The world of forex trading as we all know has evolved so much in the last 10 years, and as traders we all undergo a process to learn how to trade so we can generate some great money consistently. We are all aware that what constitutes success in trading involves a process from a great trading system, risk management, psychology, structure, planning, execution and managing. There are many great trading systems/strategies out there, it's really up to us to implement them in a way that we find this consistency.
Before you enter any market as a trader, you need to have some idea of how you will make decisions to execute your trades. Some people choose to look at the underlying fundamentals and then use a chart to determine the best time to execute the trade. Others use technical analysis; as a result they will only use charts to time a trade. Fundamentals drive the trend in the long term, whereas chart patterns may offer trading opportunities in the short term. Whichever methodology you choose, remember make sure your methodology is adaptive and your system should keep up with the changing dynamics of a market.
Obviously traders are in the markets to make money, but you need to understand that the more you feel a “need” to make money the more you will experience difficulty in actually making it. By effectively managing your risk on every trade you can begin to forget about the money. This means setting your risk tolerance at a dollar amount that you are truly okay with losing on any trade. You will not feel any pressure or emotional tension if you truly do not care if you lose the money you have at risk on a trade.
If you were to ask a group of profitable traders what the secret to their success is, chances are that you’ll hear the word consistency more than once. Of course, achieving consistency is easier said than done. But by creating a process and setting trading rules for yourself, you can achieve consistency in your execution, which is the first step to becoming a consistently profitable trader.
Human emotion is unpredictable and that the future is unforeseeable; there are no certainties in market behavior and this makes trading a game of probabilities. Having a set of rules, versus none at all, helps you frame the forex market to build your system and make good trading decisions in the face of that uncertainty. With time, deliberate practice, and experience, these rules will lead to a natural feel for the market, great trading habits, and consistent profitability.
