Roadmap to Trading Success
How to Become a Professional Trader
The Forex market has the largest trading volume among all investment markets in the world. The market offers investors hundreds of investment instruments. It has special features that help you gain more profit. A roadmap for trading success is critical when defining patterns, calculating risks, and staying consistent.
Here are four valuable tips to help you get maximum profit in the Forex market:
1. You should allocate time for following your position in Forex
Traders often prefer their country’s currency in the positions they open. This way, time zone differences and keeping track of other factors such as news or data are handled easily.
On the other hand, if instruments in different time zones are preferred, the data released during the day cannot be followed easily. Therefore, you may face a big surprise when you wake up in the morning.
2. Consider your collateral before opening a position
Opening a position on a high-cost instrument can risk your entire capital. Lot sizes are also significant for keeping your positions open. Your position size is determined by the number of lots. If you open a position on an instrument with high volatility and high lot size, a tiny movement against your will may end up as a ‘margin call’. A margin call occurs when the value of a margin account falls below the maintenance margin requirement of the broker or account. To become a professional trader, you should know the average volatility of that instrument within a day and calculate how much collateral you can risk.
3. Do not trade only one instrument
Trading only one instrument minimizes your risk compared to trading many instruments. However, this move increases your opportunity cost. If you stick to one instrument, you will miss opportunities to gain profit on other instruments. In addition, trading multiple instruments can eliminate the risk of losing by hedging another instrument.
If you open a position in EURUSD and suffer from losses, you can open a position in XAUUSD (Gold) and minimize your losses and make profits! However, if you trade in too many instruments, you will have to follow all news and data releases in connection with those instruments. This may be harmful for both your capital and your mental health. To become a professional trader and gain more profit, do your calculations wisely.
4. Macroeconomic Data Analysis is not the only way
While evaluating the instrument you choose, you should be able to easily access the macroeconomic data related to it. Price movements are highly affected by data releases. In addition, there are other variables that cause price fluctuations. Political events and geopolitical developments are significant factors. A political crisis in the USA may cause losses in the USD or US index and can briefly rule out your macroeconomic data analysis.
To sum up, always have an alternative or more to trade in the Forex Market. Arrange your time to follow data releases and take immediate action. Avoid high-cost instruments when compared to your capital, and do not risk all your capital. Follow important political and geopolitical events as well as economic data in the analysis process. Taking into account all these tips, you can choose the most suitable instrument for you and create your roadmap to trading success.
You may read this related article too Your Trading Guide: How do Swaps Work?
