Some initial thoughts on what to think of when start trading
The forex traders usually got a plan for action before to start trading on the markets and keeping up to this plan is the main factor to be successful traders. No matter if you got such a plan or not, asking yourself these questions can place you better position and achieving the goals are more like to be accomplished.
What is the direction of the main trend?
Often the main trend is the key factor when executing the deal, because if you trade in same direction with the main trend you are floating with the overall trend and not against it. Following this you can make smaller entries and actually win cash without taking high risk.
What are the possibilities of entering a trade?
It can be impossible to calculate your chances, but the best and most common working option is to track the historical data and testing you can gain better view of what is likely to happen.
What risk to take?
The knowledge of your win/loss possibilities will allow you to calculate your risk with so high precision that your potential of profit on your account to be optimised will increase drastically. Even if you don’t know it you still have to be able what/when to buy and where to place your stop orders.
What is your exit strategy?
Entering the market is important, but closing the deal is even more important, since it is the main thing to make you able to profit big or cut the losses. Exits(closing the deal) are close connected to the stop of each deal. Think careful how and when to end the trade.
How you will know that you are doing the trade wrong
You can have stops and place them well to at least limit your losses but still you have to have the knowledge of when to close the deal after not making money in some period of time. Knowing and understanding the timing of closing a losing position can have significant impact on your earnings.
What size of profit to look for?
Here the rule is very simple, place careful stops, make smart entries and enter in good positions – but NEVER get too greedy. Greed is the enemy of any trader.
Are you in good condition of the body and soul?
Before to join the action, make sure you have sober head, well relaxed and chilled. No emotions only brain has to work for you to become top earning trader.