emotions

This may sound very simple, but it is necessary. Emotions are the worst enemy of people who want to become traders. Some traders try to see trading as a game where they try to beat the market, and then when they start losing, they feel overcome with disappointment.

First of all, trading is not a game, and you should never treat it as one. Forex trading is a financial activity that is a mix of analysis and discipline. You should not blame the market, or worry about your losing trades.

To become a successful trader, you must understand the mechanics of forex, trust your analysis, and follow the rules and strategy you set. This is the definitive key to reaping the benefits of forex. Emotions can ruin a trader’s experience, so it is vital to set them aside and not involve them in trading.

If you are down, do not trade. The same goes for being excessively confident and excited: refrain from trading, or be knowledgeable about your mental state. Excessive trading confidence can cause great losses.

One of the best ways to prepare yourself for the emotions of trading is by testing your skills on a free demo account.

Instead of heading straight to the live markets and putting your capital at risk, you can avoid the risk altogether and simply practice until you are ready to transition to live trading. Take control of your trading experience, click the banner below to open your FREE demo account today!

5: Set your stop loss and take profit

No matter what your trading strategy is, you should always set a stop loss. This type of order allows you to define the closing price of your trade. Your trade will close once it reaches that level, even when you are not present. In other words, setting a stop loss will give you the peace of mind of not losing more than the limit you defined.

Note that stop losses are not a guarantee, as there may be occasions where the market behaves erratically and presents price gaps. If this happens, the stop loss will not be executed at the predetermined level but will be activated the next time the price reaches this level. This phenomenon is called slippage.

The take profit is the most frequently used order in the forex market. This order allows the trader to close a position automatically when prices reach a predefined level.

In the video below, you can learn how to set stop losses and take profits in MetaTrader 4 and 5.

6: Keep up with the markets

How can you become a successful trader? Staying up to date with market news is vital. Many market movements are driven by news, central bank announcements, political events, or the expectation of any of these. This is what’s called fundamental trading.

Even if you are a technical trader, meaning someone who makes trades based on chart analysis of a market instrument, you should still pay close attention to the fundamentals, since such events are a key factor in market movements. For example, if you have a reliable trading strategy and several technical indicators that indicate a long trade, check the forex calendar anyway to make sure your order matches current events. Even if your technical trading strategy works perfectly, the fundamental news can change everything.

7: Avoid overtrading

Overtrading is the result of seeing opportunities to make money in forex where there really aren’t any. Some people who want to become traders look for opportunities to reach their goal, but on many occasions they may or may not realise they are deceiving themselves, and this wishful thinking and is putting their money at risk.

There are two common types of overtrading:

  • Trading too frequently, and
  • Trading with too much volume.

Trading too frequently, outside of scalping strategies, is a sure way to lose more money than can be made.

To explain why this can be detrimental, In this Warren Buffett speech entitled ” How to stay out of debt“, Buffett espouses the need for strict discipline when investing:

“In investments, you have to wait until the opportunity is clear, because the markets are not a game. In baseball, sometimes you have to swing at many balls that you don’t expect to hit, but this is not necessary in the financial markets.

There is no harm in waiting for more than a day for an opportunity to arise. You can simply wait until favourable price action arrives, and this shows that you really know what you are doing, and that is when you enter the game. You just need a couple of trades.”

When you’re thinking about becoming a trader, it makes sense to follow this same principle in the forex and CFD market. The lesson is clear: a trader does not have to make a lot of trades to be successful, they just need to make the correct trades.

When you are trading on a live account, you must have a strategy with specific, pre-established conditions for the entry and exit of trades. Simply follow your plan and do not trade on impulse. Trade carefully, and with a lot of volume

The other context for overtrading is to operate with too much volume. For many people, leverage is the culprit.

But is this true?

As we know, forex brokers and CFDs offer significant leverage in their trading accounts. In principle, this exists to give traders the opportunity to earn money in CFDs and forex with small investments. This gives more people the possibility to become Forex and CFD traders, and thus use the services offered by these brokers.

However, in practice, abusing high leverage is still very common among beginner traders who are tempted to maximise their profitability in forex. In reality, what they are doing is maximising their real loss.

High leverage does not inherently mean falling into error. Leverage is simply a tool that allows you to operate with larger trading volumes, resulting in the trades having a larger margin. This is a double-edged sword – if the market moves in your favour, your profits are amplified. If it moves against you, the same is true for your losses.

Trading with excessively high volume makes an account more susceptible to margin calls. The important thing is to learn to avoid overtrading and understand leverage. You can learn more about leverage, you can read all about it in this article, and empower your trading knowledge.

8: Accept that, eventually, you’re going to lose

Every trader wants to become a success. In reality, ‘success’ does not mean that you always win in each trade, but that the average across all your trades end up with a positive balance. Closing each and every one of your trades with a profit is simply impossible. Some professional traders may be consistently profitable on a daily basis, but none can show a trading statement that does not include a single losing trade.

If you lose a trade, do not despair. Some of the most successful traders with decades of experience have confessed that less than 40% of all their trades are profitable, and some even cite less than 20%.

The trick to being a successful trader is for the winning trades are profitable enough that they produce enough profit to cover their losses and maintain a net positive. Keep in mind that this is very common with traders who have participated in the markets for a long time. It takes a lot of mental strength to admit mistakes in decision making, and to close an order with a small early loss.

On the contrary, it also takes a lot of strength to trust oneself and not close an operation with benefits too soon. You need to be patient and follow the trend.

9: Develop a trading plan

There has been much talk about discipline in trading, but very little about being an organised trader. It all starts with your trading routine. You need to have a strict trading plan that covers most of your trading activity, which will help you reduce risk from unforeseen shifts in the market.

Many beginning traders develop negative trading habits. One example is the aforementioned overtrading, in which once a trader starts getting lucky and they continue to trade until they overdraw their account.

On many occasions, some traders have good trades due to chance or luck, which ends up reinforcing the negative habits in trading, resulting in it being nearly impossible to break these bad habits. How can this person become a successful trader if they repeatedly leave the result of their trades to luck?

Many traders believe that luck will not abandon them, but as everyone knows, luck is not infinite and one it runs out, it will create consistent losses. Therefore, it is important to reinforce healthy trading habits, as these will help you achieve your goal of becoming a successful Forex trader.

10: Choose a broker that matches your risk profile

If you are worried about the financial security or reputation of your Forex broker, it can be difficult to focus on your trading. If, on the other hand, you have confidence in your Forex broker, this will free up mental space for you to devote more time and attention to analysis and developing FX strategies.

Research prior to committing to a specific broker can go a long way, and can improve your odds of being a successful trader in the competitive foreign exchange market.

So who is the best broker?

The best broker is not the one that promises to help you become a successful trader. The best broker will have the best answers to these questions:

  • Are they regulated by any government entity?
  • Will your money be protected and insured?
  • How will the customer service be once you open an account with them?
  • Are they a good Forex broker for beginners?
  • Do they have a good trading platform?

You should take time to research the best broker for you, as will find a lot of reviews on forex brokers and all kinds of online forex broker rankings. When it comes to online forex trading and CFD trading, as well as dealing with forex brokers and CFD brokers, you should always trust yourself, as deciding who is the best Forex broker and who is the best CFD broker will ultimately come down to you.

When it comes to our thoughts on the best Forex broker, we might be biased, but we think that Admiral Markets does a pretty good job.

Admiral Markets offers over 8,000 unique instruments to trade, with industry-leading offers in spreads, low commission, as well as negative balance protection to give clients the best possible experience and chances for success.

Over 100,000 traders have chosen Admiral markets as their broker, and it’s thanks to their continued faith in our product and offering that Admiral Markets has been given numerous awards.

Admiral Markets UK Ltd. is a regulated broker, and you can read reviews of the services provided on the FPA website.

Admiral Markets also offers extensive educational resources, such as free webinars where you can learn to trade from successful professional traders discussing market movements and the fundamentals of trading. Beyond the webinars, we also have an extensive library of educational articles for you to learn every detail, strategy, and fact about the industry and market.

So, if you’re ready to trade the live markets with Admiral Markets, you can open a live account by clicking the banner below!

Bonus tip: The importance of Forex education

The Forex market is constantly changing, so traders need to be able to understand the ups and downs of this market. There is no patterned formula or set of rules to guarantee success in Forex. Instead, it is a combination of many things all at once – and to succeed in this market traders need to be patient, talented and mindful.

Understanding this is the first step in Forex learning. If you are interested in beginning your Forex education, why not consider taking Admiral Markets’ Forex 101 course, so you can learn how to trade on Forex and CFDs with online lessons from experienced professional traders, completely free of charge.

Being able to talk about ratios, charts, indexes and trading should be regarded as a skill to aspire to when you start to learn about Forex trading. In the beginning, it can be tempting to rush through your learning, but it’s important that you step back, take the time you need, and advance at a sensible rate. You need to be able to constantly evaluate your performance, and understand the reasons behind your wins and losses. Now let’s see why should you learn how to trade Forex the right way.

Now that we’ve covered the basics, let’s take a look at the steps you need to become a professional Forex trader:

Professional Forex Trading Tips

Pro Step 1: Develop your trading strategy

The most significant step in preparing and protecting long-term participation in the market is to build your personal trading strategy and to stick to it. Once your feel confident that you’ve done enough research on the instruments and technical aspects, gotten a feel for the market with a demo account, and defined a realistic risk profile, it’s time to develop your strategy.

Whether you choose to be a forex scalper or long-term investor, the point of your strategy is to develop consistency and routine. As with every other trade, practice makes perfect. The deeper your knowledge and experience with an instrument or technique, the more you’ll be able to make more consistently successful and thoughtful decisions within it. As you grow as a trader, your strategy will likewise grow with you.

Pro Step 2: Do not overtrade on a demo account

Many people want to become Forex traders, but most never move beyond trading on a demo account. The truth is that, in order to become a successful trader, your trades should consistently be making you money. And the only way they will make money is if you are trading with real money on a live account.

For this reason, it is vital to switch to a live trading account as soon as you’re ready. If you’re going to use a demo account, your goal should be to use the demo account to learn the ropes, with the intention of switching to a live account once you understand how to trade.

For new traders who are trading consistently using their demo accounts, usually a month is enough time to understand the mechanics of the trading platform and to start becoming a professional trader.

It is advisable that traders should not postpone live trading for more than three months after they have started trading on a demo account.

Pro Step 3: How to Become a Successful Trader in Forex

Finally, once you’ve established your trading strategy, and switched to a live trading account, you should move on to the next step—or steps, rather:

  1. Develop a trading plan and always adhere to it.
  2. Set stop-losses for every trade. Otherwise, failure is almost certain.
  3. Don’t risk more than 2% of your margin per single trade.
  4. Keep your emotions separate from trading.
  5. Never trade to compensate for your losses.
  6. Only trade when you feel it’s the right moment.
  7. Don’t be afraid of losses, every trader has them.
  8. Try to achieve more profitable trades, and have less unsuccessful trades.

This is the right path to follow in order to become a good Forex trader. You will be facing lots of losses and stress along the way, but don’t give up. With effort and passion, you can make up for any bad experience you may have.

If you would like to learn more about professional Forex trading, you can do so with any of our educational webinars – many of which provide you with the opportunity to learn about advanced trading psychology and candlestick trading in the Forex and CFD markets.

Start Trading

It’s not difficult to begin trading, and you can begin with a demo account from Admiral Markets within minutes. Simply create a Trader’s Room account, download and install the trading platform software of your choice, and begin trading! If you feel confident in your trading ability, you can instead go straight to a live account and upload your funds and start trading the markets in real time.

Being a Forex trader allows you to work from nearly any place with an internet connection. Hotel rooms, cafes, and—thanks to the latest technological developments—even more distant corners of the world. Forex traders are blessed with strong growth potential, and their lifestyle can certainly offer a lot of enjoyment. But if you’ve ever taken this path, you know this gift does not come easily. The sooner you start, the faster you’ll get there. So why not start trading now?

About Admiral Markets

Admiral Markets is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world’s most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

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