Becoming A Full-Time Trader
This article originally appeared on Bitcoin Trading Broker
Becoming a professional or full-time forex trader is the ultimate dream. This is when you make it in the complex and competitive world of Forex trading. However, not a lot of traders manage to successfully make it as a full-time trader, since success as a full-time trader depends on developing a patient mindset and being disciplined with your trades. If you do plan on becoming a full-time trader, you should know that there isn’t a “Holy Grail” trading system, or any “Magic Bullets” that will allow you to make successful trades.
The most important thing you must understand before you become a full-time trader is that there are no promises or guarantees of making millions of dollars through forex trading. There is no quick-fix to becoming a successful full-time trader. If you’re interested in learning about how to make it as a full-time forex trader, then keep on reading. I am going to share the critical steps you must take if you plan on making a living from trading full-time in the forex markets.
Make sure you know the basics of Forex
The first step to becoming a full-time trader is to learn about the basics of Forex. It is a no-brainer since, without knowledge of the basics, you will not manage to make successful trades. Your knowledge and education of forex and forex trading must be immaculate. Once you understand what the forex market is, which basic trading styles are used, and why the market exists, you will start getting better results with real money trading.
Master an effective Forex trading strategy
The key to becoming a consistently profitable trader is by mastering one trading setup. Yes, that is all it takes. But mastering an effective forex trading strategy can take years. Once you master one setup, you can add another setup and so on, until you can develop your own trading style. The best strategy here is to pick a forex trading strategy that is the easiest for you to understand.
Don’t force yourself to learn a setup only because you saw someone else using it and finding success. You must be bold and carve out your own path to success, because every person is different, and has different personalities and thinking capabilities. That is why there are so many different forex trading strategies. Don’t be afraid to take the long route to profitability. Your motivation should be to become a full-time trader, irrespective of how long it takes you to get there.
The most successful forex traders take the long route to profitability,since they experiment with different concepts before adopting one. It is important to study different trading techniques and strategies if you want to master them.
Be realistic and honest with yourself
One of the most important aspects of becoming a full-time trader and making a living by trading in the markets is to be honest and realistic with yourself. This means understanding what is possible at the current moment and not making trades that are bigger than the size of your trading account. For example, if you have a trading account with $2,000 in it, then you are still a way off from becoming a full-time trader right now.
You need to learn that you shouldn’t risk more money than you are comfortable losing on a trade. If you have a small trading account, then you must make smaller trades. Risk management is a big part of forex trading, and you should only make trades with money that you’re comfortable risking or losing. Don’t worry about making less money than your set goal or failing to get rich quick in the beginning, because that is what stops most full-time forex traders from being successful. Your focus should be on making good trades and growing your trading account slowly. The “Big Money” will follow you later.
Make a Forex trading plan
Your next step should be to master your trading strategy by developing a solid forex trading plan that supplements it. You must have a price action forex trading plan before you start trading in the markets. Good news is that it isn’t hard to create an effective forex trading plan. This trading plan will act as a guide that you must follow and is a critical element for anyone trying to become a full-time trader.
You must have discipline and focus if you want to avoid over-trading, or over-leveraging your account. This is precisely what your forex trading plan will do. It will ensure that you don’t trade emotionally and lose money in the market.
Once you have mastered your trading strategy and developed a solid trading plan to supplement it, you should test it out on demo-trading accounts. A lot of traders don’t bother with demo-trading, because they feel they don’t need to do it. However, demo-trading is extremely important if you want to become a full-time trader. It helps you get familiar with the trading platform. That is important for all aspiring full-time traders. A lot of traders will make silly errors, simply because they aren’t familiar with the forex trading platform.
Serious forex traders should practice on demo-trades, so they can perfect their trading strategy and achieve consistent profitability for 3 months at least before they trade with real money. Demo-trading is also recommended because there aren’t any emotions involved in it. It will prepare you for trading with real money on the forex market.
Your number one priority should be managing risk if you plan on becoming a full-time forex trader. All the best full-time forex traders do one thing better than the rest – effective risk management. They don’t make silly errors when trading, and that is what separates a professional full-time forex trader from the rest. Risk management is extremely important because if you don’t manage your risk, and are losing more money than you’re comfortable losing, you will never manage to grow your account. You should understand position sizing and the power of risk-reward, which are two critical components for risk management in the forex market.
Amateur forex traders don’t manage their risk, which is one of the main reasons why they fail to make consistent profits. The reason they take a lot of risks is that they haven’t found their ‘perfect’ trading system. Without a trading strategy, they aimlessly make risky trades and end up losing money.
The last step to becoming a full-time trader is to understand the trading psychology of professional, full-time traders, and learn how they approach trading. Amateur traders are more prone to gambling in the markets, while professional traders look at trading as a business and will only take calculated risks. When you’re new to trading, you can get carried away if you win a couple of trades in a row. Then, you’re likely to make a silly mistake and lose all the money you made in previous trades.
Professional traders will never make that mistake because they are disciplined and don’t get emotional if they win a couple of trades or lose a couple of trades in a row.
Photo by Jacky Chiu