Forex traders are constantly asking our team how they should start trading and what they have to do to achieve long-term profitable results on the financial markets. In this article we will show the 4 steps you must take if you would like to become a professional and long-term profitable trader.
1) The first and most important step is choosing the right broker.
We have written a lot about brokers in other educational articles, so you should be very clear about how to make the right choice. If you have further questions, we recommend that you read our homepage and the previous articles in this educational series. On our homepage, you can see trading results comparisons of the same trading strategy traded with various brokers. We are constantly doing extensive tests of brokers on real accounts around the world, and we recommend that you choose the broker that shows the best trading results of our trading strategy – you can see all the information on our Brokers Truth page.
Keep in a mind that the right choice of broker is the most important first step to profitably trading in the financial markets.
2) Choose a suitable trading strategy about which you are confident.
If you trade with a high quality broker, you don't need any magical trading strategy. A usual time-proven trading system is enough for profitable trading – you can find a lot of them free on the Internet. Our team at FX Trading Revolution uses both scalping and algorithmic automated trading strategies. However, a lot of retail traders use usual Price Action strategies like Pin Bars, Inside and Outside Bars, S/R zones, psychological levels, or important minimum / maximum price levels for their profitable trading.
3) The next step to start trading profitably is called money management.
Remember that you only have to risk a small fraction of your trading capital on every trade. You always have to set the % risk before you start trading. For example, you can risk as little as 1% or 2% of your trading account – the amount depends on your risk appetite.
Also remember that if you set the % risk in your money management – a volume of trades could rise too fast, and it could cause drawdowns of your trading capital. As both your profits and volumes of trades rise we recommend to lower the risk percentage.
Also remember a golden rule of money management: always first set your stop-loss (which has to be adjusted based on the current situation of the market and its volatility). Then decide how much you can risk on your trade. Only after setting your stop-loss, it is time to set a volume of your trade. Never try to set your trade volume until you have set your stop-loss!
Money management is an extremely important part of profitable trading and you should not overlook it!
4) The last important step is a psychology.
You probably hear about it at every educational meeting about trading. We prefer to refer to this step gaining real experience from trading. Follow the three steps above, do not treat your trading as a highly complex science, and do not try to collect too much information and education as possible. In trading, a profitable trader always returns back to the most basic information and techniques. Keep everything simple and use time-proven strategies which really work.
Thanks to these tips, you will be light years ahead of the vast majority of forex retail traders who are searching for the holy grail of trading systems and indicators, and trade based on advice from pseudo professionals and use distorted education from brokers.
Experience will come with real account trades – you will understand how financial markets really work and what influences your trading results. You will also call things and costs in the right way. You will avoid easy tricks that the vast majority of retail brokers use to make their biggest profits from beginners.
In conclusion of this educational series, we would like to mention that we hope that the FX Trading Revolution website has enlightened you, and that it will help you on your way to exploring financial markets. Here we have published a lot of information. If you need further clarification, do not hesitate to contact us and it will be our pleasure to assist you.
We wish you a lot of success in trading!
Team FX Trading Revolution
1. FX Trading Basics that you must Know
2. Know Your Enemy - Participants of Markets
3. Insider Information about Interbank Trading
4. What Brokers Never Want You to Know!
5. Dirty Practices of Brokers that Cost You Profits
6. How to Choose the Best Broker
7. The Most Profitable Trading Strategies
8. The Four Steps to Begin Trading Profitably