If you have been looking for what it takes to become a successful full time forex trader, then look no further, this article was written sorely for you.
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It’s true, forex trading is one of the soft skills that can help you create a sustainable stream of income; but it doesn’t stop at you calling yourself a Forex trader, it involves you becoming a successful full time Forex trader.
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Before we continue, let me point this out, Forex trading is not for everyone, so if you have been struggling in the forex market all your life, here is a good time for you to look at your plan, strategy and reconsider your decision. It’s not good to call yourself a Forex trader when you always close your trades in red.
The ongoing COVID-19 pandemic has led to the massive shrinkage of the economy, a lot of people have experienced pay-cut and lost their jobs, at worst. This has led to the increasing search for alternative source of livelihood; Since the Forex market is easily accessible to everyone, many people have been asking series of questions on how they can become successful full time trader.
There is no doubt that there are many benefit of trading forex over traditional jobs especially if you have the knowledge, risk management skills and a workable strategy.
Table of Contents
How to Become a Full time Forex Trader
Have a Plan
Don’t just go into trading without a plan. Your plan must include your risk management strategy, risk to reward ratio, and money management skill. The reason why this is vital is that, if you don’t treat Forex as a business from day one, you won’t enjoy the benefit therein, so it’s very important to have a workable plan before starting your journey into the Forex Market
Develop a Learning Curve
Develop a learning plan based on your trading need and work on developing yourself everyday. You cannot win in the market, if you are not up to date in terms of knowledge, strategy and understanding different market patterns. Have a library of Forex books, follow some successful Forex traders and find a mentor if possible; a mentor will hold your hands and assist you as you journey in the Forex Market.
Choose a good Broker
Obviously, there are thousands of Forex Brokers out there, you need to look for the most reliable Forex Broker in terms of service, trust and reliability. One of the best Broker around is Deriv.com; because they have been in the market for over 20 years and they have synthetic indices which offer 24/7 trading.
Develop your own forex trading strategy
You will not be able to succeed in the Forex market without a workable strategy. So develop a strategy that entails your entry point, lot size, exit point, stop loss and daily trading target.
The three Phases in your trading Journey
Phase I : Capital Accumulation
Trading in the long run is like a business. Just like a business has capital drawdowns every now-and-then, the same goes with the trading. Therefore, the first and foremost step in this journey is to accumulate sufficient capital and cover up all your liabilities for at least the next two years. Also, create an emergency fund for safety before leaving your actual job.
Phase II : Strategy Building
Once the capital is ready, the next thing to focus should be, creating trading strategies with an edge. A strategy which has a good risk to reward ratio, preferable 1:2 or more so that you can be profitable even when you are barely right with your analysis. It should also have a good risk management plan and backup plans for unavoidable events.
Phase III : Testing-Practicing
The last and the most excruciating part of this journey is to back-test your strategy using historical data and often, they fail and require the additional touch up before they pass the back-testing. After you are done with the historical data, it’ll be time to test it in real time. Practicing with small quantities and meticulously analyzing the results will give you the right amount of confidence and clarity about trading. Once you pass all the phases, it’ll be time to start increasing your capital, and after a point, you’ll be happy that you did and never gave up.
Deriv offers complex derivatives, such as options and contracts for difference (“CFDs”). These products may not be suitable for all clients, and trading them puts you at risk. Please make sure that you understand the following risks before trading Deriv products: a) you may lose some or all of the money you invest in the trade, b) if your trade involves currency conversion, exchange rates will affect your profit and loss. You should never trade with borrowed money or with money that you cannot afford to lose.
Thanks a lot you have changed my mindset