The 7 Most Important Points To Becoming A Successful Forex Trader
In this video:
00:28 – My 7 top tips to be a successful Forex trader
00:43 – #1 – You must have a passion for trading Forex
01:26 – #2 – You must have a strategy that works for you
02:18 – #3 – A low risk money management trading approach
02:56 – #4 – Learn how to trade first
04:25 – #5 – Be level headed and be consistent
05:06 – #6 – Seek on-going support and mentorship – Keep improving yourself
06:07 – #7 – Don’t be fooled by lagging indicators
06:35 – Get all 7 points working and you’ll become a good Forex trader
Andrew Mitchem: In this video and podcast, I'm going to explain to you the seven really important points that you need to understand and have implemented in order to be a successful Forex trader. Let's get into it straight away.
Hi, Forex traders. Andrew Mitchem here, the owner of The Forex Trading Coach. Today is video and podcast number 210.
My 7 top tips to be a successful Forex trader
And this is a really, really important lesson for you to get, and to understand, and to implement in your trading. I'm going to give you my 7 top tips to be a successful Forex trader so let's get into it, shall we?
#1 – You must have a passion for trading Forex
Number one, you must regardless of all other things, you have to have a love of trading, a passion for it. I'd be trading for 13 years. I still have passion for it. Every morning I wake up, I want to go and have a look at my charts, see how the trades are going. A lot of people after that length of time in anything get quite bored. You see, most people of course get to Friday night, they can't wait for the weekend to come. For me, it's the opposite. I can't wait for Monday and the charts to open, the markets to open again so I can get trading again. You got to have a passion for it. There's no good in even if you're making money out of your trading if you hate doing it or you're really bored by it. You got to have a passion. It's a really important point number one regardless of what you do in life. Enjoy it and have a passion.
#2 – You must have a strategy that works for you
Number two, you have to of course have a strategy that works for you, something that suits you. It doesn't matter whether you're a technical trader, or a fundamental trader, or a combination of both. Whatever it is, have something that works for you, something that doesn't take all day and night to do. What's the point in having a really good system that's making you a lot of money but you're sitting there for 12, 14 hours a day glued to your charts? That's just no fun at all. Life is far too important and you need to have too much … You should be having lots of fun and not spending too much time at your charts. For me, it's important to have something that I can trade for only a short amount of time per day but does very, very well, and I think that's important for longevity and enjoyment out of your trading. Make sure you find out what works for you, what suits your style and your personality as a person and as a trader.
#3 – A low risk money management trading approach
The third thing you need to use and to understand correctly is a low risk money management approach. You see, you can have the best trading system on the planet but if you don't have low risk in your approach and high rewards risk trades, then what you generally do is lose money. You can have a 90% winning system but still lose money. You can also get heavily influenced by emotions, and greed, and fear, et cetera if you're risking too much on a trade. That takes you away from your trading plan. Keep your risk really low for trade. I suggest no more than half of 1% the trade.
#4 – Learn how to trade first
The fourth thing. You must learn how to trade first. Get that right first. Too many people come to me and they say, “Hey, Andrew. I want to be a full-time trader. I never traded before but I want to be a full-time trader,” or, “I can't stand my job. I want to make Forex work for me.” It really is not the way to be successful.
Also, when you're trading, forget about how much money you're making. People say to me, “Look, how on earth can I make a profit? You're telling me to risk half of 1% and I've got a $10,000 account. That's risking $50 a month. I'm making a hundred, $150 on a 10 grand account. I can't live on that.” On a 10 grand account, you're not going to live on that. It's just pointless trying to think that you are. The important thing is to do is to get away from the monetary gains or losses for now. Worry about the percentages.
The reason I say that is that if you can make let's say … Pick a figure. 50% return in a year, let's say, on a 10 grand account. You can do that on a hundred thousand. You can do that on 500,000, whatever it is later down the track. It really doesn't matter how much money you have in your account right now. The important thing is to learn how to trade, really, really important to do that first. If you do that right, then the money will follow. Absolutely no doubt about it. You can have a million dollar account today and still be a bad trader and lose money. The actual size of your account, how much you're making or losing today doesn't matter. Learn how to trade properly first. Really important point.
#5 – Be level headed and be consistent
Number five, be levelheaded, be consistent, be confident. Don't go off on a tangent. What I mean by that is you have to be consistent in how you trade. These people that say to me, “Look, I can't be bothered to trade today. This is silly.” People that say, “I took twice the amount of risk that I normally took on trade because it'll probably look pretty good.” That's inconsistency. You have to have consistency. You have to be repetitive, see the trade, take the trade. Keep repeating it. People who get very flighty, very emotional, generally don't make good traders. You got to keep your emotions under control. Again, it comes back to that low risk approach.
#6 – Seek on-going support and mentorship – Keep improving yourself
Point number six, you must seek ongoing help, support, mentorship, whatever you want to call it in anything that you do. Now, I'm not just saying that because I sell an online course. I'm saying that because it honestly is the best thing to do. You have to keep bettering yourself, educating yourself. I have a personal mentor. When I go to karate, I have a mentor, a sensei who teaches me although I can teach other people. You got to have someone that's always teaching you. When I'm flying, I get consistently doing more lessons to try and get better and trading is no different. You have to have people that you can talk to. You have to have people who understand what you're doing. Having education, and help, and ongoing betterment of yourself is really important. I strongly believe that. You can't just sit there at home and hide yourself away locked in a little dark room with you and your laptop. I expect to be a great trader without getting outside help. That's really important.
#7 – Don’t be fooled by lagging indicators
Number seven, don't be fooled by lagging indicators. So many people start off by seeing flashy systems, flashy indicators, flashy robots, whatever it might be, lots of stars, and charts, and lines, and arrows all over their charts. It generally doesn't mean very much. You have to be able to trade yourself and understand what's happening in the market. Again, that comes back to the previous comment in the back seeking good education.
Get all 7 points working and you’ll become a good Forex trader
Finally, get all those seven working. Your trading will work for you. I hope that really helps you. Remember the seven very important keys there.
Once again, this is Andrew Mitchem, The Forex Trading Coach. Have a great weekend. I look forward to catching you this time next week. Good luck with your trading.