How to become a dominant trader in the Forex market
Dominating in the trading industry is a very challenging task. Most of the rookie traders think that they can earn millions of dollars without doing the proper analysis. But once they start taking the trades in the real market, they realize, trading is a very tough task. And if you invest your money in the options market, you are going to lose money most of the time. In order to make a regular profit, you have to follow certain rules.
To become a dominant trader, you have to follow some cardinal rules. Go through this article as we are going to discuss some advanced steps which will allow you to take the trades in a more strategic way.
Go through the basics
Before you start investing your money in the real market, you have to go through the basics. Unless you can take your trades strategically you will never find reliable trade signals. The only way by which you can ensure this is by having strong basic knowledge about the options market. Learn about the support and resistance level so that you can take the trades with a high level of precision. While drawing the support and resistance level, focus on the higher time frame. If you chose to take the trades in the lower time frame, you are going to lose money most of the time. So, to protect your capital, develop your patience level.
Develop your patience
To develop your patience level, you have to be mentally prepared. Without having a strong mindset, you will never learn to execute quality trades. Try to evaluate the market data in the daily and the weekly time frame. Get a demo account from high-end brokers like Saxo and start trading the market in a risk-free environment? Once you become good at analyzing the critical market data in the demo account, you may switch to the real trading account. This should give you free access to take the trades with a great level of confidence.
Trade with the trend
To dominate in the Forex market, you must take the trades with the major trend. If you ignore the major trend in the market, you are going to lose most of the time. Draw the trend line in the daily or the hourly time frame. This should give you a strong indication of the potential direction of the market trend. It might take a while to get used to the trend trading method but once you become comfortable with the trend trading strategy, you should be able to take the trades with a high level of precision.
Trade with a high risk to reward ratio
Being a currency trader, you should always trade the market with a high risk to reward ratio. If the risk to reward ratio factors are less than 1:2, you should not take the trades. Professional traders are able to deal with their losing trades since they know the proper way to deal with their losses. Since they take trades with a high risk to reward ratio, they can easily recover the losses. Some of you might think you can earn a huge amount of money by taking high risks. But this is not how the professional trader trades. They always follow strict risk management rules.
Money management rules
To survive in the retail market, you should trade with 1-2% risk only. If the risk factor exceeds the 2% threshold level, you are not going to have a pleasant time in the trading profession. Learn about the trailing stop loss features so that you can execute the trades with a high level of precision. Take your time and focus on the simple trading technique. Make sure that you are comfortable losing a certain amount of money. Stop trying to avoid losing trades as it will never happen. Learn to trade with the existing trend and use a low leverage account as it will help you to protect the capital.