Who doesn’t want to become successful in the trading profession? Every day the number of active traders in the Forex market is rising at an exponential rate. But if you consider the success rate, you will feel sad. Less than 5% of retail traders are making a profit on a regular basis. So, it’s very obvious that becoming successful in the trading profession is a very challenging task. However, the experienced traders in Hong Kong always consider trading as an easy job. In fact, you can also trade the market like a pro trader provided that you know the perfect way to execute the trade. Let’s discuss the four key steps which you need to learn to master the art of trading.
Step 1: use of a demo account
Very few traders actually understand the importance of a demo trading account. They simply execute trades without learning the details of the market and lose a big portion of their investment. As a new trader, you need to demo trade the market for the first few months. It will familiarize yourself with the market environment. In fact, this is the only rational way to learn the art of trading. Try different kinds of trading strategy and see how it works. As a new trader, you might often feel bored with the demo trading performance but this is another big challenge. You have to develop strong patience or else it won’t take much time to blow up your real account.
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Step 2: finding a professional broker
Once you feel confident in your demo performance, it’s time to find a reliable broker. Some of you might think it’s nothing but a waste of time. But without having access to the best trading platform, you won’t be able to do the market analysis with an extreme level of precision. Elite traders prefer to trade the market with brokers like Saxo since they always offer premium trading environment. Use their demo account and get yourself familiarized with their SaxoTraderPro platform. Once you feel confident with the new trading environment, invest a small amount of money and start trading the real asset.
Step 3: find your weakness
Being a new trader, it’s normal to have tons of weakness. Those who are smart always learn from their trading mistakes and progress faster in their trading career. Try to maintain a trading journal so that you can easily analyze your trade history during the weekend. Find the faults and fix those issues. Unless you create a balanced trading strategy you will never see any real progress. Some of the rookie traders’ often become overconfident and they stop following the rules. But this is another big mistake in the trading business. You can’t afford to trade the market with emotions.
Step 4: learn trade management skills
This is the most important part of your trading career. You might have the most expensive trading strategy in the world but without knowing the proper way to manage your trade, you are most likely to lose money. Before you execute any trade, analyze the risk-reward ratio. A good trade setup should have at least 1:3+ risk-reward ratio. The new traders might not understand the importance of such an approach but this is the only way you can ensure consistent profit at the end of the month. Try to create a simple trend trading strategy so that you can use the trailing stop loss features and maximize your profit.
Trading the market is a very easy task but making a consistent profit is really hard. You have to rely on long term goals and learn new things from your mistakes. As a currency trader, always remember, you are here to make money in the long run. Never think you can change your life without doing the proper market analysis. If possible, go for some paid education since the experienced traders will give you clear guidelines about the market.