Everyone wants to make money in forex.
However the question is how do you do so? Many have no doubt tried and ended up with a margin call. You may be surprised that the truth is something within your control. Today let us explore 3 ways to make money in forex. When deployed faithfully, these 3 ways can give you a potentially profitable forex trading system.
1) Proper money management
This is the most important factor in your forex trading plan. Imagine this scenario:
a) Account $1000 Loss $500 Remaining $500
You need to perform at a 100% profit to be able to break even again!
b) Account $1000 Loss $50 Remaining $950
A mere 5.3% is all it needs to break even. Rather manageable.
You have to understand that losses in forex is inevitable. You have to be prepared for it. Anyone who claims to have a 100% rate to make money in forex probably has a crystal ball! Read Proper Money Management may be the holy grail for Forex to find out more.
2) Knowing your forex trading style
Some people are comfortable to manage a temporary loss while waiting for the market to play out it’s technical charts but some people will panic and probably take an unnecessary loss. You need to know if you are more of a risk taker or someone who is risk averse.
Matching a suitable forex trading method to your personality is important. This has an effect on your willingness to follow through on your plan which is important for consistent results. Find out more about the various styles by reading Forex Trading Styles.
3) Say no to excessive forex trading
Say you just had a loss and you want to get your money back. Or perhaps you just had a great profitable run and you are pretty sure things will stay the same.
Excessive forex trading increases your exposure to the market unnecessarily and hence increases the chances of a loss. Whether you are trying to counter or follow a trend, trends do not last forever. Always spend time after closing a trade to evaluate what went wrong or right and how can you further improve on it.
When all else fails, go take a walk. If you miss an opportunity, there will be a next one. If you suffer a margin call, your money is gone for good.
Find out more by reading Forex Mistakes : Over Trading
Save your forex margin accounts find out and avoid the 3 ways to lose in forex trading
All the best and i hope you develop a personal forex trading system that enables you to make money in forex!