Becoming a reputable Forex trader requires having a
successful trading system. To the average Forex trader
making more than 5% a month is highly unlikely. The only
guaranteed way to become a reputable trader is to develop a
good trading system. In this article I will answer your
question: How can I become a reputable Forex trader? After
reading this article, you will better understand what you
should look for as a professional Forex trader.
A trading system is a simple way of saying, how does a
forex trader decide when to enter or exit the market and
how much leverage should he use on each trade. There are 3
elements to a successful trading system. The trade entry
timing, trade exit timing and deciding on the proper
leverage. These three elements alone are what we look at
when assessing the quality of a Forex trading system.
1 - When to enter the market
The quality of your system is going to be reflected by the
amount of time you as a professional Forex trader are
willing to commit to trading your system. For instance, if
you are generally available during the hours of 8am to 4pm
then it would not be logical to develop a system which
enters during the hours of 2am to 6am. Deciding on which
hours you are willing to commit towards trading Forex will
determine the quality of trades you make on a regular
basis. It is also going to influence the quality of life
you live on a daily basis. Needless to say there are
countless traders who spend nearly 24 hours a day watching
their monitors in fear that they will miss the next big
move. This is not how I would describe a high "quality of
life" and this is definitely not the path towards becoming
a reputable trader. If you have experienced chart gazing
for more than 10 hours straight then you know what I say is
true. Your trade entry times must be comfortable for you to
implement into a leisurely lifestyle.
2 - Exiting the market
Once you have entered a trade you should already have an
exit strategy in place. This exit strategy may be based on
duration: I will exit position after 10 hours whether in
profit or loss. Your exit strategy may also be price based:
I will exit position when either a profit of 15 pips is
reached, or a loss of 15 pips is reached. A combination of
the above two mentioned criteria can be used. A number of
other exit strategies including the use of technical and
fundamental indicators can also be used, however the
important thing to keep in mind is that an exit strategy
must be in place before ever entering into a trade. This is
not improvisational trading and your goal is not to
constantly invent and reinvent the proverbial "traders
wheel" so to speak. If your goal is to become a reputable
Forex trader you need to make a plan before you enter the
market and dedicate yourself towards sticking to it. If you
do this you will be well on your way to achieving your goal.
3 - Use proper leverage
No table can stand on 2 legs alone, leverage is undoubtedly
the essential 3rd leg to any successful trading system. As
a Forex trader knowing how much leverage to use on any
given trade can be the life or death of your account. On
any given trade you should have firmly established criteria
which will determine how many lots you will use. A
dangerous place to find yourself might be adding lots to a
losing position in the hopes that it will turn into a
winning trade, or compulsively closing out half of your
position before your target is met. These two actions when
carefully planed ahead of time may be sound in strategy,
however it is essential that your trading rules are written
before your trade is placed. It just cannot be emphasized
enough, emotional trading will lead to disaster. Emotional
trading will cause you to increase or decrease your
leverage based on how you feel in the moment, and in that
moment your emotions will trick you into throwing your
entire trade plan out the window. By creating a plan which
includes when to enter, when to exit and how much leverage
to use you will become free to execute your trades without
the fear that your emotions will get in the way. This is
how expert Forex traders move around in the market.
The benefits are far reaching, once you have learned to
stick to your plan you are free to begin experiencing the
emotions that come with being a successful trader. Emotions
are not your enemy, they only become your enemy when you
allow them to influence your strategy. A reputable Forex
trader is not a zombie, or a machine that turns out trades
without thinking or blinking; the goal of every Forex
trader is to create a lifestyle which promotes an inner
sense of accomplishment. By sticking to the above 3 points
you will find a new path unfolds before you, one which will
lead you to Forex trading success.
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Ranked in the top 10 on Google.com, Aaron Stokes brings
guidance to Forex traders covering topics such as money
management, entry & exit strategies. Returns of 10 to 30%
per month are possible through his managed Forex program.
For more information visit: http://www.forex-cipher.com
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