You want to know the secret to success in Forex trading don’t you? Of course you do, we all want to know what the forex success formula is to become successful in Forex trading. The problem is, there is no one formula to success in Forex trading.
We are all different and success in forex requires putting in the time and effort required to understand what works and what doesn’t work for you. However, just because there isn’t one forex success formula, it doesn’t mean there aren’t guidelines and steps that will increase your chances of becoming successful in Forex trading.
There is common ground among the successful when it comes to the steps they took, and these are summarized in the “forex success formula” below. This article outlines the steps for success in forex trading and this information can help you attain the level of success you desire.
So without any further delay, lets get started.
The Forex Success Formula
There are so many unknowns when it comes to forex trading that even the most seasoned traders can tell you they don’t really know what will happen next. Where is the EURUSD going next? How far will the price move? When will it get there? You see, there are countless unknowns, but to succeed in forex trading you need to overcome any uncertainties.
In order to do that, you need to break things down in to simple to follow steps and just focus on taking the next step with the bigger picture in mind.
Is it possible to develop a formula for success in forex trading? If a forex success formula was possible, this is what it would be in a nutshell.
The right knowledge, plus the correct application of that knowledge, plus time and dedication, should lead to success.
I say that it should and not will, because there are no guarantees when it comes to trading, only probabilities. This is how you can increase the probability of success, and it all starts with education.
Invest in your forex trading education
The first step in this forex success formula is all about education. A good solid foundation of knowledge and an understanding of the market is vital for your success as a trader. Not only the operational aspects of trading on a platform, but how and why the market moves. So you can make better informed trading decisions.
This is crucial because there are thousands of people who lose money trading due to the challenging nature of the business and a lack of knowledge. To be successful in any business, it is important that you get proper training and education so that you understand what you are doing and why.
There are many ways that you can go about this which includes books, videos, seminars, courses on forex trading and also practicing on a demo account. There is an abundance of information out there, you just have to search for it and the great part about this is that it is all usually free.
Commit to success in forex trading
The next step in this forex success formula is your commitment to the process and to your success. If you want to be successful in forex trading, you can’t just wish it would happen. It doesn’t work like that, you need to put in a lot of time and effort. You need to take the necessary steps that will help you reach your goals.
It begins with a sense of direction but commitment is important in everything we do. Because if you are not committed and when the going gets tough, you will have thoughts about quitting. Succumbing to them might be the easiest option, but in the long run, you wont be successful. You need to have the right mindset to not be persuaded by them. Quitting is the very last thing you should be doing!
One of the main reasons why people struggle with trading is because they don’t truly commit themselves 100% to their success in it. They have unrealistic expectations, don’t put in much time or effort, end up losing money, then give up.
Develop a trading strategy and a trading plan
Another reason why there is such a huge difference between the successful traders and those who are losing money in the market is because the former has a plan. It is all about developing an effective trading strategy and a trading plan that provides you with some sort of edge.
There are as many ways to trade as there are traders and your trading strategy or trading plan should be based on your personality. You must develop your own trading strategy or system based on your own style of trading and what works for you.
Trading strategies and trading plans are essential in forex trading. A trading plan is basically a set of rules or guidelines that you follow. It will include information such as, what constitutes a buy or sell signal, what your risk management rules are, what you will trade, etc.
Here are some reasons why you need a trading plan.
- You will know what to do and when you should be doing it.
- It will help you to be more methodical and systematic.
- It will give you a benchmark to track your progress against something.
Your trading plan can be considered as your forex success formula or business plan to successfully trade in the markets.
However, its not always going to be smooth sailing, you will have losses along the way.
Track your progress and make improvements
This is where keeping track of your progress will allow you to identify what is working and what isn’t. The majority of new forex traders don’t keep a journal of their trades and they don’t review the trades they made enough. When there are insufficient or inaccurate records, it becomes difficult to learn from your mistakes.
What most traders do, especially in the beginning, is look at their account balance just to see whether they are making or losing money. If they are making money, its good, but if not, then its bad. However, there is so much more to it than that.
For instance, wouldn’t you like to know what your success rate is, or what currency pairs make you the most money? Wouldn’t you like to look back at the trades you made and reevaluate the reason behind taking them? How will you know what is working and what is not if you cant identify the patterns in your performance?
Keeping track of your trades will help you see these patterns and what changes or improvements need to be made. Success in forex trading is an ever evolving process. The ones who are most successful are those who make a conscious effort to improve themselves and their results.
When you do, one of the first changes that usually happens is you start losing less, which buys you more time to stay the course.
Set realistic expectations and goals
When you have unrealistic expectations, you are setting yourself up for failure. And when you fail at something, you tend to become discouraged with it and may even stop doing it altogether. With that said, part of this forex success formula involves failure. Success is just a series of failures until you reach your goal.
Forex trading is a great way of making money, but you need to know what you’re doing. Many people think they can buck the forex success formula and become successful quickly, but it rarely happens. In fact, most people lose money trading or spin their wheels for years without gaining any traction.
When you want to become successful at forex trading, you need to make sure that you are setting realistic expectations and goals. The reason why is because one of the biggest things that holds people back from achieving them is that they do not have a strong sense of what those goals should be.
Making money consistently from forex trading may be the pinnacle of it all. But when you first start out, don’t expect to be able to quit your job and start making money right away. In fact, if you can consistently make just 1% per month from trading, you are doing better than the average market participant.
Persevere through challenges and setbacks
The most important thing to remember when it comes to setting realistic expectations and goals is that there are no guarantees. If you keep your expectations low, you will improve your chances of achieving them. In turn, building confidence to persevere through the challenges and set backs that will arise.
In forex trading, you are likely to encounter a number of challenges and setbacks along the way. Most of them will be psychological and may even be emotionally draining. It is crucial that you are prepared for this, never give up on your goals. Instead of quitting, think of what went wrong and how you can improve next time so that your efforts don’t go to waste.
There are no failures, just lessons and investments in your education that you just need to learn from. Success is not necessarily a linear journey, from start to finish. It is a series of detours and failures, with each failure showing you what doesn’t work. Each failure can then bring you one step closer towards what does and achieving your goal.
To be successful at anything in life, whether it be trading, running a business or even losing weight, you have to have the right mindset. But if your mindset is wrong, then all of your efforts will be wasted.
The steps outlined above break down a “forex success formula” you can use to navigate towards finding success in forex trading.
The foundation for success starts with the correct education, correctly applying that knowledge, time and dedication. Becoming successful in forex trading is an ever evolving journey that involves uncertainty. You must adopt the right attitude and mindset to persevere through the challenges and set backs along the way.
If you follow the process outlined above, have a strong desire to succeed, and put in the time and effort necessary, then you should achieve our goals.