How to become a successful Forex Trader?
So what does it take to be an effective forex trader? From possessing a passion for the markets to having unshakeable discipline and more, here are the traits that will assist you as a forex trader from the top expreienced traders.
1) You must like it, have a lot passion about it.
2) Analyse Multiple Factors.
Technical analysis has been used by traders, analysts, and investors for centuries and has achieved broad acceptance among regulators and the academic community—particularly with regard to its behavioral finance aspects. This reading gives a brief overview of the field, compares technical analysis with other schools of analysis, and describes some of the main tools used in technical analysis. Although technical analysis follows predefined rules and principles, the interpretation of results is generally subjective. That is, although certain aspects, such as the calculation of indicators, follow specific rules, the interpretation of findings is often based on a melding of techniques that suit the style and approach of the individual analyst. In this respect, technical analysis is similar to fundamental analysis, which has specific rules for calculating ratios, for example, but introduces increased subjectivity in the evaluation phase.
Fundamental analysis is a way of looking at the forex market by analyzing economic, social, and political forces that may affect currency prices. If you think about it, this makes a whole lot of sense! Just like in your Economics 101 class, it is supply and demand that determines price, or in our case, the currency exchange rate. Using supply and demand as an indicator of where price could be headed is easy. The hard part is analyzing all of the factors that affect supply and demand. In other words, you have to look at different factors to determine whose economy is rockin’ like a BLACKPINK song, and whose economy sucks. You have to understand the reasons why and how certain events like an increase in the unemployment rate affect a country’s economy and monetary policy which ultimately, affects the level of demand for its currency. The idea behind this type of analysis is that if a country’s current or future economic outlook is good, its currency should strengthen.
For example, let’s say that the U.S. dollar has been gaining strength because the U.S. economy is improving.
As the economy gets better, raising interest rates may be needed to control growth and inflation. Higher interest rates make dollar-denominated financial assets more attractive. In order to get their hands on these lovely assets, traders and investors have to buy some U.S. dollars first. This increases demand for the currency. As a result, the value of the U.S. dollar will likely increase against other currencies with lesser demand. Later on in the course, you will learn which economic data points tend to drive currency prices, and why they do so.
You will know who the Fed Chairman is and how retail sales data reflects the economy. You’ll be spitting out global interest rates like song lyrics. To be able to use fundamental analysis, it is essential to understand how economic, financial, and political news will impact currency exchange rates.
3) Exercise proper money management
Simply put, Forex money management is a set of self-imposed rules successful traders follow in order to manage their money effectively; minimising losses, maximising profits and growing the size of their trading account.
Forex money management is often, and understandably, confused with RISK MANAGEMENT, as they are fairly similar concepts. Risk management is more about identifying, analysing and quantifying all the risks associated with trading in order to manage them effectively and, in doing so, protect yourself from the downsides of trading. Money management just focuses on protecting your money.
Trade Only What You Can Afford to Lose
Quantify Your Risk per Trade
Establish Your Risk to Reward
Some Other most important points are as follows :
1) Find the right broker
2) Know how trading capital works
3) Start with a demo account
4) Never stop building your knowledge – and character